As reported in Farm Talk. “It’s easier to fool people than to convince them they have been fooled.”
Mark Twain said it decades ago. Tom Leffler repeated the quote in synopsis of his presentation analyzing farm profitability outlooks.
Speaking at a Beef Producers Information Seminar in Emporia, representing Leffler Commodities LLC, Augusta, Leffler expressed optimism with extreme caution.
With detailed PowerPoint slides, Leffler verified strength in commodity futures market prices well above a year ago.
Last Thursday, December Kansas City wheat futures were $7.28, up $2.75, from $4.53, exactly one year earlier.
Other positive comparisons included:
July Kansas City wheat, $7.13, up $2.35 from a year ago, $4.78. December corn, $5.51, up $2.12, from $3.39. March corn, $5.58, up $2.06, from $3.52. November soybeans, $13.20, up $4.15 from $9.05. March soybeans, $13.24, up $4.10 from $9.14.
October live cattle, $128.15, up $18.37 from $109.77. December live cattle, $133.97, up $21.12 from $112.85. October feeders, $165.47, up $19.10 from $146.37. October lean hogs, $80.55, up $25.37 from $55.17.
September dollar index last Thursday was $93.588, up .810, from $92.778, exactly one year ago.
The Dow Jones Industrial Average, known as DOW, is a price-weighted measurement index of 30 companies in U.S. stock exchanges. “DOW on Thursday, at 34894, was up 7154, compared to 27740, on the same date in 2020,” Leffler said. 
As positive as all that appears, Leffler expressed caution based on experiences. He reminded that after a fire at the Tyson Meat Plant in Holcomb, Kansas, August 9, 2019, there was a sharp drop in the DOW. “The economy can change very rapidly,” he warned.
“Tom’s Rants” were posted as Leffler’s concerns for the country and agriculture profitability. Included, not in a specific order, were Fake Meat, Proof of Vaccination, Afghanistan, News Media, Cyber Security Hackers, CDC (Centers For Disease Control) Eviction Ban, Chip Shortage, Inmates Called Residents.
As if that list wasn’t long, Leffler added seven more “rants” which have an economic impact.
“The government’s free money is making people lazy and dependent,” Leffler emphasized. “Service is deteriorating as the United State Postal Service is slowing down first class mail delivery several days.”
Coronavirus issues are again increasing with the “Delta variant fear,” and requirements for Moderna booster shots, proof of vaccinations and mask mandates. Major companies, Microsoft and Amazon, are delaying return of office workers.
Policies are inconsistent as Twitter bans Donald Trump use of service, but now allows Taliban usage.
“China is a threat to the United States and the world,” Leffler declared. “This country is not adhering to its fiscal responsibility.”
Many people are not aware of the California Proposition 12 now in effect with possible implications nationwide, Leffler said.
“It establishes minimum requirements on farmers to provide more space for egg-laying hens, breeding pigs, and calves produced for veal,” Leffler explained. “California businesses are banned from selling products from animals housed in ways that do not meet these requirements.”
Environmental issues sometimes overlooked were noted. “There is serious drought in the western half of the United States,” Leffler reminded. “For the first time ever, Colorado River water is being rationed.”
Lake Mead is at 35 percent water capacity, while Lake Powell is 32 percent capacity. The South America Parana River is at a 77-year low.
“Gasoline prices are up one dollar from a year ago, and at a seven-year high,” Leffler said. “The United States is importing unleaded gas while the Biden administration is asking OPEC to increase production.”
In clarification, the Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization of 13 countries. They account for 44 percent of global oil production and 81.5 percent of the world proven oil reserves.
“OPEC has a major influence on global oil prices,” Leffler said. “OPEC is often cited as a cartel that cooperates to reduce market competition.”
There are 10 million open jobs in the United States. “This is in part, most likely largely due, to the government paying people not to work,” Leffler said. “Your tax dollars are paying others to do nothing except hold their hands out. Government inflation is here due to the government stimulus.”
The speaker reminded those in attendance the U.S national debt is $28.662 trillion and the U.S. total debt is $85.69 trillion.
“What is a trillion?” Leffler asked. “How many zeroes are there in a trillion?”
One former banker in the audience correctly responded “12,” while few if any others could answer the question.
To better put a “trillion” in perspective, Leffler gave nine illustrations. “One million ants weigh just over six pounds. One billion ants weigh just over three tons (6,000 pounds). One trillion ants weigh over 3,000 tons, more than six million pounds,” Leffler explained.
There are one million seconds in 11½ days, one billion seconds in 32 years, one trillion seconds in 31,710 years.
“Spending $40 a second around the clock equates to spending $3.456 million per day,” Leffler tallied. “To spend $1 billion takes 289 days, while to spend $1 trillion takes 792 1/2 years.”
Added to these issues, Leffler pointed out misleading media headlines. “Beef cattle are responsible for only 2 percent of greenhouse emission, according to the Environmental Protection Agency (EPA),” the speaker said. “By contrast, transportation is responsible for about 30 percent.”
Quoting an advertisement sponsored by Beef Checkoff, Leffler said, “From 1961 through 2018, the U.S. beef industry reduced emission per pound of beef by more than 40 percent.
“Cattle play an important role in protecting and enhancing our ecosystems. This helps increase carbon storage, improves soil health, mitigates wildfires and provides habitat for wildlife,” Leffler continued.
“We all play a role in a more sustainable future, but eliminating beef is not the answer,” the speaker declared.
Showing detailed market charts, Leffler again recognized optimism for commodity prices while acknowledging need for awareness of possible negative impacts.
“The most dangerous phrase in the language is ‘we’ve always done it this way.’ That is the poorest excuse ever and can lead to farm and ranch losses,” Leffler said. “Coffee shop and free marketing advice are just that. Farmers and ranchers need to protect their investments against losses while locking in a profit when possible.
“This is possible through the use of futures trading although it does involve the risk of loss and is not suitable for everyone,” Leffler concluded.
