CRISPR ISN’T ENOUGH ANY MORE. GET READY FOR GENE EDITING 2.0 - Wired - "Usually, when we’ve referred to Crispr, we’ve really meant Crispr/Cas9—a riboprotein complex composed of a short strand of RNA and an efficient DNA-cutting enzyme. It did for biology and medicine what the Model T did for manufacturing and transportation; democratizing access to a revolutionary technology and disrupting the status quo in the process….But like the Model T, Crispr Classic is somewhat clunky, unreliable, and a bit dangerous. It can’t bind to just any place in the genome. It sometimes cuts in the wrong places. And it has no off-switch. If the Model T was prone to overheating, Crispr Classic is prone to overeating."
These are not your father's GMOs - MIT Technology Review - some good info in this article. For one thing it explains (indirectly) how CRISPR is different from previous GE food technologies both in terms of technique and application.
Due to the fact that it is so much like other 'unregulated' crop improvement techniques (like mutagenesis) the costs of bringing this to market are much less:
"It’s counting on that to cut at least half the 13 years and $130 million that companies have, on average, invested in order to create a new GMO and get it into farmers’ hands"
The applications are also ripe for making food healthier:
Marketing “healthier” food made from GMOs has been a taller order. But if gene-edited plants can avoid the stigma of GMOs, that could change.
But there are some criticisms, that seem unfounded and hypocritical:
"To the critics, any attempt to reclassify engineered plants as natural is a dangerous fiction. “If they don’t have to go through the regulatory requirements, then it is game on again for genetic modification in agriculture,” says Jim Thomas, head of a nonprofit called the ETC Group that lobbies on environmental issues. “That is the prize. They are constructing a definition of a GMO so that gene editing falls outside it....Some organic associations have already said such plants cannot carry that label, reasoning that they really are GMOs."
I am not sure anyone is constructing a definition of GMO that is any different than the one the organic food lobby applies to mutagenesis in their own certification.
Sunday, December 31, 2017
Whole Eggs, CRISPR, and GMOs
Whole Eggs Better than Whites for Muscle Growth - Feedstuffs -A recent study that seems to find when it comes to eggs consuming protein 'in its natural matrix' gives better post workout muscle growth vs. eating an equivalent level of protein from egg whites alone:
Avoiding GMOs isn’t just anti-science. It’s immoral. - Washington Post
Some good points made here:
"If you’re an academic, you can tell yourself that, sooner or later, the science will prevail. If you’re from the world of commerce, you justify your silence (or complicity) by saying that you aren’t in business to argue with customers. If you’re a regulatory bureaucrat, you worry that you will be drawn and quartered for any mistake, whereas no one is ever held accountable for the miracle that never makes it to the marketplace."
Some Farmers Still Don't Trust CRISPR, Thanks to GMOs - Motherboard
“I have a hard time, ethically, with the patenting of life,” he says, “and how that impacts farmer innovation and their ability to advance.”… “I think there’s a lot of controversy over whether farmers are driving for these technologies or whether these technologies are manipulating farmers,” he says. “I think you’ll get answers on both sides of that issue.” Wright agrees. “I definitely think that is a concern,” he says. “I don't think farmers are driving those decisions at all. I think the large companies that produce these technologies are driving those technologies hard.”
But are critics equally concerned with patenting of life related to so called 'non-gmo' tech, like mutagenesis? I think the answer is either NO or if they are then the media/publishers are not interested in hearing those criticisms.
“I just don’t see it as the panacea that many people in the technology industry seem to think it is,” he says. Willey stresses that the impacts agriculture has on the natural resource base are massive and no single technology is going to solve that. “It’s not about coming up with one or two CRISPR products,” he says, “it’s about looking at the whole approach to the ecology around agriculture"
That seems very agreeable. It seems like gene editing still targets one or a few genes, and there is a lot of additional genetic variation to be exploited by other genomic approaches that involve data science and discovery (like molecular/marker assisted breathing). Again its the convergence of big data and genomics.
Avoiding GMOs isn’t just anti-science. It’s immoral. - Washington Post
Some good points made here:
"If you’re an academic, you can tell yourself that, sooner or later, the science will prevail. If you’re from the world of commerce, you justify your silence (or complicity) by saying that you aren’t in business to argue with customers. If you’re a regulatory bureaucrat, you worry that you will be drawn and quartered for any mistake, whereas no one is ever held accountable for the miracle that never makes it to the marketplace."
Some Farmers Still Don't Trust CRISPR, Thanks to GMOs - Motherboard
“I have a hard time, ethically, with the patenting of life,” he says, “and how that impacts farmer innovation and their ability to advance.”… “I think there’s a lot of controversy over whether farmers are driving for these technologies or whether these technologies are manipulating farmers,” he says. “I think you’ll get answers on both sides of that issue.” Wright agrees. “I definitely think that is a concern,” he says. “I don't think farmers are driving those decisions at all. I think the large companies that produce these technologies are driving those technologies hard.”
But are critics equally concerned with patenting of life related to so called 'non-gmo' tech, like mutagenesis? I think the answer is either NO or if they are then the media/publishers are not interested in hearing those criticisms.
“I just don’t see it as the panacea that many people in the technology industry seem to think it is,” he says. Willey stresses that the impacts agriculture has on the natural resource base are massive and no single technology is going to solve that. “It’s not about coming up with one or two CRISPR products,” he says, “it’s about looking at the whole approach to the ecology around agriculture"
That seems very agreeable. It seems like gene editing still targets one or a few genes, and there is a lot of additional genetic variation to be exploited by other genomic approaches that involve data science and discovery (like molecular/marker assisted breathing). Again its the convergence of big data and genomics.
Wednesday, December 27, 2017
Bridging the Gap Between People and Farmers - why agvocacy and science communication matters
From:
The gulf between farmers and the people they feed is getting dangerously wide | Financial Post:
http://business.financialpost.com/commodities/agriculture/the-gulf-between-farmers-and-the-people-they-feed-is-getting-dangerously-wide
"realizing that without advocacy a generation that doesn’t know about food production has the power to make running a farm operation nearly impossible.If nothing is done to close this gap and the logic pounding away at this wedge is taken to its limits, farmers will continue to see an increase in agriculture-related policies and laws that have no grounding in the way things really are outside of Canada’s cities; farmers will feel more and more pressure to justify what they do to an audience seemingly oblivious to the fact that farms produce food; farmers will be forced to continue finding ways to diversify and stay afloat while government and other risk-management supports crumble; and more and more cultivated land will be forfeited to development."
Really good points. This is why agvocacy matters. Its not about 'being right on the internet' or dominating a twitter feed. This is also why those interested in the 'free market' need to stay tuned. As food companies voluntarily put out 'free-from' labels and engage in other questionable marketing practices they are nurturing an environment and sentiment that can be energized to pass technologically restrictive laws - that have no grounding in the way things really are - ultimately increasing risk, reducing food security and sustainability on a national and global scale.
This is also challenging in light of research that indicates the challenges of science communication. See: Polarization of Controversial Science and Limitations of Science Literacy
The gulf between farmers and the people they feed is getting dangerously wide | Financial Post:
http://business.financialpost.com/commodities/agriculture/the-gulf-between-farmers-and-the-people-they-feed-is-getting-dangerously-wide
"realizing that without advocacy a generation that doesn’t know about food production has the power to make running a farm operation nearly impossible.If nothing is done to close this gap and the logic pounding away at this wedge is taken to its limits, farmers will continue to see an increase in agriculture-related policies and laws that have no grounding in the way things really are outside of Canada’s cities; farmers will feel more and more pressure to justify what they do to an audience seemingly oblivious to the fact that farms produce food; farmers will be forced to continue finding ways to diversify and stay afloat while government and other risk-management supports crumble; and more and more cultivated land will be forfeited to development."
Really good points. This is why agvocacy matters. Its not about 'being right on the internet' or dominating a twitter feed. This is also why those interested in the 'free market' need to stay tuned. As food companies voluntarily put out 'free-from' labels and engage in other questionable marketing practices they are nurturing an environment and sentiment that can be energized to pass technologically restrictive laws - that have no grounding in the way things really are - ultimately increasing risk, reducing food security and sustainability on a national and global scale.
This is also challenging in light of research that indicates the challenges of science communication. See: Polarization of Controversial Science and Limitations of Science Literacy
Monday, December 18, 2017
Food and Farm Bill of Rights Stereotypes Modern Ag and Family Farms
In a recent Forbes article related to food trends that will shape 2018 one trend that stood out to me was #9, Politics and Food:
"Among the most troubling political moves to food businesses has been the country's withdrawal from the Paris Climate Agreement…There are two important focused efforts that will impact our food world in 2018. The first is the San Francisco ordinance that requires retailers to report antibiotic use by meat and poultry suppliers…this ordinance could also expand across the country.The second is the Farm Bill that will set in place eating and farming policy for a five-year period."
This is interesting given the political polarization we have seen with food preferences and beliefs. The article also references democratic representative Earl Blumenauer's "Fight for Food" and "Food and Farm Bill of Rights."
For instance in discussing the farm bill his web site states:
“The current Farm Bill provides little help to most American farmers and ranchers. 94% of all Farm Bill subsidy payments go to a few large-scale corporate farms that produce corn, rice, wheat, soy, cotton, and peanuts. These payments do little to support local food systems and growers. The result is that, we are paying the wrong people to grow the wrong things in the wrong places.”
“It's time for a better Food and Farm Bill that provides more Americans with healthy, locally grown food; that promotes sustainable farming practices; that reduces our impact on the environment; and that builds an economy around local farmers--not massive, corporations.”
We've seen this distorted view of subsidy payments before (see Four Big Questions about Big Ag, Subsidies, and Food ) ...and it overlooks the fact that these products are subsidized because that is what we eat vs. the other way around. It is also interesting that this language calls out "growing the wrong thing in the wrong places" yet in other places seems to favor subsidizing local production which would be contrary to comparative advantage as well as less sustainable. There is a lot here that may be hard to take issue with, but careful reading seems to put America's family farmers on defense.
The 2nd amendment in the Food and Farm Bill of Rights states: "Americans have a right to local supplies of fresh, healthy food, not subsidized food that makes them sick...Instead, the Farm Bill supports industrial meat production and processed foods that pose problems for human health and the environment."
This is some combination of ignorance of agricultural policy and production, hyperbole, and condescension. The causal connection between subsidized food and making people sick is tenuous at best. (a good read related to this is Tamar Haspel's recent article "Junk food is cheap and healthful food is expensive, but don’t blame the farm bill.")
Further the 6th amendment states: "Americans have a right to a healthy natural environment, and to a farm policy that does not exacerbate climate change...Our food and farm policies should reduce the emission of greenhouse gases from animal production, tilling practices, and crop selection, while minimizing energy demands.”
OK I agree but what do they have in mind? We've already pointed out the potentially conflicting goals of supporting local food and sustainability. And it is a fact that the current subsidies they are so critical of (like crop insurance) are for crops that are nearly all genetically modified and associated with sustainable practices like crop rotation, reduced tillage, improved biodiversity, as well as reduced emissions.
For the most part this is just a recycling of myths and stereotypes about modern agriculture to garner support from the usual critics. This campaign feeds these stereotypes and appears to provide them legitimacy that may eventually lead to policies that hurt family farmers as well as ultimately the environment and the future sustainability of agriculture.
See also:
Sustainably Feeding the World: Organic Food and Vegetables vs Conventional Commodities.
Agricultural Intensification and the Environment
The Cult of Statistical Significance...or...no bacon is not really as bad or worse than cigarettes!
Technical Efficiency, Yields, and Livestock Energy Conversion
What is the Most Effective Way to Mitigate Climate Change
"Among the most troubling political moves to food businesses has been the country's withdrawal from the Paris Climate Agreement…There are two important focused efforts that will impact our food world in 2018. The first is the San Francisco ordinance that requires retailers to report antibiotic use by meat and poultry suppliers…this ordinance could also expand across the country.The second is the Farm Bill that will set in place eating and farming policy for a five-year period."
This is interesting given the political polarization we have seen with food preferences and beliefs. The article also references democratic representative Earl Blumenauer's "Fight for Food" and "Food and Farm Bill of Rights."
For instance in discussing the farm bill his web site states:
“The current Farm Bill provides little help to most American farmers and ranchers. 94% of all Farm Bill subsidy payments go to a few large-scale corporate farms that produce corn, rice, wheat, soy, cotton, and peanuts. These payments do little to support local food systems and growers. The result is that, we are paying the wrong people to grow the wrong things in the wrong places.”
“It's time for a better Food and Farm Bill that provides more Americans with healthy, locally grown food; that promotes sustainable farming practices; that reduces our impact on the environment; and that builds an economy around local farmers--not massive, corporations.”
We've seen this distorted view of subsidy payments before (see Four Big Questions about Big Ag, Subsidies, and Food ) ...and it overlooks the fact that these products are subsidized because that is what we eat vs. the other way around. It is also interesting that this language calls out "growing the wrong thing in the wrong places" yet in other places seems to favor subsidizing local production which would be contrary to comparative advantage as well as less sustainable. There is a lot here that may be hard to take issue with, but careful reading seems to put America's family farmers on defense.
The 2nd amendment in the Food and Farm Bill of Rights states: "Americans have a right to local supplies of fresh, healthy food, not subsidized food that makes them sick...Instead, the Farm Bill supports industrial meat production and processed foods that pose problems for human health and the environment."
This is some combination of ignorance of agricultural policy and production, hyperbole, and condescension. The causal connection between subsidized food and making people sick is tenuous at best. (a good read related to this is Tamar Haspel's recent article "Junk food is cheap and healthful food is expensive, but don’t blame the farm bill.")
Further the 6th amendment states: "Americans have a right to a healthy natural environment, and to a farm policy that does not exacerbate climate change...Our food and farm policies should reduce the emission of greenhouse gases from animal production, tilling practices, and crop selection, while minimizing energy demands.”
OK I agree but what do they have in mind? We've already pointed out the potentially conflicting goals of supporting local food and sustainability. And it is a fact that the current subsidies they are so critical of (like crop insurance) are for crops that are nearly all genetically modified and associated with sustainable practices like crop rotation, reduced tillage, improved biodiversity, as well as reduced emissions.
For the most part this is just a recycling of myths and stereotypes about modern agriculture to garner support from the usual critics. This campaign feeds these stereotypes and appears to provide them legitimacy that may eventually lead to policies that hurt family farmers as well as ultimately the environment and the future sustainability of agriculture.
See also:
Sustainably Feeding the World: Organic Food and Vegetables vs Conventional Commodities.
Agricultural Intensification and the Environment
The Cult of Statistical Significance...or...no bacon is not really as bad or worse than cigarettes!
Technical Efficiency, Yields, and Livestock Energy Conversion
What is the Most Effective Way to Mitigate Climate Change
Friday, December 8, 2017
Updated Hypothetical Yield, Price, and Revenue Projections for December Corn
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
Last September I wrote:
"My basic projections based on this data implies that to get any where near $4/bu, taking all other USDA estimates on usage and harvested acres, corn yields need to be in the 163-164 bu/acre range. More complicated estimates and some adjustments with the usage numbers may be a little friendlier."
But those price projections were based on what seemed to be the loudest voices in the markets thinking that national corn yields would likely be somewhere less than 170 bushels/acre largely because of uncertainty of yields and variation due to late planting, as well as diminishing crop conditions. For example, from the Aug 21 crop conditions report:
---------------------------------------------------------------------------------------------------------------------------
Last September I wrote:
"My basic projections based on this data implies that to get any where near $4/bu, taking all other USDA estimates on usage and harvested acres, corn yields need to be in the 163-164 bu/acre range. More complicated estimates and some adjustments with the usage numbers may be a little friendlier."
| September WASDE | November | ||||
| Projected Yield: | 169.9 | 167 | 163.5 | 175.4 | 175.4 |
| Projected Stocks to Use: | 16.40% | 14.70% | 12.65% | 19.62% | 17.23% |
| Projected Price: | 3.36 | 3.62 | 4.04 | 2.95 | 3.24 |
But those price projections were based on what seemed to be the loudest voices in the markets thinking that national corn yields would likely be somewhere less than 170 bushels/acre largely because of uncertainty of yields and variation due to late planting, as well as diminishing crop conditions. For example, from the Aug 21 crop conditions report:
---------------------------------------------------------------------------------------------------------------------------
State : Very poor : Poor : Fair : Good : Excellent
----------------------------------------------------------------------------
: percent
:
Colorado .......: - 3 16 71 10
Illinois .......: 4 10 32 42 12
Indiana ........: 5 12 30 42 11
Iowa ...........: 3 9 27 51 10
Kansas .........: 4 10 29 43 14
Kentucky .......: 1 3 19 61 16
Michigan .......: 2 10 32 45 11
Minnesota ......: 1 2 15 65 17
Missouri .......: 3 6 30 50 11
Nebraska .......: 3 10 24 45 18
North Carolina .: 1 6 21 51 21
North Dakota ...: 6 11 33 45 5
Ohio ...........: 2 7 31 45 15
Pennsylvania ...: - 1 7 45 47
South Dakota ...: 9 18 31 40 2
Tennessee ......: - 2 12 51 35
Texas ..........: - 3 18 57 22
Wisconsin ......: 2 7 20 50 21
:
18 States ......: 3 9 26 48 14
:
Previous week ..: 3 9 26 49 13
Previous year ..: 2 5 18 54 21
----------------------------------------------------------------------------
Overall good to excellent was about 62% compared to 75% the previous year. (I'll point out that KY corn crops were exceptional with 71% at good to excellent).
So my price projections back in September were capped out based 169.9 yields which I thought at the time was the most conservative/pessimistic projection. Then came the October report with the 171.8 bushel per acre estimate and the most recent November 175.4 shocker. So above I have my price projections with this yield, first based on the September report numbers backing the stocks to use estimate ($2.95/but yikes) and then with the updated November numbers. Were it not for the changes in use (depicted below) prices could be even worse. With today's Dec 17 futures at $3.40 and and RSI at 45 (and bouncing around the 40's since September) it doesn't indicate oversold. With a naive nearest neighbor estimate based on last year's stock's to use we have an upper bound around $3.45. Looking out at March $3.52 and May futures at $3.61 looks like what you see is what you get with the December contract.
| U.S. Corn Balance Sheet | 2017-18 | 2017-18 | |
| WASDE | WASDE | ||
| Item | September | November | Change |
| Supply: | |||
| Planted Acreage (million acres) | 90.9 | 90.4 | -0.5 |
| Harvested Acreage | 83.5 | 83.1 | -0.4 |
| Yield (Bushels/Acre) | 169.9 | 175.4 | 5.5 |
| Beginning Stocks (million bushels) | 2,350 | 2,295 | -55 |
| Total Production | 14,184 | 14,578 | 394 |
| Imports | 50 | 50 | 0 |
| Total Supply | 16,585 | 16,922 | 337 |
| Consumption: | |||
| Feed and Residual (million bushels) | 5,475 | 5,575 | 100 |
| Ethanol (5,500) | |||
| Other Food, Seed, and Industrial | 6,925 | 6,935 | 10 |
| Exports | 1,850 | 1,925 | 75 |
| Total Consumption | 14,250 | 14,435 | 185 |
| Ending Stocks (million bushels) | 2,335 | 2,487 | 152 |
| Ending Stocks/Total Consumption (%) | 16.39% | 17.23% | 0.84% |
| 2017 Stocks to Use: | 17.23% | ||
| Projected Price: | 3.1538087981 | ||
| Projected Price (power): | 3.2414480127 | ||
| NN Estimate: | 3.45 |
*data pulled from: https://www.usda.gov/oce/commodity/wasde/index.htm
So where does this leave my revenue projections from back in September?
Lets look more at the assumptions I made back in September:
| Costs, Revenues, and Returns Per Acre | |
| Total Variable Costs | $400.00 |
| Fixed Costs | $75.00 |
| Total Operating Costs | $475.00 |
| Land | $175.00 |
| Total Land and Operation Costs | $650.00 |
| Yield | 175 |
| Price | $3.40 |
| Total Revenue | $595.00 |
| Returns/A | -$55.00 |
| Farm Level Costs, Revenues and Returns | |
| Total Acres: | 2,000 |
| Total Revenue: | $1,190,000.00 |
| Total Costs: | $1,300,000.00 |
| Total Return to Labor | -$110,000.00 |
And here are the updated scenarios:
| September | Nov (A) | Nov (B) | Nov(C) | |
| Projected National Yield: | 169.9 | 175.4 | 175.4 | 175.4 |
| Projected Stocks to Use: | 16.40% | 17.23% | 17.23% | 17.23 |
| Projected Price: | 3.36 | 3.24 | 3.4* | 3.4* |
| Return to Labor: | $44,000.00 | -$4,000.00 | $60,000.00 | -$110,000.00 |
The September, and November scenarios A and B are based on 200 on farm bushel per acre yields with projected and current (*) market prices while scenario C assumes the national average being the on farm yield at current (*) market prices. It is easy to see how much yield matters here. The price projections are all based on this. (or costs for that matter).
Per my last update, these numbers only reflect current prices and hypothetical production costs. My next update will look at how different marketing scenarios could have impacted revenues and returns.
Per my last update, these numbers only reflect current prices and hypothetical production costs. My next update will look at how different marketing scenarios could have impacted revenues and returns.
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
Friday, November 24, 2017
The future of independent crop consultants and killer ag apps
From: Is Bayer’s Highly-Anticipated xarvio App the Next Uber for Ag?
"Yes, like I said this not only recognition, it's mixing four components in real-time in the nozzle. And we also are convinced that, speaking with regulatory bodies like U.S. EPA, we'll be able to register entirely new crop protection products which are resistance breaking, and we can tell them and actually prove that we are using them across only maybe 1% of the total acreage."
That seems really powerful and nothing short of just awesome. I've been talking for a long time about the convergence of big data and genomics and the impact on productivity and sustainability in this space and this is just another potential example of how this can all come together. This also gets me thinking about an interview with Monsanto CEO Hugh Grant back in April 2016 where he discussed these kinds of applications in Monsanto's future:
"If I think about the next 30 or 40 years, I think through the use of data we’ll be applying these chemistries much more accurately and we’ll be applying them earlier, so applying them before diseases really take a hold in these crops or bugs are tearing these crops apart, so I think we’ll be more prophylactic, we’ll be more accurate and our selection of these chemistries will be a lot more discriminating. That’s kind of my vision of the future as through the use of data and bringing biology and science together, we’ll get much smarter about how we use these things, a bit like how the vision works for personalized medicine.”
That sounds a lot like how they are describing the Bayer xarvio app in the PrecisionAg article above. And, based on Grant's vision back in 2016, this all seems consistent with a strategy involving a Monsanto-Bayer merger.
However the article makes another interesting claim:
"The idea that a huge corporation like Bayer can largely automate and deliver agronomic recommendations remotely though a smartphone is a far greater danger to the future sustainability of any agronomic consulting operation, in this author's opinion, than a few large growers buying generic glyphosate off an online marketplace"
Based on what I have already said above, I can't doubt the value and potential disruption this app may bring with it. This makes me think of some parallels with apps and algorithms in the medical diagnosis space as well. Recently on LinkedIn data scientist Nasim Eftekhari offered an interesting perspective on this:
"With the recent news of the pneumonia detecting algorithm that has proved to be more accurate than human doctors, I see a lot of "who needs doctors anymore?" Or "are doctors going to lose their jobs?" Circulating around Linkedin. Guess who these algorithms learned from? Guess who labeled millions of images for the algorithm to find patterns? DOCTORS! What if new diseases and patterns emerge that are nowhere in the historical data? Who has to detect and interpret them? DOCTORS!
AI can't replace doctors, but can tremendously empower them! It can give them a heads up when they don't notice a pattern they have seen before. Or for problems they have not seen before, it can help them with thousands of similar examples and their diagnosis. It can give them access to the knowledge of smart doctors like themselves all around the world."
This reminded me of a discussion a few years back with economist Tyler Cowen on EconTalk with Russ Roberts:
"I would stress much more that humans can always complement robots. I'm not saying every human will be good at this. That's a big part of the problem. But a large number of humans will work very effectively with robots and become far more productive"
What Nasim says about doctors may largely apply to crop consulting, with some exceptions. Consulting might change, more focus on leveraging the array of tools, technology, and most importantly data being generated. As Grant noted back in the Here and Now interview:
"It takes about 40 decisions, from right around now until harvest in August or September, the grower takes about 40 decisions to produce a crop. Some of those decisions are highly technified, and others it’s because of what his mom and dad did or what he hears in the coffee shop or what he read in a magazine. So we’ve been populating those 40 decisions with data and I think by improving the quality of decisions, you increase the yield. I think the transition for Monsanto is increasingly in the next 10 years becoming a solutions-driven company, and coalescing the biology, the more accurate application of chemistry and the much smarter use of data. You know, these big green John Deere combines are streaming data off the field, one yard at a time, and it’s how you use that biological data and apply it back to the field to help growers with better insights, I think that’s going to be the next piece.”
Taken one decision at a time it might seem that a producer could cut out the middle man with a combination of a few apps. But they still might need someone that can step back and take a big picture systems view of the operation- that's where consultants can provide better insights and continue to create value. The way they do it just might not be the way I did 20 years ago with pen, paper, and a yardstick trotting across the field.
"Yes, like I said this not only recognition, it's mixing four components in real-time in the nozzle. And we also are convinced that, speaking with regulatory bodies like U.S. EPA, we'll be able to register entirely new crop protection products which are resistance breaking, and we can tell them and actually prove that we are using them across only maybe 1% of the total acreage."
That seems really powerful and nothing short of just awesome. I've been talking for a long time about the convergence of big data and genomics and the impact on productivity and sustainability in this space and this is just another potential example of how this can all come together. This also gets me thinking about an interview with Monsanto CEO Hugh Grant back in April 2016 where he discussed these kinds of applications in Monsanto's future:
"If I think about the next 30 or 40 years, I think through the use of data we’ll be applying these chemistries much more accurately and we’ll be applying them earlier, so applying them before diseases really take a hold in these crops or bugs are tearing these crops apart, so I think we’ll be more prophylactic, we’ll be more accurate and our selection of these chemistries will be a lot more discriminating. That’s kind of my vision of the future as through the use of data and bringing biology and science together, we’ll get much smarter about how we use these things, a bit like how the vision works for personalized medicine.”
That sounds a lot like how they are describing the Bayer xarvio app in the PrecisionAg article above. And, based on Grant's vision back in 2016, this all seems consistent with a strategy involving a Monsanto-Bayer merger.
However the article makes another interesting claim:
"The idea that a huge corporation like Bayer can largely automate and deliver agronomic recommendations remotely though a smartphone is a far greater danger to the future sustainability of any agronomic consulting operation, in this author's opinion, than a few large growers buying generic glyphosate off an online marketplace"
Based on what I have already said above, I can't doubt the value and potential disruption this app may bring with it. This makes me think of some parallels with apps and algorithms in the medical diagnosis space as well. Recently on LinkedIn data scientist Nasim Eftekhari offered an interesting perspective on this:
"With the recent news of the pneumonia detecting algorithm that has proved to be more accurate than human doctors, I see a lot of "who needs doctors anymore?" Or "are doctors going to lose their jobs?" Circulating around Linkedin. Guess who these algorithms learned from? Guess who labeled millions of images for the algorithm to find patterns? DOCTORS! What if new diseases and patterns emerge that are nowhere in the historical data? Who has to detect and interpret them? DOCTORS!
AI can't replace doctors, but can tremendously empower them! It can give them a heads up when they don't notice a pattern they have seen before. Or for problems they have not seen before, it can help them with thousands of similar examples and their diagnosis. It can give them access to the knowledge of smart doctors like themselves all around the world."
This reminded me of a discussion a few years back with economist Tyler Cowen on EconTalk with Russ Roberts:
"I would stress much more that humans can always complement robots. I'm not saying every human will be good at this. That's a big part of the problem. But a large number of humans will work very effectively with robots and become far more productive"
What Nasim says about doctors may largely apply to crop consulting, with some exceptions. Consulting might change, more focus on leveraging the array of tools, technology, and most importantly data being generated. As Grant noted back in the Here and Now interview:
"It takes about 40 decisions, from right around now until harvest in August or September, the grower takes about 40 decisions to produce a crop. Some of those decisions are highly technified, and others it’s because of what his mom and dad did or what he hears in the coffee shop or what he read in a magazine. So we’ve been populating those 40 decisions with data and I think by improving the quality of decisions, you increase the yield. I think the transition for Monsanto is increasingly in the next 10 years becoming a solutions-driven company, and coalescing the biology, the more accurate application of chemistry and the much smarter use of data. You know, these big green John Deere combines are streaming data off the field, one yard at a time, and it’s how you use that biological data and apply it back to the field to help growers with better insights, I think that’s going to be the next piece.”
Taken one decision at a time it might seem that a producer could cut out the middle man with a combination of a few apps. But they still might need someone that can step back and take a big picture systems view of the operation- that's where consultants can provide better insights and continue to create value. The way they do it just might not be the way I did 20 years ago with pen, paper, and a yardstick trotting across the field.
Sunday, November 5, 2017
CRISPR: Who’s pulling the wool over who’s eyes?
From: Amid GMO Strife Food Industry Vies for Public Trust in CRISPR (via NPR
(link)
http://n.pr/2yXk13G
"if this is genetic engineering, then call it that," says Perls. She says these producers are just trying to pull the wool over consumers' eyes with a strong public relations push."
Question: What do you call zapping a plant with radiation or dousing with chemical mutagens to create *random* gene edits vs. *targeted* ones? Well you can call it USDA Certified Organic, or slap a 'natural' label on it or have the butterfly logo assure you it's non-gmo. Who's really pulling the wool over who's eyes here?
(link)
http://n.pr/2yXk13G
"if this is genetic engineering, then call it that," says Perls. She says these producers are just trying to pull the wool over consumers' eyes with a strong public relations push."
Question: What do you call zapping a plant with radiation or dousing with chemical mutagens to create *random* gene edits vs. *targeted* ones? Well you can call it USDA Certified Organic, or slap a 'natural' label on it or have the butterfly logo assure you it's non-gmo. Who's really pulling the wool over who's eyes here?
Thursday, October 12, 2017
Food with Integrity is Catching On
There is a quote often attributed to Abraham Lincoln:
"You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."
Recently Mann Packing has taken that lesson to heart and received good publicity in relation to its decision to not label some of its products as GMO free:
"You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."
Recently Mann Packing has taken that lesson to heart and received good publicity in relation to its decision to not label some of its products as GMO free:
"The company is removing the non-GMO verified check from its single-cut lettuce products in its next print run, which could take place next month, said Gina Nucci, Mann’s director of corporate marketing. Mann did an about face after presenting its product packaging in Canada, where the Non-GMO Project Verified label is only allowed on products that have a GMO alternative."
"There is no GMO lettuce," said Nucci. "It made us go: Why are we doing this? We are perpetuating a fear that something is wrong with GMOs. We didn’t feel right doing that, so we chose to take that label off."
Read more at https://www.prweek.com/article/1446394/why-mann-packing-removing-non-gmo-labels-major-brands-add#B4Z8DsOqXMiBbVCu.99
This is impressive transparency in an age of free-from labeling.
Contrast this with companies like Chipotle taking the exact opposite stance engaging in nuanced and deceptive marketing practices to sell their products. Lately trying to play to both sides of the GMO debate, they have been engaged in a lawsuit (against them) in relation to some of its free-from GMO advertising because the supply chain for softdrinks and animal feed contain GMOs.
So they are agitating both the informed consumers that understand biotechnology is actually a good thing, as well as some of their customer base that is at least informed enough to understand the supply chain and ingredients. To Chipotle's detriment. (even though they may have won this one in court). Hopefully with groups like Peel Back the Label we will see more consumers becoming more informed as they catch on to what food with integrity really means.
Maybe we will even see lawsuits against companies using the kinds of misleading 'free-from' labels (like with lettuce) that Mann Packing abandoned on grounds of misleading advertising!
Maybe we will even see lawsuits against companies using the kinds of misleading 'free-from' labels (like with lettuce) that Mann Packing abandoned on grounds of misleading advertising!
Tuesday, October 3, 2017
Gluten Free Bread via CRISPR
CRISPR technology might make gluten free wheat a reality:
https://www.newscientist.com/article/2148596-genetically-modified-wheat-used-to-make-coeliac-friendly-bread/
For people with Coeliac or severe gluten intolerance this could be very exciting. However, there are a number of people choosing a gluten free diet for sociopolitical reasons that probably will continue to look for the 'gluten free' label bundled with non-GMO certification (which would most likely rule out CRISPR based advances like this). We have seen food companies abandon promising technologies (i.e. rBST in milk, finely textured beef) because of issues related to consumer acceptance/perceptions. Will they be willing to invest in commercialization of CRISPR based gluten free food given this history and the trend toward 'free-from' labeling? Will there be enough demand from current gluten free consumers that are otherwise agnostic to these fads and trends? Can we learn anything from other new consumer enhanced products like non-browing apples, the Simplot Innate potato or the Impossible Burger?
https://www.newscientist.com/article/2148596-genetically-modified-wheat-used-to-make-coeliac-friendly-bread/
For people with Coeliac or severe gluten intolerance this could be very exciting. However, there are a number of people choosing a gluten free diet for sociopolitical reasons that probably will continue to look for the 'gluten free' label bundled with non-GMO certification (which would most likely rule out CRISPR based advances like this). We have seen food companies abandon promising technologies (i.e. rBST in milk, finely textured beef) because of issues related to consumer acceptance/perceptions. Will they be willing to invest in commercialization of CRISPR based gluten free food given this history and the trend toward 'free-from' labeling? Will there be enough demand from current gluten free consumers that are otherwise agnostic to these fads and trends? Can we learn anything from other new consumer enhanced products like non-browing apples, the Simplot Innate potato or the Impossible Burger?
Sunday, September 24, 2017
2017 Hypothetical Revenue Projections for Corn
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
To supplement that analysis I have put together a hypothetical budget for corn based on University of Missouri extension estimates.
Using this spreadsheet I could make revenue projections for the three different yield and national average price projections assuming on farm yields of 200 bu/acre for a 2,000 acre operation:
| Projected National Yield: | 169.9 | 167 | 163.5 |
| Projected Stocks to Use: | 16.40% | 14.70% | 12.65% |
| Projected Price: | 3.36 | 3.62 | 4.04 |
| Revenue-Returns to Labor: | $44,000.00 | $148,000.00 | $316,000.00 |
Bear in mind this does not consider basis or specific marketing strategies and crop insurance tools that many producers may be using. However it gives an idea, based on the cost, yield, and price assumptions, the revenue implications that this can have for producers.
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
EU Court Rules in Favor of GMOs
EU Court Rules in Favor of GMOs
"From a scientific standpoint, today's ECJ ruling is a comforting one. The Court's decision reverses the 'precautionary principle,' which has been the EU's longstanding default argument that, in the absence of proof that a product is absolutely safe, unverified concerns about its safety are sufficient to ban either importation or cultivation," says Ron Moore, ASA president and farmer in Illinois. "Unfortunately for the last 20 years, this unscientific approach has given rise to an equally unscientific patchwork of restrictions or prohibitions on EU imports and cultivation of biotech crops by member states"
http://www.agweb.com/article/eu-court-rules-in-favor-of-gmos-NAA-sonja-begemann/
(Via AgWeb)
"From a scientific standpoint, today's ECJ ruling is a comforting one. The Court's decision reverses the 'precautionary principle,' which has been the EU's longstanding default argument that, in the absence of proof that a product is absolutely safe, unverified concerns about its safety are sufficient to ban either importation or cultivation," says Ron Moore, ASA president and farmer in Illinois. "Unfortunately for the last 20 years, this unscientific approach has given rise to an equally unscientific patchwork of restrictions or prohibitions on EU imports and cultivation of biotech crops by member states"
http://www.agweb.com/article/eu-court-rules-in-favor-of-gmos-NAA-sonja-begemann/
(Via AgWeb)
2016-17 Corn Marketing Scenario
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
Corn Production 2016-17 Marketing Plan September 23, 2017
A: 9/23/17 Harvested grain previously hedged with December futures at 3.99/bu. Bought back December futures at 3.53 and sold cash (-.25 basis) at 3.28 giving a net price of $3.74/bu
B: Sold December futures at 3.53/bu to hedge next 25% of crop to be repurchased and sold on cash in December.
C: Will store next 12.5% of crop unhedged and priced with a .33/bu cost of carry (to July) and sell on a rally.
this will leave at least a portion of the crop at risk but in a position to take advantage of a rally in the cash or futures market.
D: Will store last 12.5% of crop hedged with a 9/23/17 July futures hedge at 3.81/bu and .33 cost of carry.
Reasoning for Futures Hedges:
Fundamentals: WASDE yield estimates of 169/bu indicates a projected price bottom of 3.36/bu with some analyst projects of 167 bu/acre national average capping the projected price around 3.62. This price range does not indicate huge opportunities for big rallies and some potential risk for more loss of value.
Technicals: Although there seems to be a slight uptrend toward the fundamental cap around 3.62 in the weekly chart, with ADX < 20, RSI 46 indicating neither overbought or oversold, volume and open interest plunging don't indicate additional momentum for moves higher. The MACD also has been trending bearish. In the monthly chart, for the last 2 years prices have been trading in a channel with support and resistance very close to the fundamental levels of 3.36 and 3.62.
Given both technical and fundamental indicators aren't reassuring of higher prices + expected post harvest lows, sales and futures hedges + storage made the most sense.
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
Saturday, September 16, 2017
GMOs and Fractional Reserve Banking
I recall a few years back being part of a Facebook discussion group supposedly dedicated to 'food and farm freedom.' In general discussion was related to reducing taxes and government regulation in agricultural production. However, there was a lot of anti-tech anti-biotech anti-corporate sentiment. The idea was that big business (like biotech companies) were conspiring with big government to control the food supply. The solution was...wait for it...more government regulation. Never mind this was a libertarian focused group and never mind that existing biotech regulations make production and release of biotech varieties 20x costlier than conventional crops despite being substantially equivalent in terms of risk (of course in-plant pesticides might necessarily require additional testing from an environmental standpoint). So here was a free market discussion group with discussants arguing against government regulation of raw milk but calling for more stringent regulations if not actually banning biotech crops and other modern technologies in the name of safety and food access.
Changing subjects, recently George Selgin wrote an interesting piece regarding fractional reserve banking. Anyone familiar with libertarian and especially some Austrian leaning thinkers might have an idea of how much some abhor fractional reserve banking. The piece is a rather long historical look at fractional reserve banking and common law traditions going back a few centuries. But toward the end he notes:
"by encouraging people who might otherwise be inclined to oppose heavy-handed government regulation of private industries to favor, on ethical grounds, the outright prohibition of many ordinary banking transactions, the myth that fractional reserve banking is inherently fraudulent strengthens the hand of officials and others who want to hamstring bankers for quite different, but equally unsound, reasons, not excluding a general dislike of free enterprise."
I could not have put it better concerning raw milk drinking libertarians opposed to biotechnology:
by encouraging people who might otherwise be inclined to oppose heavy-handed government regulation of private industries to favor, on ethical grounds, the outright prohibition of many ordinary modern agricultural practices the myth that modern agriculture is inherently harmful or unsustainable strengthens the hand of officials and others who want to hamstring producers and others in the ag industry for quite different, but equally unsound, reasons, not excluding a general dislike of free enterprise.
References:
The "Bagging Rule" – Or Why We Shouldn't Arrest (All) the Bankers
BY GEORGE SELGIN SEPTEMBER 6, 2017 https://www.alt-m.org/2017/09/06/the-bagging-rule-or-why-we-shouldnt-arrest-all-the-bankers/
Henry Miller and Gregory Conko. 'Bootleggers and Biotechs.' Regulation. Summer 2003
Changing subjects, recently George Selgin wrote an interesting piece regarding fractional reserve banking. Anyone familiar with libertarian and especially some Austrian leaning thinkers might have an idea of how much some abhor fractional reserve banking. The piece is a rather long historical look at fractional reserve banking and common law traditions going back a few centuries. But toward the end he notes:
"by encouraging people who might otherwise be inclined to oppose heavy-handed government regulation of private industries to favor, on ethical grounds, the outright prohibition of many ordinary banking transactions, the myth that fractional reserve banking is inherently fraudulent strengthens the hand of officials and others who want to hamstring bankers for quite different, but equally unsound, reasons, not excluding a general dislike of free enterprise."
I could not have put it better concerning raw milk drinking libertarians opposed to biotechnology:
by encouraging people who might otherwise be inclined to oppose heavy-handed government regulation of private industries to favor, on ethical grounds, the outright prohibition of many ordinary modern agricultural practices the myth that modern agriculture is inherently harmful or unsustainable strengthens the hand of officials and others who want to hamstring producers and others in the ag industry for quite different, but equally unsound, reasons, not excluding a general dislike of free enterprise.
References:
The "Bagging Rule" – Or Why We Shouldn't Arrest (All) the Bankers
BY GEORGE SELGIN SEPTEMBER 6, 2017 https://www.alt-m.org/2017/09/06/the-bagging-rule-or-why-we-shouldnt-arrest-all-the-bankers/
Henry Miller and Gregory Conko. 'Bootleggers and Biotechs.' Regulation. Summer 2003
September 16, 2017 Market Commentary (Corn)
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
Back in July I wrote:
"prices picked up through the July 4th holiday (following USDA acreage reports) with a 12 month and year to date high on July 11th at 4.17. Much of this was reaction to weather vs fundamentals in those reports.
However, interest and volume were not at the elevated levels we saw back during the June high of 4.09. Also, the RSI was near 70 on the 10th and 11th approaching levels giving a potential technical indication of being overbought. This of course may just be the kind of volatility we expect in a weather market while there is probably somewhat firm fundamental support based on the late plantings, replants, and current crop conditions and lack of uniformity in the crop progress across the corn belt compounding the uncertainty about weather."
I'm not a technician but the market has been downhill since then. USDA has continued to release disappointing WASDE reports indicating strong yields despite the early spring fundamentals and crop conditions being less than stellar across key cornbelt states. Current good to excellent ratings for corn are at 61% vs. 74% a year ago. Additionally the crop is behind, with 75% denting vs 81% 2012-16 average and 21% mature vs 31% 2012-16 average.
The latest WASDE report actually raised the national average corn yield slightly to 169.9 bushels per acre, and based on estimated planted and harvested acres and usage gives an ending stocks to use ratio of about 16.4%. While not a record yield this would be one of the best (2nd best) yields in the last 5 years. Current December futures puts price just above $3.54/bushel with some carry going into March and May at 3.67/3.75/bu.
Many producers and analysts are having a hard time taking these numbers to the bank. But industry analysts on average are putting yields in the 165-167 bushel range. These alone are not entirely favorable for price conditions.
My basic projections based on this data implies that to get any where near $4/bu, taking all other USDA estimates on usage and harvested acres, corn yields need to be in the 163-164 bu/acre range. More complicated estimates and some adjustments with the usage numbers may be a little friendlier.
Things to look forward to might be technical indicators for an upward trend in price, as well as fundamentals related to actual harvested acres and yields once more progress is made in key corn producing states and those on the outlying areas that have seen better crop and growing conditions.
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
Back in July I wrote:
"prices picked up through the July 4th holiday (following USDA acreage reports) with a 12 month and year to date high on July 11th at 4.17. Much of this was reaction to weather vs fundamentals in those reports.
However, interest and volume were not at the elevated levels we saw back during the June high of 4.09. Also, the RSI was near 70 on the 10th and 11th approaching levels giving a potential technical indication of being overbought. This of course may just be the kind of volatility we expect in a weather market while there is probably somewhat firm fundamental support based on the late plantings, replants, and current crop conditions and lack of uniformity in the crop progress across the corn belt compounding the uncertainty about weather."
I'm not a technician but the market has been downhill since then. USDA has continued to release disappointing WASDE reports indicating strong yields despite the early spring fundamentals and crop conditions being less than stellar across key cornbelt states. Current good to excellent ratings for corn are at 61% vs. 74% a year ago. Additionally the crop is behind, with 75% denting vs 81% 2012-16 average and 21% mature vs 31% 2012-16 average.
The latest WASDE report actually raised the national average corn yield slightly to 169.9 bushels per acre, and based on estimated planted and harvested acres and usage gives an ending stocks to use ratio of about 16.4%. While not a record yield this would be one of the best (2nd best) yields in the last 5 years. Current December futures puts price just above $3.54/bushel with some carry going into March and May at 3.67/3.75/bu.
Many producers and analysts are having a hard time taking these numbers to the bank. But industry analysts on average are putting yields in the 165-167 bushel range. These alone are not entirely favorable for price conditions.
| Year | Stocks to Use | Price | Yield |
| 2012 | 0.0740774159 | 6.89 | 123.1 |
| 2013 | 0.0915712799 | 4.46 | 158.1 |
| 2014 | 0.1259092232 | 3.7 | 171 |
| 2015 | 0.1271223653 | 3.61 | 168.4 |
| 2016 | 0.1873713109 | 3.45 | 174.6 |
My basic projections based on this data implies that to get any where near $4/bu, taking all other USDA estimates on usage and harvested acres, corn yields need to be in the 163-164 bu/acre range. More complicated estimates and some adjustments with the usage numbers may be a little friendlier.
| Projected Yield: | 169.9 | 167 | 163.5 |
| Projected Stocks to Use: | 16.40% | 14.70% | 12.65% |
| Projected Price: | 3.36 | 3.62 | 4.04 |
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
Saturday, August 19, 2017
Can Index Funds Hamper Price Discovery?
There are some concerned that too much money going into ETFs and not enough active investment will cause issues with price discovery.
https://www.wsj.com/articles/worlds-biggest-pension-fund-wants-to-stop-index-trackers-eating-the-economy-1502974668
Sounds familiar: https://www.wsj.com/articles/welcome-to-the-meat-casino-the-cattle-futures-market-descends-into-chaos-1471475438
There has
https://www.wsj.com/articles/worlds-biggest-pension-fund-wants-to-stop-index-trackers-eating-the-economy-1502974668
Sounds familiar: https://www.wsj.com/articles/welcome-to-the-meat-casino-the-cattle-futures-market-descends-into-chaos-1471475438
There has
Gates Notes: Sustainable Beef for Developing Smallholder Agriculture
Gates Notes:
"While there are legitimate questions about whether the world can meet its appetite for animal products without destroying the environment, it’s a fact that many poor people rely on cattle for both nutrition and income. I believe they should be able to raise cattle as efficiently as farmers in rich countries do….For them, meat and dairy are a great source of high-quality proteins that help children fully develop mentally and physically. Just 20 grams of animal protein a day can combat malnutrition, which is why our foundation’s nutrition strategy wants to get more meat, dairy, and eggs into the diets of children in Africa. Cattle are also a huge economic driver in some parts of Africa. In Ethiopia alone, cattle account for 45 percent of their agricultural GDP. In addition, livestock can actually contribute to ecosystems by stimulating pasture growth, enhancing biodiversity, and recycling energy and nutrients….As more people in poor countries move into the middle class, they will likely eat more beef and drink more milk. But we can mitigate the impact of that growth on the environment by increasing production from the cows they already have."
Noahpinion: Summing up my thoughts on macroeconomics
Comment from a6z: Macroeconomics
"It's more than commerce. It's the big themes. The rise and fall of civilizations. Freedom versus authority, the one and the many, the center and the periphery. Politics, broadly understood; therefore ethics, at least normatively described. Epistemology, too."
Wednesday, August 9, 2017
Agricultural Intensification and the Environment
This story puts blame on the meat industry for largest ever "dead zone" in the Gulf of Mexico.
The authors of the original study are advocating reduction or elimination of meat consumption.
Others tend to think focusing more on 'low-input' agriculture is the solution. However this study finds organic farming systems have a 37% higher eutrophication potential. (HT: Breakthrough Blog)
Note also, in the study I cite here low input agriculture is inherently coupled with large scale grain and livestock production.
This paper (using simulation) finds a land sparing and GHG mitigating effect from intensification of livestock production in Brazil.
This paper finds "investment in yield improvements compares favorably with other commonly proposed mitigation strategies. Further yield improvements should therefore be prominent among efforts to reduce future GHG emissions."
References:
Comparative analysis of environmental impacts of agricultural production systems, agricultural input efficiency, and food choice
Michael Clark1,4 and David Tilman2,3
Published 16 June 2017 • © 2017 IOP Publishing Ltd
Environmental Research Letters, Volume 12, Number 6
To what extent does organic farming rely on nutrient inflows from conventional farming?
Benjamin Nowak1,2, Thomas Nesme1,2, Christophe David3 and Sylvain Pellerin1,2
Published 5 December 2013 2013 IOP Publishing Ltd
Environmental Research Letters, Volume 8, Number 4
Greenhouse gas mitigation by agricultural intensification Jennifer A. Burneya,Steven J. Davisc, and David B. Lobella.PNAS June 29, 2010 vol. 107 no. 26 12052-12057
The authors of the original study are advocating reduction or elimination of meat consumption.
Others tend to think focusing more on 'low-input' agriculture is the solution. However this study finds organic farming systems have a 37% higher eutrophication potential. (HT: Breakthrough Blog)
This paper (using simulation) finds a land sparing and GHG mitigating effect from intensification of livestock production in Brazil.
This paper finds "investment in yield improvements compares favorably with other commonly proposed mitigation strategies. Further yield improvements should therefore be prominent among efforts to reduce future GHG emissions."
References:
Comparative analysis of environmental impacts of agricultural production systems, agricultural input efficiency, and food choice
Michael Clark1,4 and David Tilman2,3
Published 16 June 2017 • © 2017 IOP Publishing Ltd
Environmental Research Letters, Volume 12, Number 6
To what extent does organic farming rely on nutrient inflows from conventional farming?
Benjamin Nowak1,2, Thomas Nesme1,2, Christophe David3 and Sylvain Pellerin1,2
Published 5 December 2013 2013 IOP Publishing Ltd
Environmental Research Letters, Volume 8, Number 4
Greenhouse gas mitigation by agricultural intensification Jennifer A. Burneya,Steven J. Davisc, and David B. Lobella.PNAS June 29, 2010 vol. 107 no. 26 12052-12057
Britain to Ban New Gas and Diesel Autos by 2040
Well in GB they plan to ban the sale of new gasoline and diesel cars by 2040. I'd really like to see the cost benefit analysis on that especially as it relates to GHG emissions.
According to this story, about 2.7 million cars were registered in GB in 2016.
Recall, by some estimates GHG reductions associated with planted areas of biotech crops in the U.S. were equivalent to removal of almost 11 million cars!
Could they not just import more corn from the U.S. and call it even?
According to this story, about 2.7 million cars were registered in GB in 2016.
Recall, by some estimates GHG reductions associated with planted areas of biotech crops in the U.S. were equivalent to removal of almost 11 million cars!
Could they not just import more corn from the U.S. and call it even?
Saturday, August 5, 2017
Saturday Evening Post
Kevin Folta has a great way with words discussing the fake news in NYT regarding glyphosate in Ben and Jerry's ice cream:
"There was a time that newspapers published verifiable information, checked facts, and didn’t simply post the intellectually bankrupt messages of activist groups. The New York Times now double dips to a new low, confirming their war on food, war on farmers, war on science, and war on reason. In the days of fake news this takes the cake — al a mode."
Read more....
The Farmer Hayek blog never lets you forget how important theory is....and how useful. A nice point from a recent post:
"It may be tautologous to say that “people prefer their own self interest” where “their own self interest” is whatever they subjectively desire, but it is certainly useful. Focusing on the subjectivity of costs and benefits dramatically increases economists’ ability to understand human behavior. Defining self interest narrowly, such that only objective costs and benefits are considered relevant is actually a step backward, even if it is more consistent with, say, the methods of physicists."
"There was a time that newspapers published verifiable information, checked facts, and didn’t simply post the intellectually bankrupt messages of activist groups. The New York Times now double dips to a new low, confirming their war on food, war on farmers, war on science, and war on reason. In the days of fake news this takes the cake — al a mode."
Read more....
The Farmer Hayek blog never lets you forget how important theory is....and how useful. A nice point from a recent post:
"It may be tautologous to say that “people prefer their own self interest” where “their own self interest” is whatever they subjectively desire, but it is certainly useful. Focusing on the subjectivity of costs and benefits dramatically increases economists’ ability to understand human behavior. Defining self interest narrowly, such that only objective costs and benefits are considered relevant is actually a step backward, even if it is more consistent with, say, the methods of physicists."
Thursday, July 27, 2017
What is the most effective way to mitigate climate change?
Jayson Lusk discusses this article:
The climate mitigation gap: education and government recommendations miss the most effective individual actions
Seth Wynes1,2,3 and Kimberly A Nicholas1
Published 12 July 2017 • © 2017 IOP Publishing Ltd
Environmental Research Letters, Volume 12, Number 7
One of the top things on the list (#2) was living car free. That reminds me of a post I wrote a couple years back over at Economic Sense: Hybrid Corn vs Hybrid Cars. In that post I noted:
"According to research from PG Economics, in 2009 alone, greenhouse gas reductions associated with biotechnology were equivalent to removing 7.8 million cars from the road."
It would be interesting if we could get data to put this in terms of individual consumer choices. To what extent would changing from an organic GMO free diet to a conventional diet containing GMOs impact our carbon foot print? I'm not sure this is really a practical question, most people probably consume a mix of foods (even Whole Foods shoppers) and on an individual level this may not make a big difference. But there definitely could be an aggregate effect. I have not reviewed the methods in this particular study, but as a conversation piece it brings up a very relevant concern - what would happen if consumer sentiments and the regulatory environment continued to disincentivize the production of genetically engineered foods? (we've seen this with finely textured beef for sure, and rBSt) While other studies might provide different estimates of the effect size of CO2 emissions related to biotech adoption, at least directionally our experience suggests that these technologies make it possible to produce the same or additional levels of output while reducing the toxicity of chemical applications, complementing crop rotation and no till practices that reduce fertilizer runoff and pollution, as well as require less energy moving very heavy equipment across fields (which in turn would reduce CO2 at some level).
In terms of practical policy applications, how much coercion/regulation/taxation/incentivization would be required to convince or force 8 million people to give up their cars? It seems a lot easier for me as a consumer to freely choose to consume a mountain dew with high fructose corn syrup derived from GMO corn than to make a huge change in my lifestyle like going car free. And it seems like a very easy choice for farmers to keep planting biotech.
***UPDATED (July 28, 2017): I just realized there has been an update to this study:
Environmental impacts of genetically modified (GM) crop use 1996–2015: Impacts on pesticide use and carbon emissions
Graham Brookes & Peter Barfoot
GM Crops & Food Vol. 8 , Iss. 2,2017
Link: http://www.tandfonline.com/doi/full/10.1080/21645698.2017.1309490
The updated number of car equivalent levels of CO2 reductions due to area planted to biotech crops is closer to 12 million (11.9).
Reference:
GM crops: global socio-economic and environmental impacts 1996-2009. Brookes and Barfoot.
The climate mitigation gap: education and government recommendations miss the most effective individual actions
Seth Wynes1,2,3 and Kimberly A Nicholas1
Published 12 July 2017 • © 2017 IOP Publishing Ltd
Environmental Research Letters, Volume 12, Number 7
One of the top things on the list (#2) was living car free. That reminds me of a post I wrote a couple years back over at Economic Sense: Hybrid Corn vs Hybrid Cars. In that post I noted:
"According to research from PG Economics, in 2009 alone, greenhouse gas reductions associated with biotechnology were equivalent to removing 7.8 million cars from the road."
It would be interesting if we could get data to put this in terms of individual consumer choices. To what extent would changing from an organic GMO free diet to a conventional diet containing GMOs impact our carbon foot print? I'm not sure this is really a practical question, most people probably consume a mix of foods (even Whole Foods shoppers) and on an individual level this may not make a big difference. But there definitely could be an aggregate effect. I have not reviewed the methods in this particular study, but as a conversation piece it brings up a very relevant concern - what would happen if consumer sentiments and the regulatory environment continued to disincentivize the production of genetically engineered foods? (we've seen this with finely textured beef for sure, and rBSt) While other studies might provide different estimates of the effect size of CO2 emissions related to biotech adoption, at least directionally our experience suggests that these technologies make it possible to produce the same or additional levels of output while reducing the toxicity of chemical applications, complementing crop rotation and no till practices that reduce fertilizer runoff and pollution, as well as require less energy moving very heavy equipment across fields (which in turn would reduce CO2 at some level).
In terms of practical policy applications, how much coercion/regulation/taxation/incentivization would be required to convince or force 8 million people to give up their cars? It seems a lot easier for me as a consumer to freely choose to consume a mountain dew with high fructose corn syrup derived from GMO corn than to make a huge change in my lifestyle like going car free. And it seems like a very easy choice for farmers to keep planting biotech.
***UPDATED (July 28, 2017): I just realized there has been an update to this study:
Environmental impacts of genetically modified (GM) crop use 1996–2015: Impacts on pesticide use and carbon emissions
Graham Brookes & Peter Barfoot
GM Crops & Food Vol. 8 , Iss. 2,2017
Link: http://www.tandfonline.com/doi/full/10.1080/21645698.2017.1309490
The updated number of car equivalent levels of CO2 reductions due to area planted to biotech crops is closer to 12 million (11.9).
Reference:
GM crops: global socio-economic and environmental impacts 1996-2009. Brookes and Barfoot.
Wednesday, July 26, 2017
Technical Efficiency, Agricultural Yields, and Livestock Energy Conversion
Jayson Lusk points to the following 2013 Environmental Letters paper:
Redefining agricultural yields: from tonnes to people nourished per hectare
Emily S Cassidy, Paul C West, James S Gerber and Jonathan A Foley
Published 1 August 2013 2013
Environmental Research Letters, Volume 8, Number 3
He has a lot of interesting things to say about this work. He uses this analogy:
"there are two ways to view livestock. One is that they are inefficient - using up a lot of energy to make food. Another is that they are good at converting one form of energy that is highly storeable/transportable but untasty (field corn, soy, sorghum) to another form (eggs, meat, dairy) that we like to eat. Rarely do these sorts of research papers include the the calories (or energy) used in food processing. It is a mistake to compare the calories in steak to the calories in a wheat kernel. The wheat kernel requires energy/processing to convert to flour and then more energy to get pasta or bread."
He also links to this report from the Council for Science and Technology that does a deep dive looking at this conversion in livestock production.
I also like the way 'efficiency' is stated in Heyne, Boettke, and Prychitco's The Economic Way of Thinking text.
"efficiency is essentially an evaluative term. It always has to do with the ratio fo the value of output to the value of input" in effect it depends on what people want done and how they value what they want done. "It follows that the efficiency of any process can change with changes in valuations."
What I am getting at is that maybe people prefer to have sustenance from beef vs rice and we have to give weight to that in a policy framework. Physical and technical facts alone can never fully determine efficiency. That's what makes economics so powerful. Its the study of people's choices and how they are made compatible. It is way more than just the study of the technical allocation of resources because it forces us to consider each individual's preferences based on the knowledge of their specific circumstances of time and place.
Redefining agricultural yields: from tonnes to people nourished per hectare
Emily S Cassidy, Paul C West, James S Gerber and Jonathan A Foley
Published 1 August 2013 2013
Environmental Research Letters, Volume 8, Number 3
He has a lot of interesting things to say about this work. He uses this analogy:
"there are two ways to view livestock. One is that they are inefficient - using up a lot of energy to make food. Another is that they are good at converting one form of energy that is highly storeable/transportable but untasty (field corn, soy, sorghum) to another form (eggs, meat, dairy) that we like to eat. Rarely do these sorts of research papers include the the calories (or energy) used in food processing. It is a mistake to compare the calories in steak to the calories in a wheat kernel. The wheat kernel requires energy/processing to convert to flour and then more energy to get pasta or bread."
He also links to this report from the Council for Science and Technology that does a deep dive looking at this conversion in livestock production.
I also like the way 'efficiency' is stated in Heyne, Boettke, and Prychitco's The Economic Way of Thinking text.
"efficiency is essentially an evaluative term. It always has to do with the ratio fo the value of output to the value of input" in effect it depends on what people want done and how they value what they want done. "It follows that the efficiency of any process can change with changes in valuations."
What I am getting at is that maybe people prefer to have sustenance from beef vs rice and we have to give weight to that in a policy framework. Physical and technical facts alone can never fully determine efficiency. That's what makes economics so powerful. Its the study of people's choices and how they are made compatible. It is way more than just the study of the technical allocation of resources because it forces us to consider each individual's preferences based on the knowledge of their specific circumstances of time and place.
The NYT and OCA Scream for Organic Ice Cream
There recently was a piece in the NYT discussing the finding of trace amounts of glyphosate in Ben and Jerry's ice cream.
https://www.google.com/amp/s/mobile.nytimes.com/2017/07/25/dining/ben-and-jerrys-ice-cream-herbicide-glyphosate.amp.html
A nod was given to IARC's finding of glyphosate as 'probably carcinogenic' despite the fact that data critical to the decision was withheld, and admissions that had the data been included, the classification would not have been upheld.
From the NYT:
"a 75-pound child would have to consume 145,000 eight-ounce servings a day of Ben & Jerry’s Chocolate Fudge Brownie ice cream to hit the limit set by the Environmental Protection Agency, the government body charged with setting a ceiling on the amount of glyphosate allowed in food. An adult would have to eat 290,000 servings to hit the agency’s cutoff."
So really this is a non-issue and does not merit a story worthy of any major news outlet. The real story seems to be how the Organic Consumer's Association is using this venue to pressure companies to pursue organic certification. It reveals just how powerful this lobby can be. I've speculated in the past that one reason that there was so much lobbying in favor of GMO labeling initiatives was because groups like the OCA view biotechnology (and associated reduced emissions, soil conservation, reduced pollution/runoff, and reductions in use of toxic herbicides and pesticides) as a competitor to organic production. In reality its more likely the case that they are banking on using theatre and fear to drive more sales vs. any real belief that modern technological advances offer real choices in sustainable food to compete with their 'brand.'
https://www.google.com/amp/s/mobile.nytimes.com/2017/07/25/dining/ben-and-jerrys-ice-cream-herbicide-glyphosate.amp.html
A nod was given to IARC's finding of glyphosate as 'probably carcinogenic' despite the fact that data critical to the decision was withheld, and admissions that had the data been included, the classification would not have been upheld.
From the NYT:
"a 75-pound child would have to consume 145,000 eight-ounce servings a day of Ben & Jerry’s Chocolate Fudge Brownie ice cream to hit the limit set by the Environmental Protection Agency, the government body charged with setting a ceiling on the amount of glyphosate allowed in food. An adult would have to eat 290,000 servings to hit the agency’s cutoff."
So really this is a non-issue and does not merit a story worthy of any major news outlet. The real story seems to be how the Organic Consumer's Association is using this venue to pressure companies to pursue organic certification. It reveals just how powerful this lobby can be. I've speculated in the past that one reason that there was so much lobbying in favor of GMO labeling initiatives was because groups like the OCA view biotechnology (and associated reduced emissions, soil conservation, reduced pollution/runoff, and reductions in use of toxic herbicides and pesticides) as a competitor to organic production. In reality its more likely the case that they are banking on using theatre and fear to drive more sales vs. any real belief that modern technological advances offer real choices in sustainable food to compete with their 'brand.'
Wednesday, July 19, 2017
Food Costs, Satellite Data, and Diversity within Species
Russ Roberts talks with Tomar Haspel about food costs, animal welfare, and modern agriculure on EconTalk.
A couple great discussions regarding the future ag macro environment and satellite based crop data in finance.
More on the myth of monoculture - biodiversity within species in Nature.
"the health of an ecosystem may depend not only on the number of species present, but also on the diversity of their traits. …Equally important to keeping an ecosystem healthy and resilient are the species' different characteristics and the things they can do — measured in terms of specific traits such as body size or branch length."
See also:
Big Data + Genomics Not Your Grandparent's Monoculture
Crop Diversity
A couple great discussions regarding the future ag macro environment and satellite based crop data in finance.
More on the myth of monoculture - biodiversity within species in Nature.
"the health of an ecosystem may depend not only on the number of species present, but also on the diversity of their traits. …Equally important to keeping an ecosystem healthy and resilient are the species' different characteristics and the things they can do — measured in terms of specific traits such as body size or branch length."
See also:
Big Data + Genomics Not Your Grandparent's Monoculture
Crop Diversity
Why AgEcon?
Another reason to study agricultural and applied economics:
"Foster says because we're entering an era of data-driven decision making, "the students who can position themselves to be strong from an analytical and problem-solving perspective are going to have an edge in the market."
http://modernfarmer.com/2015/09/agriculture-jobs/
See also:
Why Study Agricultural/Applied Economics
Value of Graduate Education
"Foster says because we're entering an era of data-driven decision making, "the students who can position themselves to be strong from an analytical and problem-solving perspective are going to have an edge in the market."
http://modernfarmer.com/2015/09/agriculture-jobs/
See also:
Why Study Agricultural/Applied Economics
Value of Graduate Education
Thursday, July 13, 2017
Market Commentary July 13, 2017
On June 8 we saw a high of 4.09 in the dec17 corn contract with some heavy trading volume and open interest behind it. From there we saw a gradual decline until late June when prices picked up through the July 4th holiday (following USDA acreage reports) with a 12 month and year to date high on July 11th at 4.17. Much of this was reaction to weather vs fundamentals in those reports.
However, interest and volume were not at the elevated levels we saw back during the June high of 4.09. Also, the RSI was near 70 on the 10th and 11th approaching levels giving a potential technical indication of being overbought. This of course may just be the kind of volatility we expect in a weather market while there is probably somewhat firm fundamental support based on the late plantings, replants, and current crop conditions and lack of uniformity in the crop progress across the corn belt compounding the uncertainty about weather.
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
However, interest and volume were not at the elevated levels we saw back during the June high of 4.09. Also, the RSI was near 70 on the 10th and 11th approaching levels giving a potential technical indication of being overbought. This of course may just be the kind of volatility we expect in a weather market while there is probably somewhat firm fundamental support based on the late plantings, replants, and current crop conditions and lack of uniformity in the crop progress across the corn belt compounding the uncertainty about weather.
***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. *****
Sunday, July 2, 2017
Simulating Impacts of Food Taxes and Subsidies
Just last week I posted about food subsidies. I asked:
"Could you make the argument that simply shifting money toward programs related to fruits and vegetables would have a large enough impact on price to influence consumption? How much money would that take and what would the effect size be?"
This video discusses a PLOS medicine study that finds positive health benefits related to subsidies for fruits and vegetables and the referenced study (from a 'headline' reading) indicates a 10% subsidy could have a meaningful impact on health:
"Could you make the argument that simply shifting money toward programs related to fruits and vegetables would have a large enough impact on price to influence consumption? How much money would that take and what would the effect size be?"
This video discusses a PLOS medicine study that finds positive health benefits related to subsidies for fruits and vegetables and the referenced study (from a 'headline' reading) indicates a 10% subsidy could have a meaningful impact on health:
The video makes no direct reference to a study. However based on this reading I think the following are the studies mentioned in the video, the first being the primary reference:
Reducing US cardiovascular disease burden and disparities through national and targeted dietary policies: A modelling study. PLOS Medicine. June 6, 2017
https://doi.org/10.1371/journal.pmed.1002311
Taxes and Subsidies for Improving Diet and Population Health in Australia: A Cost-Effectiveness Modelling Study. PLOS Medicine. February 14, 2017
https://doi.org/10.1371/journal.pmed.1002232
Both papers are simulations based on assumptions related to elasticities and projected health outcomes (vs. empirical findings). One thing advocated is to create a revenue neutral policy that taxes soda and subsidizes fruits and vegetables. I'm skeptical, but if I want to give any credit I could say cynically that in this way maybe a soda tax could be useful even if it fails to have any meaningful impact on consumption or health.
See also:
Are Soda Taxes Effective?
Four Big Questions about Farm Subsidies