Eggs are more important than you think
Illinois, like many other places, is about to find itself under a “Shelter in Place” order. Currently it runs through April 7th. Other states and municipalities have different dates. The list of exceptions is a bit fuzzy. I was at the local auto supply store today and they were going to try and remain open. This isn’t greed. It’s a small town. They don’t do a booming business. It’s that unattended reality creeping in. Because there aren’t a lot of jobs in the town a sizable number of people are healthcare workers working in area hospitals, nursing homes, etc. If a nurse needs a new battery in their vehicle to get to the hospital, being able to buy a new car battery is now an essential part of keeping the healthcare system going. It’s a less solid case when you are talking about carryout food workers. Yes, people need to eat, but there are lots of those places. If you are in a city you have far more carryout food places than you have hospitals. When you are rural, you don’t have the hospital.
For these two weeks things will mostly be okay. Yes, it sucks not being able to earn a living and yes, the mythical $1200 from the government won’t pay for shit considering many health insurance policies cost more than that. A pandemic is not really a time when you want to let your health insurance lapse. Medicare for all is not looking so stupid right now. One news report had this “bail out bill” including loans for travel and hospitality companies and the mythical $1200 from the feds tipping the scales at $1 Trillion. Congress can spend a trillion it doesn’t have inside of a week, but Medicare for all is too expensive?
One thing I haven’t heard much about is Ag workers. In particular people with jobs at livestock farms. The livestock still has to be fed and watered. Manure has to be dealt with. Those in a situation requiring bedding need to have the bedding changed. You can’t just let the animals starve to death or die of thirst, besides being a massive financial loss it is inhumane.
I for one vote that the people making toilet paper and facial tissue are essential. They say one part of the Coronavirus is the screaming shits, besides the other flu like symptoms. Well, ultimately those places need some form of wood or paper to turn into pulp which becomes the stuff we use to blow our nose and wipe our butts with. The people who keep that supply chain running now need to be considered essential. Odds are many places making this type of product either are or can make the masks and gowns healthcare workers need so, yeah, this supply chain needs to function.
While it is true that a new battery or a new tire is essential so healthcare workers and other essentials can get to and fro, it’s not true that those supply lines need to keep running. There is usually several months of inventory in the supply line.
Any “Shelter in Place” order will need a broad expansion past April 7th.
Here’s the reality. Those nurses, doctors, and other “essential” workers are driving to work every day. A growing number of their vehicles will hit their 5,000 to 7,000 mile oil change time. You either now make the Jiffy Lube oil change place “essential” or you order car rental places (if there are any in the area) to give at least the healthcare workers free loaner cars for a month. I’m hearing a number of car dealers advertising “service” which now picks up your car and returns it. That’s fine if it is your day off. I’m guessing healthcare workers aren’t getting many days off right now.
What people living in cities don’t realize is the long term damage to their food supply that will happen if “Shelter in Place” after April 7th isn’t greatly expanded. Right now is when farmers are getting equipment ready for the field. It is when they are accepting seed and chemical shipments. It is almost as busy a time as planting season itself. Last year farmers struggled through late wet planting and late wet harvest with a large number of acres where planting never happened. During 2019 carry over estimates were still in the billions of bushels. According to this article December 1, 2019 corn was around 1,892 million bushels. That sounds like a lot but it is not.
Every laying hen consumes about 10 pounds of feed per month. In 2018 there were 391 million laying hens in the U.S. There are 56 pounds in a bushel. (391,000,000 * 10) / 56 = 69,821,428.5714. If you want them to be fed for 12 months the number is 837,857,142.857. We haven’t even talked about the chickens being raised to be your supper; cattle to be your steaks and burgers; hogs to become your bacon and ham; farm raised fish; etc. All we have talked about is the hens that lay your eggs being fed for a month and they need roughly 70 million bushel. We also haven’t talked about peanut butter, catsup, or the thousand of other food products corn is used in, not the least of which is cooking oil.
Planting season typically starts before April 15th in much of the Midwest. To those who say “oh, they can just plant later” I say, “with consequences.” Even if the “Shelter in Place” order ends on the 7th and all things return to normal on the 8th, the places that bag the seed and make the chemical haven’t been operating during this time. It will be weeks before the farmers get what they need to plant and get the maintenance parts they need to get equipment ready.
Many varieties of corn are 108-120 day. That means they need a minimum of 108-120 days of good growing weather after sprouting to achieve maturity. The insurance cut-off date for corn is some time in early June. Some estimates are for farmers to plant 95 million acres of corn in 2020. That’s not a one week job people. Some mega operations with massive equipment and lots of hired hands can plant several hundred acres per day using multiple planters. Small family operations get anywhere from 40-90 planted per day. No matter which operation that is, the day is one where the field is dry enough and the soil warm enough to plant.
The Carryover Number is Important
Most of you living in cities never once thought about grain carry over. You just wanted cheap food and lots of it. Traders and commercial consumers of the grain need to know to plan purchases. Ultimately it sets the price. When “the trade” wants more acres devoted to one grain than another they “bid up” futures contracts raising the price as an incentive for farmers who can switch to other crops to do so.
The carryover number is important to governments because that is how you avoid famine. During times of global strife, be it a physical war or a trade war, a large carryover is required. If you don’t have it and can’t go to external markets for it, people starve. When enough people starve governments are overthrown. Read up on Bastille Day in France. “Let them eat cake” didn’t work out so well. Bakers wanted to make more money and people just wanted bread.
I grew up and still live on a family farm. While I am an IT consultant by trade, I still help out whenever I’m home. It has been a long time since I delved deeply into the dance of prices and carryover. The rule of thumb is that we tend to have enough carryover to reach the end of August with a “good” crop. That rule of thumb depends on how much we export and how much we consume. Harvest tends to start in September, weather permitting. “New corn” is coming into the market as “old corn” (last year’s crop) is being used up.
When carryover is low governments have to take drastic action. The first of which is blocking all exports. Not only does this hurt profits and taxes, it runs the risk of causing a famine in another country, turning an ally into an enemy.
Shelter in Place May Become an Annual Thing
A number of people in the medical field are suggesting Coronavirus shares with the flu is that it could become an annual thing like cold and flu season. This means we could be looking at “Shelter in Place” every March until a viable vaccine, much more viable than that near worthless flu vaccine, is created and tested. Hopefully you visit that link and look at the CDC studies showing that on a good year the vaccine appears to be just over 50% effective. Just in case you are too lazy to click.
CDC stats
Gotta love 2014-2015, eh?
A big problem with the flu vaccine is people have to “guess” which strain of the virus will be dominant during the coming season. And now we’ve come full circle. The flu vaccine is gown in eggs.
