USDA Seeding Intentions Report/First N. American FMD False Alarm

[charliep]

Just a note to highlight today's USDA seeding intentions report. No surprises with soybeans a little bigger than expected and corn a little smaller.

The other interesting item was the first news story about a potential Food and Mouth Disease Outbreak in the US ( I HIGHLIGHT FALSE ALARM). The markets (both livestock and grain/oilseeds) dropped like a rock in a swimming pool until USDA put out a release that the incident wasn't FMD for about 10 minutes until the report was corrected by USDA (again not an outbreak). It is a good up front warning as to what the impact of an outbreak might have.

What measures are you taking on the pricing side to protect against this risk both on the livestock and crops side?

[ianben]

Hi Charlie
You make a good point. The effects of a confirmed FMD are unbelieveable.
It reaches into areas unimaginable till it strikes. Our tourist industry seems the worst affected people were told to stay away from the countryside and boy are they doing so!!
Small hotels and farms with B&B are not getting new bookings and confirmed bookings are cancelling. A lot of farmers in the areas worst affected where encouraged to diversify into tourism so they are suffering doublely.

Grain prices have fallen about £5/tonne spot perhaps more in the futures.
Some countries have banned grain exports from UK so the trade is very jittery.

Meat consumtion is down by 30% but no wonder with all the horifing pictures on the TV.
What will be the outcome?
Who can tell?
How do you insure/protect yourself from one-off events like this?

It is 33yrs since the last out break in the UK. I remember it disrupting my social life, I was 16/17 and had just discovered girls so everything being canceled was a real blow.

Just keep up your import restrictions on meat from infected areas, which is not just the UK but most of Asia S America and some of Africa.

We are very lax on what enters our country as I am sure you know if you have ever visited the UK.
No forms to fill in on the plane. No questions on landing about will you visit a farm or do you have seeds or soil.
It was one of the things I noticed when I first visited N. America and I am sure it is your best defence against FMD.

Regards Ian

[chas]

Looks like our great open market system is being manipulated again by corporate America. USDA planting intentions report was announced friday, commodity market on corn starts to rise on favourable report. Low and behold Cargill sells 1000 contracts of corn, a large corporate hog barn in North Carolina fines two dead pigs, suspect foot and mouth at 11:45 am send parts for anaslyts market drops like a bullet until it is announced that the test came back negative and market comes back some. This stinks like manipulation to me and a thousand other American farmers think the same. Large companies who are involved in every end of agriculture except the risky grain production are controlling the market to their advantage.
Like one American farm says lets give them what they want, sell all our grain that is on hand and buy back crop into next year at the low price. Put the planters in the shed and not seed and watch the price go up. Now that would be the mother of all manipulations and the mother of all diets. Chas

[charliep]

It was an interesting day - particularly if you were a small, unfunded speculator. If you are playing this game, this is the risk. For most people - farmers included - this was just a news item and things corrected as soon as the real story came out. You and I will likely disagree but this the reason I support futures - things happen in a public forum (futures trading pit) rather than behind closed doors. You can observe the information/price reaction directly and come to your own conclusion.

More important is the reaction of the market to news of a foot and mouth disease (AGAIN THIS WAS A FALSE ALARM). This is a definite risk factor in the coming year and farm managers should have a plan of how they would deal with this issue. This could be anything from being a little more vigilant in forward pricing on rallies, maybe using puts on cattle, etc. Maybe people should also be thinking about closing herds such that they aren't bringing other animals onto their land and being more careful about people with maybe cleanliness standards for visitors, truckers, others.

The big things are caution and planning. Hopefully I am not being alarmist. Others thoughts.

[chas]

Charliep: To much forward pricing keeps prices low. Subidises do the same thing to prices. The less 90 day storage tickets and the less future pricing the better the prices would be. It takes money to draw out supplies in and unpriced market. The more forward pricing the better the enduser likes it to keep prices low. But color me stupid.
I see your point with F&M but lets not panic with corporate manipulation. Chas

[ianben]

Hi All
On FMD I think perhaps you may perhaps be over reacting
If it was possible for people to carry it easily on clothes shoes etc. dont you think it would have been round the world 3 times by now.
We do not have any positive information yet, but seems to have come on illegally imported meat fed as pig swill.
These are two areas that might require more vigilance, but we are very poor on checking food imports. Our govrenment has not given us much protection and I understand nothing has changed yet.
The severtity of the outbreak is mainly due, in my opinion, to the lenth of time we had it before it was detected.
Aparently the pigs on the original farm had recovered from FMD, the blisters on their feet had healed, so we had FMD for 4/6 weeks without any action being taken.
No wonder it has spread so widely, but still less than 1% of animals are affected on 0.3% of our farms. Terrible for the individuals but hopfully not the end of farming as we know it as the media would have us believe.
Pity there is nothing better for them to write about!!!

Regards Ian

[ianben]

Hi All
Here is a report I just read on the internet at www.farmgate.co.uk
I think it shows just how lax we have been on checking imported meat.

NPA SLAMS MEAT IMPORT SCAMS AND CONFUSION - Apr 4, 2001
by farmgate reporters

The results of an investigation by the National Pig Association into claims that importers are breaking port inspection laws, will be revealed by the National Pig Association tomorrow.

The NPA says it is quite probable that a meat import, concealed from inspectors, led to the current outbreak of foot-and-mouth disease.

The NPA acted after the Association of Port Health Authorities revealed the likelihood of meat import concealment to avoid inspection charges and also pointed to confusion over import checks.

"The APHA says the Department of Health believes that the local authority will undertake checks - but this is not necessarily so, and in any event the costs of any such checks would fall to the council tax payer," said Hugh Crabtree, NPA vice-chairman.

"We have also uncovered huge amounts of meat being brought into the country under the guise of 'personal use'," he said.

"We know from our contacts that very large amounts of meat indeed are brought into the UK through Heathrow Airport, and that serious concerns were raised with Nick Brown more than a year ago."
Brown is our minister for agriculture

He said it was "absolutely scandalous" that nothing had been done about this despite the best efforts of informed people on the ground.

"From what we have learned, it's obvious that despite repeated warnings, our own government has failed lamentably to ensure the safety of food and personal imports coming into the UK."

"It is clear negligence on the part of the government that is the most probable cause of this outbreak, and the most appalling aspect of what we have discovered, is that this flood of potentially infected meat continues to flow into the country as we speak - as soon as we clear up this mess, there could be another outbreak just waiting in the wings."

The NPA will brief journalists on the scale of the problem in London tomorrow.

© farmgate.co.uk ltd 2001

Hope this helps with how to quantify the risk of FMD outbreak in Canada

Regards Ian

[charliep]

Ianben - Thanks for keeping us informed about FMD in the UK/Europe. It is sad to learn from someone elses bad luck/misfortune but we need to use the European situation as a case study (maybe some examples of what not to do).