Obama Calls for Action on Health Care
According to Census Bureau estimates released Thursday, the number of people living in the United States without healthcare coverage between 2007 and 2008 rose to 46.3 million. Experts claim the number of "underinsured" also is on the rise.
The government data includes 36.8 million people identified as "U.S. citizens" and 9.5 million classified as "noncitizens" by the Census Bureau.
Meanwhile, the number of Americans covered by federal health programs like Medicare, Medicaid, and the Veterans Administration also increased, corresponding to a decline in those with private coverage.
While economists and statisticians are at odds as to how many people have lost their health coverage since the economic recession really kicked in last summer, the president told Congress this week, it's time for action on health care reform.
The President has been urging Congress to reform the health care system in America since he took office nearly nine months ago. Members of the U.S. House passed their version of the controversial measure in July, but Senators were unable to come to any agreement before the political body's summer recess.
President Barrack Obama: (page 8)"I will not waste time with those who have made the calculation that it's better politics to kill this plan than to improve it. (Applause.) I won't stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what's in this plan, we will call you out. (Applause.) And I will not -- and I will not accept the status quo as a solution. Not this time. Not now."
After the speech, a few Republicans reacted by stating they were ready to work with Democrats to find a solution while others from the right-side of the aisle urged everyone to slow down and start-over. But hard-line opposition groups continued to bash the plan saying it was "on life-support" and not what the American people wanted.
Democratic Congressional members add that without adequate insurance, private citizens are left to foot-the-bill for medical care while businesses struggle to absorb health care costs and remain competitive.
Some of the controversy centers on how to pay for any kind of reform. House members say their version of the bill would spend no more on medical care in the next ten years than already projected by federal government accountants. Congressional Budget Office officials disagree, saying the medical measure would add $220 billion to the U.S. deficit over the same time period.
One of the major sticking points remains the President's position on a so-called "public option" allowing any citizen to be insured under a government-run plan. The majority of Republican Senators are standing fast against this and several other issues but Mr. Obama has begun offering incentives to get negotiations moving. These include having the public option controlled by a not-for-profit agency, placing limits on medical malpractice lawsuits, and offering a cooperative-based plan similar to one proposed by Senator Kent Conrad, a Democrat from North Dakota, and championed by fellow farm state-legislator Senator Charles Grassley, a Republican from Iowa.
How rural American's are insured may well depend on the cooperative option. Next week, Market to Market will take an in-depth look at how cooperative health care is already operating and holding costs down in farm country.
Peace Through Corn
Memorials in New York, Washington, and in Pennsylvania all took place under stormy skies.
In the years since the attacks, of course, America has waged a war on terror against a largely invisible enemy. But 50 years ago, that was definitely NOT the case.
Shortly after the world entered the "Nuclear Age," economic competition, political conflict, and escalating military tension took the United States and the Soviet Union to the brink of Armageddon.
But an unlikely diplomat used agriculture to achieve dialog with the head of the Soviet Empire. And as Andrew Batt explains, the Iowa farmer went "toe-to-toe" with Premier Nikita Khrushchev hoping to find "peace through corn."
In the heart of the Cold War…Americans lived in fear of nuclear annihilation. They were alarmed by a mounting Soviet threat and an uncertain regime lead by Premier Nikita Khrushchev – the successor to brutal World War II-era dictator Joseph Stalin. But American apprehension was not universal.
In the center of the U.S. Corn Belt, a leading businessman was laying the foundation for not only an American success story but an international breakthrough. In the sleepy farm community of Coon Rapids, Iowa, corn farmer Roswell Garst built an agricultural powerhouse in the 1950’s.
Roswell Garst: “Hybrid seed is the future of corn. If used we will all have many happy harvests.”
Garst embraced technology early on in his quest for more efficient production practices and higher yields. The hard-nosed Iowa grain farmer set himself apart from his colleagues and earned a worldwide reputation.
Victor Lishchenko: “He was a good-willed man. Roswell was a ‘character’ as you say in English. He did not like lazy people. He did not like stupid people.”
Garst’s pursuit of international capitalism brought him to the doorstep of the world’s most powerful communist nation – the Soviet Union. Years of correspondence formed an unlikely friendship between the American farmer and Soviet Premier Khrushchev. Their common bond was corn.
Khrushchev’s fascination with U.S. agriculture and an open invitation from a Des Moines Register newspaper editorial inspired the gregarious Soviet leader to personally visit America and its “tall-corn state” in 1959.
President Dwight D. Eisenhower: “"The political and social systems of our two systems differ greatly. In our system, the people themselves establish and control the government. You will find that they, like your people, want to live in peace with justice."
WHO’s Jack Shelley: "Nobody among the American public would be wise to expect sensational developments out of the conference between Eisenhower and Khrushchev at Camp David. Now that big plane is coming in you can see it beautifully turning around. The Premier of Soviet Russia slowly descending the steps...gesturing as he so often does."
Gov. Herschel Loveless, D-Iowa: "Were known you know as the state of tall corn but we have a lot of tall industries too growing up in the Midwest plains."
WHO: "Here we are once more downtown in the vicinity of the route that will be traveled by the Russian Premier. As you can see there are very large crowds on hand around the Fort Des Moines there. But you can also see that there are some protest signs. There is one that reads: 'The only good communist is a DEAD ONE.'
Sergei Khrushchev: "If you will look at the Soviets you will also find enough people who will say Khrushchev must not go to America. Americans are awful. The best American is a dead American."
Sergei Khrushchev, son of the late Soviet premier, joined his father on the historic 1959 delegation. Sergei remembers the elder Khrushchev’s repeated attempts to demonstrate Soviet strength before and after his American visit.
Sergei Khrushchev: "He tried to threaten America to death that we are strong. Saying 'we are producing missiles like sausages' when we had two missiles and I ask him how can you say this? And he said 'I don't care how many missiles we have because we have to show America we are strong.'”
But Khrushchev’s chest-thumping diplomacy rung hollow in the field of agricultural technology. The Soviet Premier knew his comrades were far behind their American farming counterparts. The Russian entourage paid visits to a nearby packing plant and the experimental farms at Iowa State University, where antibiotics were cutting-edge swine technology.
ISU News Reel: “While at the experimental farm, Khrushchev remarked ‘If Soviet and American pigs can get along then why can’t nations live together.”
With great fanfare, the Soviet delegation made the 80 mile trek from Des Moines to Coon Rapids, Iowa and the farm of Roswell Garst.
Under the watchful eyes and cameras of hundreds of journalists, Garst gave Khrushchev a no-nonsense tour of American farming practices.
Tom Vilsack: “"That one-day event, I think, had a profound impact on Premier Khrushchev in terms of his capacity to understand the enormous productivity of American agriculture and he compared that to what Soviet farmers were doing and he realized that they were substantially behind us."
Ambassador Ken Quinn, World Food Prize: “"He was a man that told it like it was and apparently Khrushchev liked that."
Nikita Khrushchev: “You have some great land here. God has clearly helped you.”
Roswell Garst: “That’s right. Well God is on our side.”
Nikita Khrushchev: “No. I think you are wrong.”
Roswell Garst: “Tell him we have a saying in America: God helps those that help themselves.”
Sergei Khrushchev: “My father asked how many people you have working on the farm. He asks how many sons you have? Garst told him four and they are as strong as I am.' My father looked at him and told him 'On our collective farms we need at least 60 people to farm this.’”
The plain-speaking farmer and the Russian leader made worldwide headlines tromping through the Iowa countryside, pushing aside droves of reporters in their path. At one point, Garst famously threw sileage at a photographer.
Liz Garst, Granddaughter of Roswell Garst: “My Grandfather didn’t care for the press. He wanted to show Khrushchev how to grow corn and feed it to cattle. Khrushchev liked the press and wanted to show his people that they needed to embrace Western technology.”
Liz Garst, granddaughter of Roswell, was a young girl on that fateful September day in 1959. Fifty years later, Liz and members of the Garst family invited a Russian delegation back to Coon Rapids in a celebration of citizen diplomacy.
Sergei Khrushchev, now an American citizen and Brown University professor, was part of the Russian entourage that included a full agricultural delegation.
Whiterock Managing Director: “Welcome to Whiterock Conservancy. For some of you this is not your first visit."
The Garst farmhouse, now a bed and breakfast on the sprawling Whiterock Conservancy, was the site for remembrance and reflection amongst a new generation of Americans and Russians.
Fifty years in agricultural progress was clearly evident as the Russian leaders toured an Iowa ethanol plant…stood in awe of 30-plus row planters…
…and feasted on, what else, but Iowa sweet corn.
The technological and economic gap between American and Russian agriculture is still present in 2009. But back at the Garst farm, the picture of a long-thawed Cold War appears prominently as the visit’s defining image.
After Nikita Khrushchev’s visit 50 years ago, the Soviet leader overextended his country on corn planting – an experiment that ultimately failed and contributed to his ouster in the mid-1960’s. Garst’s diplomatic legacy would later be carried on by his nephew, John Crystal, and Russian Agricultural leader Victor Lishchenko. The Garst Seed brand, long-championed in the heart of the Corn Belt, was ultimately purchased by the Syngenta Corporation. And the town of Coon Rapids still claims Roswell Garst as its most famous citizen.
Sergei Khrushchev: "I thought that he was a great person. He was the first person to drill a hole in the Iron Curtain from the American side."
Liz Garst: "It was an agricultural story above all else. How cool that the first interaction between mortal enemies was coming together on how to eat. What a great story."
Victor Lischenko: "They thought about corn as the most promising kind of grain and this is so. Now world produces roughly 2 billion tons of grain. One-third of this is corn. This means they knew what they had been doing. They had been right in their prognosis."
While the passage of time has dimmed the memory of Garst and Khrushchev’s historic visit, the lessons of agricultural diplomacy and what Garst called "Peace through Corn" are readily apparent half a century later.
Tom Vilsack: "5 percent of American farmers produce more than 70 percent of the food and fiber in this country. That’s an impressive figure but without technology this wouldn’t be possible today which I think is another important lesson we've carried over the last 50 years."
Market Analysis: Jamey Kohake, market analyst
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For the week, September wheat declined about 2 cents while the nearby corn contract moved nearly 15 cents higher.
USDA projections of record soybean production pressured the deferred contract, but old crop prices recouped some of last week's losses. For the week, September soybeans gained more than 13 cents and the nearby meal contract was up nearly $6 per ton.
In the softs, cotton broke through the $60 barrier with the December contract posting a gain of nearly $3.75.
In the dairy market, Class III Milk futures continued their upward trend with a gain of 14 cents.
In livestock, October cattle gained 57 cents. Nearby feeders were up 77 cents. And the October lean hog contract gained almost $2.
In other markets of interest, the Euro gained nearly 300 basis points against the dollar. Crude oil traded above $70 before settling Friday with a weekly gain of $1.50 per barrel. Comex Gold closed above $1000 per ounce. And the Goldman Sachs Commodity Index gained nearly 10 points to close at 445.65.
Kohake: I think we stabilize in here, get a new top formation in the market sometime early next week depending on what the U.S. dollar does. If the dollar keeps trending lower gold is going to be very, very supportive. What happened in the gold market this week was a big miner, overseas foreign miner was hedged very, very aggressively, got caught short, lost over $5 billion on his hedge. That was the first flush out we had on Wednesday above $1000 and then we saw some technical triggers come in today and push it back up there again.
Pearson: Oil is up $1.50, $70, are we headed higher in oil?
Kohake: I don't think so, I think the top side is defined right now, $67 to $74 looks like the range. This market also it depends on the dollar. If we would turn down lower there you might be able to run to $77 but OPEC said this week they are going to keep their production the same right now, no new cuts so I think we're still range bound.
Pearson: Let's talk about the crop reports, let's talk about the wheat market first and obviously big numbers on everything. Let's start with wheat, what are your thoughts there you Kansas boy?
Kohake: The wheat market has been severely depressed. We have lost about $1.30 straight down in the December contract in the last month, month and a half. The problem with wheat is still exports. Russia is exporting more wheat than we are and Russia has overtaken the U.S. pretty much as the largest world exporter right now. We are still roughly 47% behind last year's export pace right now so the market is trying to find some type of price discovery level to be able to compete with that.
Pearson: Have they found it? This has been a tremendous pullback.
Kohake: I don't think so. I think we will see some more short covering starting out next week but I think there is 20 to 30 cents more down side below this week's lows for December wheat.
Pearson: There has been some quality issues and some other issues on that Russian product too. Eventually will that come back to the U.S.?
Kohake: I think it will eventually, especially if the dollar keeps turning lower, that will help out as well but South America has had some very good rains, they're going to have good crops there so that's going to be another key factor to overcome.
Pearson: What about Australia, they getting some rain there finally?
Kohake: Yes, they are, looking better than they were. The crop is not made yet but they are looking better and the best thing for wheat like we're assuming is to have a drought scenario somewhere overseas to help our crop out.
Pearson: What are you telling producers of wheat?
Kohake: Hold shorts, we're not adding new shorts, the market is oversold right now but I think we will see a correction especially if the dollar keeps going lower.
Pearson: Let's talk about the corn market, a huge number, 13 billion bushels, almost 162 bushel national average and, of course, they're saying that may be true but not in my neighborhood. Bottom line the USDA's numbers are right so they are what we're going to be dealing with so take us out, new crop 2010 maybe should we start looking out there to perhaps make some sales? They talked about increased demand in this report too, it stunned a lot of people based on what is happening in the livestock world. what is your take on this corn number and that report?
Kohake: I would be selling rallies in December corn, look at the energy prices especially natural gas how suppressed that market has been, you can sell December corn and lock in a profit of at least ten contract, I would start doing that on rallies. The wild card today was the demand side of the ledger and that is why we put in a nice little rally of three to five cents at times today. But not a lot of people put a lot of faith in that with your livestock numbers being cut back, our exports keeping the same pace they are right now and this week they were huge up over a million metric tons again. China is also bullish and they were having a drought in parts of their corn growing areas so the assumption is they have a smaller corn crop and they're going to start importing more corn. This is all wild assumptions right now. I think the market is getting ahead of itself, I want to sell rallies. If we don't get a frost scare here in the next two weeks and right now the 11-14 day forecast is dry and no frost, I think corn could eventually pass $2.75. If we do get a frost scare maybe $3.50 but I would be a seller back up in those areas again. I think the crop will get larger and the October report will be more bearish than this one.
Pearson: And you're talking December of 2010 sales, right?
Kohake: Right, first number sell rally is December '10 and December '09 we could turn a $2.75 and we get a frost rally to $3.50 selling December '09 there.
Pearson: But you're making sales for next year, so you think this thing could be under some pressure all year?
Kohake: I do, we're going to have a very comfortable carryout and I think these numbers are a little bit to bullish right now based on the world economy that we're not going to be able to stay on this expected rapid pace that the USDA is forecasting.
Pearson: Big number in soybeans as well released this morning and maybe less of a surprise to some folks but as you look at the soybean market it just seems like demand just keeps coming at it. If you look at the difference between corn and soybean prices you've got kind of a disconnect going right now.
Kohake: Right, if you take the historical average, take the price of December '09 corn times two and a half that's still a buck and a half overpriced relative to beans right now. Back to the demand side of the market that is what has been keeping the support underneath it. China has roughly already forward contracted 41% of next year's expected exports and that is a huge number. I think they're going to be back to their old games like they have always done, our prices are going to move lower, harvest pressure, a large crop and especially with no freeze you're going to see China coming in and cancelling out, try to buy them cheaper and here we go again. I'm in the mode here of selling rallies. I think eventually no frost scare, the crop stays like it is and keeps growing for October's report you can turn down below $8 eventually. If we do get a frost scare maybe run this thing to $11 on the up side.
Pearson: As far as soybean production in South America you're looking at big acreage down there so you want to sell some 2010 beans?
Kohake: I do, I want to sell as close to $10 as you can, sell sharp rallies there, you can lock in some profits there and take advantage of that.
Pearson: Let's talk about the cotton market, it was on the up swing this week.
Kohake: We saw a nice rally, a lot of support from the dollar fading on lower, exports are the lagging factor there. I would sell rallies in December cotton up to $62.50. I think we're going to get some spillover, the dollar will keep us supported, but I don't think we hold in here right now based off of exports.
Pearson: Let's talk livestock for a minute, again, it's been a struggle. Let's talk about the fed cattle market. What do you see happening between now and the end of the year?
Kohake: End of the year I think we will see one more sharp rally on a short-term bullish in here right now. Futures are higher priced than cash so the cash is going to be the wild card. We traded 85 this week, I think futures are range bound between that and 89 right now. The demand side of the market is still the key. Supplies are bullish through the Christmas timeframe but we need to pick up demand. Pork is still cheaper than beef and that is the problem.
Pearson: Plenty of pork out there, we'll get to that in just a moment. So, as you look on first quarter of next year I see this kind of building a little bit more demand going forward, a little bit better economic news, maybe see some strength in this cattle market in 2010?
Kohake: I think we will. If I was a hedger and cash hits 88 to 89 I would sell into it. You look at last month's cattle on feed report the placement number is bearish starting the first quarter of next year and you take a break even of your input costs in cattle you can lock in some green right now up to $10 a head and I would be taking advantage of that this fall if I was a cattle guy.
Pearson: Green is a big word for us on the cattle side. Let's talk about the hog side. We're hearing a lot of things out there, there's a lot of rumors floating around about some of the larger operators out there. We have seen a little bit of an up tick, am I right, on sow slaughter?
Kohake: That is right. It is still a blood bath though for the big producers like you were talking about, still a lot of red ink. The only thing that has changed is from roughly February through next July you can lock in a profit not just like the cattle, the numbers are getting better with the cheaper corn. Supplies are still outrunning demand right now in hogs, I don't think that's going to change anywhere near in the short-term. Weights are up over eight pounds compared to last year. I would sell rallies anywhere near $52, in December I would re-put your hedges right back on again.
Pearson: A little bit of a turnaround for the livestock sector and also talk about the dairy sector and what you see happening there.
Kohake: The dairy sector looks like it has stabilized. We're not putting in new lows every day. I think it looks very, very well in here to form a bottom and start to see some short covering. I think we will see a sharper rally eventually but we need to get some support from the cattle, from the hogs and kind of see one big push with the dairy and beef and pork. But I like the stabilization that we have made in the dairy market.
Pearson: Tell me about covering feed needs at this stage of the game. Obviously a big harvest is coming in. Are we going to see a traditional harvest low say if we get started around October 1st for the bulk of the Corn Belt?
Kohake: I think we will. I would be buying sharp breaks in the meal, in the corn market right now. Another idea is to sell puts, if you're looking to buy some $2.80 December corn, make the market come to you and then turn around and get long what you need to get long with the futures.
Pearson: Meal side what do you have there?
Kohake: Same thing, keep some type of calls or short puts on right now just in case for a freeze scare, I think you have to have something wrong but I like the same strategy there, sell puts underneath the market, the market comes down great, we need to buy it and buy the futures then.
Pearson: All right, so start being a little bit more aggressive on the input side. You talked about that range on oil and there's a lot of producers out there that are burning a lot of diesel, get it covered there?
Kohake: On a pull back, we pull back down to 67, 68 I would but I don't think anything near or short term we're going to be running to 80 right now.
Pearson: Jamey Kohake, as usual we appreciate your insights. That's all the time that we have for this portion of Market to Market. If you'd like more information from Jamey on where these markets just may be headed visit the Market Plus page at our Web site where you'll find streaming video of our program and, of course, you can download audio podcasts of our Market Analysis and Market Plus segments absolutely free at our Web site. Be sure to join us again next week when we'll examine a cooperative effort to provide health insurance to rural Americans. Until then, thanks for watching. I'm Mark Pearson. Have a great week.
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