AlO-Lancasttr Farming, Saturday, July 26,1986
OPINION
Beef In The Bam
The Futures Market has come
under scrutiny in recent months,
especially the Cattle Futures. At
the urging of the National Cat
tlemen’s Association, the house
and senate agricultural com
mitteefm Washington have begun
to organue an investigation of this
highly volatile market. The cat
tlemen want to know what effect
this market has on the cash
markets. This came about for one
reason because of the reported
lowering of a bid by packer to a
farm after the packer saw the
Futures Market prices were lower
from the whole herd dairy buyout.
The cattlemen get the im
pression that the markets are
being manipulated and that the
Futures Market creates a down
ward bias on cash prices. If this is
true then we suppose an upward
Futures Market could have an
upward bias on the market, too.
But that’s not the point of this
discussion.
To understand a little about the
Futures Market, you need to
realize we are dealing with a
highly leveraged market. In no
other contract situation can you
put up only about 10 percent of the
value of the product and in essence
control the total product. For
example, for about $6OO depending
on the brokerage house, you can
buy or sell a 5,000 bushel contract
of com. Five thousand bushels of
com at $2 per bushel is worth
$lO,OOO. So for $6OO, you can add
$lO,OOO of com to your net worth.
However, here’s what most
farmers don’t understand. The
price moves on the $lO,OOO value,
not on the $6OO investment. So for
every cent move in the price of
com the value of your contract
moves $5O. If it moves in your
•favor, you’re happy. But if it
moves against your position, it
doesn’t take long to eat into the
$6OO leverage money you have put
up to hold the contract.
The whole idea behind the
Futures Market is to allow the
producer/farmer to transfer some
of the risks of production to the
speculators. And because of the
intense speculative pressures
created by the highly leveraged
market, speculators run scared
very easily. And the Futures
Market moves accordingly.
But that shouldn’t bother the
farmers as long as the farmer has
FARM FORUM
lUR READERS WRITE
Dear Editor:
Many thanks to you for printing
such good advice in “OPINION”
on Saturday, July 19, 1986. I do
hope you have many more write
ups in future issues of Lancaster
Fanning.
I have a friend that had his hand
in a com picker and lost some
fingers. He is working hard again
not joined the speculators. To use
the market as it’s intended for a
hedge, the farmer must always
enter the Futures Market from the
opposite side of the product he has
in his bam or fields. If he owns
cattle in the bam and wants to
i hedge park of them, he should sell
cattle in the Futures Market when
the speculators run the price high
enough that the farmer can make a
good profit by selling.
Certainly the cattlemen are
right. The Futures Market needs to
be constantly investigated to make
sure there are no manipulating
practices going on other than the
normal speculative pressures.
They are also right to ask other
things, such as: In the absence of
Cattle Futures, what changes
would occur in relationships
between feeder cattle prices and
fed cattle prices? What changes
would occur in the price discovery
process and would the cattle
market be competitive?
They are right to ask about
packer contracting with feeders.
Sometimes packers become short
hedgers in the market dispite their
being purchasers of the product
they are hedging. What effect does
this have on the futures and cash
prices? If forward contracting by
packers becomes the dominate
method of marketing fed cattle,
how well will cash markets reflect
current true values of cattle? Also
does the present delivery system
for Cattle Futures contracts
provide enough incentive to keep
long hedgers in the market through
the delivery month? When the
price converges in the spot month
at the delivery point with the
lowest price, does this result in a
downward bias in cattle prices?
And also, do Cattle Futures and
cash prices accurately reflect
cattle supply and demand?
All these things are being in
vestigated. And all are proper
questions from the cattlemen. But
as long as we still have the Futures
Market, the most important
question for the farmer to ask is.
Can I lock in a good profit by
selling a Futures contract now? If I
can, I will do it. If I can’t, I will
stay out of the market.
And in addition, the farmer must
ask, Have I resisted the temptation
to join the speculators and add to
my risk by buying cattle in the
Futures Market when I already
have plenty of beef in the bam?
milking cows and doing farm
work. Sometimes he will fall into
the gutter but picks himself up and
keeps going.
I have wh. face polled herefords,
chickens and am interested in
vegetables.
I enjoy reading Lancaster
Farming. You’re doing a good jot
as editor. Hope to hear from you
Take care. Have a nice day.
Sincerely
Roland Kamodj
Monongahela, PI
jm^ Mß
NOW IS
THE TIME
By Jay Irwin
Lancaster County Agriculture Agent
To Evaluate Weed Control
By this time of year, any weed
problems in your fields are fairly
evident and probably beyond
control. But now is a good time to
develop an effective program for
next year.
The easiest way to check for the
effectiveness of different her
bicides is to leave a small part of
your field untreated, this gives you
a chance to tell what weeds were
controlled and the ones that were
missed. However, if you didn’t do
this, you should be able to find
spots where the sprays missed.
There will usually be areas near
the ends of the fields and will serve
your purpose quite well.
If several types of weeds seemed
to have escaped control, you
should check the herbicide con-
Berks County 4-H Fair, 4-H and Ag
Centers, Leesport.
Huntingdon County 4-H Horse
Roundup, Wood Valley
Wrangler Ring, 9 a.m.
North American Alfalfa Im
provement Conference, St.
Paul, Minn., Saint Paul Hotel;
continues through July 31.
Annual Meeting, Pa. Bakers
Dear Editor:
I’ve read the market reports and
noted under the Leola report
zoning restrictions that only
produce from Lancaster county is
allowed to be sold there. This is an
unjust and unlawful case of
protectionism. The 14th amend
ment of the U.S. Constitution
plainly says “that no state may
enact or enforce a law which shaU
abridge the privileges or im
munities of citizens of the United
States; nor shall any state deprive
any person of life, liberty or
property, without due process of
law, nor deny any person within its
juristiction the equal protection of
the laws.”
This means that no one or law
making body can say that only
Lancasterians may sell produce in
Lancaster or Leola while other
persons in Pennsylvania may not.
The markets are and must be
open to all in this free country. And
no local smart politicians may
interfere with it.
(CAUSE 1 DONT
Farm Calendar .
w
Saturday, July 26
Sunday, July 27
Paul Holowka
York, PA
NOW
WHO
DID
7WAT?
tainer label as to whether the
material was designed to eliminate
those weeds.
If your entire weed control
program seemed to be ineffective,
re-read the label to see if you
followed instructions. Just a few
simple mistakes during ap
plication can result in complete
failure.
Either too much or too little rain
too soon after application can often
cause a great loss of effectiveness
in many herbicides.
To Beware of Ughtning Danger
Summer temperatures often
bring severe thunder and lightning
storms; and we’ve had some in
certain areas in recent weeks, and
no doubt there will be more to
come. We urge parents to warn
their youngsters of the danger of
seeking shelter under a tree or
swimming in a pond or creek
before and during a storm. Safety
in a truck, car or building should
be encouraged as the storm ap
proaches as well as during the
storm. Stay away from electric
fences and farm equipment that is
out in the open.
Buildings with lightning rods
should be checked to be sure the
rods are grounded in moist soil and
free of debris that would prevent
the cable from taking the charge
into the ground.
To Prepare The Silo
The com crop is developing and
soon it will be silo filling time. The
condition of the silo should receive
Association, Hershey Pocono
Resort, White Haven.
Lebanon Area Fair, Lebanon;
continues through Aug. 2.
Mercer County Pomona Grange
Fair, Mercer; continues
through Aug. 2.
(Turn to Page A3l)
TOO MUCH
COMPASSION?
July 27,1986
Background Scripture: Ezekiel 22.
Devotional Reading: Ezekiel
33:30-33.
Biblical scholars believe that
Ezekiel 22 was probably written
considerably ofttr the fall of
Jerusalem. Ezekiel probably
spoke these words long afterward
to help the Jews in exile to un
derstand why they were forced to
be aliens in a strange land. So the
chapter is a recounting of the evil
m Jerusalem that brought about its
downfall.
There are many such chapters in
the Old Testament, particularly in
the prophetic books. But, have you
ever noticed, that although there
are various kinds of behaviour
vou
DIO
I
some attention before the new com
crop is ensiled. Many of the con
crete silos may be pitted and have
a rough inside surface. This will
allow air pockets and cause moldy
silage. Some inside joints may
need to be repointed in order to
keep out the air and have a smooth
surface.
Don’t wait until the silo filler is
coming before you make these
repairs.
Silage is one of the best and most
economical feeds on our farms
today; let’s not spoil it after it is in
the silo.
To Fertilize Strawberry Plants
Most strawberry growers have
realized very good returns from
their plants in recent years. The
prices are favorable and the
market is there. In order to realize
the maximum yield next spring,
we suggest the plants be well
fertilized this summer.
An application of 20 to 30 pounds
of actual nitrogen per acre over the
plants during July or August
should give strength to new run
ners and increase fruit yields. This
application should be made when
the plants are dry in order to avoid
burning the leaves.
Ammonium nitrate is one of the
good nitrogen fertilizers to use. In
die home strawberry patch use
about a quarter ammonium nitrate
per 100 square feet of bed space.
Good care of the strawberry
plants this summer will bring
about better yields next June.
condemned in these chapters,
there is never a suggestion that
Jerusalem would or did fall
because there had been too much
justice in the land, too much
honesty, or too much compassion.
Never once did God say, “Look
people, righteousness is fine, but
you can carry it too far! ”
GOD’S INDIGNATION
Nor do we ever find God warning
people that they should fix some
limits to compassion and
benevolence lest the recipients
become too dependent upon it and
begin to take it for granted. I’m not
saying that people may not become
too dependent upon it or that they
won’t take it for granted, but
simply that God never said either
of those things through his
prophets. Don’t you find that
curious? Particularly in light of
the fact that lots of us say those
things will all sincerity?
Probably God never mentions
either of these two realities
because he knows none of us are
ever likely to overdue the com
passion bit. There may be some
things which we do to excess, but
God rarely has to worry about us
going overboard in that depart
ment. I really don’t know why we
spend so much time telling each
other not to go “off the deep end”
with compassion, because it is a
risk none of us are likely to run
with or without admonition from
others.
I have never known a church
that endangered itself because it
was too compassionate, too
responsive to the needs of other
people. I have never known of a
church that has spent itself into
bankruptcy because it gave away
too much. (I’ve known of some
churches, however, that failed or
desperately needed help because
they spent too much on them
selves.)
EVERYONE
If you read Ezekiel 22 carefully,
you’ll find that it wasn’t a case of a
“few bad apples in a good barrel.”
Everyone, not just a few, was
corrupt and unresponsive to God:
the princes (22:25), the priests
(26), the prophets (28), and the
people of the land (29). So, we can
understand why God would say,
“And I sought for a man among
them who should build up the wall
and stand in the breach before me
for the land, that I should not
destroy it; but I found none” (30).
It is impossible to be excessively
compassionate.
Based on copyrighted outlines produced by the
Committee on the Uniform Senes and used by
permission Released by Community and
Suburban Press