gets another look from seed companies creeping protectionism in the u-s could mean gains for global competitors and the e-p-a gets ready to rule on raising the allowable ethanol blend rate . >> u.s. farm report brought to you by chevy, an american revolution. >> good morning and welcome to u.s. farm report. i'm john. one thing virtually all economists agree on is how harmful the tariffs were to prevent foreign goods to the u.s., economists agree that we deepened and prolonged the great depression. flash forward to today. while we know the right answer when your industry is threatened by foreign competition, protection looks like protection. even agriculture producers are

looking for solutions to their economic problems. those that do know history may be condemn today repeat it. let's get started with all the news. >> good morning, everyone. five years after pulling his plans on biotech week, he said this week they are jumping back into the business. this after the ag business purchased the company that specializes in wheat germ plasm. the existing breeding capabilities will the center piece of the wheat platform. it is known for the corn, soy beans and cotton. they were working on the roundup ready wheal when they stopped development in spring of 2004. they said it was due to the lack of a consensus in the industry. meanwhile u.s. wheat associates says if congress does not act

quickly on a trade agreement with columbia, american wheat sales could suffer. canada is close to passage of an fta with that south american country. approval would eliminate tariffs on anamedian wheat. if that happens, the united states wheat sales could be cut in half. you have until monday to let the federal government what you think. in march the ethanol industry submitted a waiver to the environmental protection agency to increase the amount of ethanol in the gasoline supply. livestock producers are worried that e15 would mean even more corn would go into ethanol, raising their feed cost. this epa ruling won be confused with renewable fuels standard ruling which saw the comment period extended to september. >> in today's crop watch, we

received a photo from the texas ag life extension office. it's an eye opener about the lingering drought in that area. >> a grower in missouri says that he finished up planting corn, not soy beans but corn on june 27th. the o'er will need summer to last until november to get a crop. >> here is a topper. he just finished harvesting last year's corn this week. the grower estimates a third to half of the fields in that area went unseeded. >> seems as though someplace people have a problem. >> right. on the whole i think the crop is good. i do think that overall, we're not as advanced as we have been. i mean, the crop maturity. and it's going to take plenty of hot weather. the guy was right when he talked about a summer lasting

until november. i would vote for that. up next we head to pro farmers conference in des moines for the round table. the conversation begins in just two minutes. brought to you by the genuineity brand.

head to the heart of farm country >> welcome back. we head to the heart of farm country for the round table. chip flore takes it from here. >> we're at the pro farmer leading edge conference in des moines, iowa. we have the president of the economics, with form economics and pro farmer washington consultant. the senior analyst at pro farmer. vince, i know that this is not an easy job. but take about a minute, sum up current economic conditions and where we might be going ahead. >> well, let me say the first -- the first presentation i

ever made to pro farmer was in des moines, iowa in january of 1980. and i told you to sell all your land, get out of farming, you're in for hell. in the last year, i would say the global economy was faced with a reentry into hell. we avoided the abiss and now the best characterization is something that i said earlier, we're likely to stay there for the next two or three years. >> next two or three years. what kind of impact will it have on the markets. >> the livestock sector has been impacted the greatest here. domestically right now because of the demand side of things. when you look at the green markets, if we're in it for two to three years, it will have downward pressure on the markets and limit where we can go from an upward price movement. >> jim, there's been lots of action out of washington already. we had the stimulus package and

other packages out there. what can -- well, what have they done, what can they do to try to help this economy. >> you've only had 10% of the $800 billion package actually funded. watch your poll numbers for president obama. if his personal numbers go down, he and his top lieutenants, there's already 21 czars in the white house, them accelerate the outgo of those funds. as far as another stimulus package, i don't see it likely at this time, unless we go back into hell. because of the republicans that didn't vote for it the first time, they're on the borderline of politics of failure as a group. and you have a growing number of moderate democrats called blue dogs who are more than worried about the budget deficit. so, again, i agree with vince earlier when he said it's going to be up to the fed. >> okay. so you don't see another stimulus package coming yet. what do -- what does the fed

need to do? >> i don't see another stimulus package. on a note of optimism, i would hope that we redirect the existing stimulus package to efforts to more quickly stimulate economic activity. and the way that i think we can do that is by introducing serious insensitives into a stimulus program. in that respect, i would like to see more in the way of tax cuts, much more in the way of tax cuts. and the elimination of this silly he talk about raising taxes and introducing class warfare into the economy. >> all right. brian, what kind of impact has this had had on the dollar, the u.s. dollar. >> we saw the sharp downturn of the dollar last month. since then we have recovered significantly at first and then backed off that level. not because things are great here at home, but because they perceive to be better here than they are abroad. that gives us levity in the

dollar. based on the stuff that, you know, we've seen now and are hearing, we're probably going to face more dollar pressures as we move forward which is a positive thing when you look at exports. >> it's done a wonderful thing for exports and corn exports, right. >> yes. we will see some of that support on the export side of things from the weaker dollar. >> which way is the dollar going next, vince? >> it's going to fluctuate, that's for sure. on the one hand, i would say that the dollar is probably the best amongst a lot of bad currencies. at the same time, i wouldn't be surprised to see some efforts toward a competitive deevaluation where countries try to shrink the value of the currencies, including the united states. >> okay. we've spent a lot of time putting money into this system already. where has it gone, guys? where has the money that has gone into the system, where is it. >> it has vaporized. the money has vaporized.

various segments of the system have collapsed. they didn't die a slow death, they died a fast death. the fact is that they are dead. as a result of that, the turnover of money is in a long- term structural decline which simply means that the federal reserve is going to have to continue to pump more and more money into the economy in order to effect stabilization. >> all right. and that's what we're going to talk about when we come back with more u.s. farm report in just a moment.

>> we're back at the pro farmer leading edge conference in iowa. we were talking about money flow, where all the money has gone. vince, you said it vaporized out there. bankers obviously play a critical role in the economy and right now they're just not

very active. what do we need to do to get the bankers more involved in stimulating the economy? >> i think the banks are in fact sitting on a lot of reserves. i think one of the things that would be a positive in restoring confidence is get the government off the backs of the banks and suggest less regulation rather than more regulation. that's number one. number two, there are two sides to extending loans, supply and demand there. is no demand for credit right now. and that's why i think we need to have a real jolt to the demand side of the economy. once conditions start to improve, they will start to regenerate on their own. but the key is to provide the impetus to get that going. so far we don't have it. >> okay. so the other thick that we should -- the other thing we should talk about, jim talked about that he would like to see

a elimination or suspension of the payroll tax for a time. in the current economic environment accident are they going to make any changes in the tax environment. >> once you open up the tax code to any degree, in a democrat led white house and congress, it's hard to control. i think -- although i agree with vince, i think it's unlikely. it's too business oriented for the powers that be. >> okay. in the environment that we've got, the economy that we've got, we've seen consolidation in the auto industry and other major industries out there. we're starting to see consolidation in the fertilizer industry. brian, if we see the number of players in the fertilizer industry shrink, what kind of an impact is that going to have on the farm community. >> when you shrink it up, the big get bigger, so to speak, you're likely to have bigger price fluctuations, more likely to see a little bit of a higher

base price i would say over the course of time. it depends how much you shrink it up and how many players are involved. the fewer the higher the prices would be. >> this fertilizer market has come down some. >> tremendously. prices are anywhere from a half to a third what they were a year ago at this time. >> right. >> i want to add on that. >> yes. >> once the economy does turn, around, you're going to have an aggressive obama led justice department look back at prior mergers and try to demerge. that will include, in my judgment, c companies, railroad companies and fertilizer companies. >> really? >> yes. >> okay. now, this pressure that we have seen on the fertilizer market, that's kind another symptom of deflation out there, vince. and you see this as a chronic deflation for a while, right. >> yeah.

that's the har bass binger of things to come. i think that's likely to be the norm for the next several years. and so i expect to see a general deflation in everything. input costs, output prices, et cetera, as we move forward here. >> okay. what about these guys that are saying that with all the money in the system right now, once we get the blossom behind it, we're going to see run away inflation. >> my bias would be gee, i wish that were the case. that would be great. but the fact is that there is no inflationary pressure out there. if you have a permanent structural shift in the turnover of money, then you need a lot of money out there to offset, just to stabilize the condition that's we're at now. the levels we're at know are undesirable. >> okay. guys, anybody tackle this one. what kind of an impact do we see countries like russia and

china? are they going to be able to get us out of our economic malaise? >> go ahead. >> russia is a developing country. the only time they came up is when oil prices went sky high. they can't help at all. china and india and brazil will be the countries of the future in their economic power house. they will eventually, 20, 25 years from now, they will -- they will lead the world economy. short term, it's still this country leading the world. >> right. >> we initially had the question on the currency. while some companies are looking for another currency other than the dollar to rule financial transactions, most people tell me that they see not another competitor, another choice. and i think more and more you're going to see the euro and perhaps a type of -- basket

currency come along. >> bottom line here, guys, no inflation, still deflation, low interest rates. that's it from the leading edge conference in des moines, iowa. we'll be back with more u.s. farm report in a moment.

>> welcome back to the u.s. farm report. the drought monitor hasn't changed that much this season. it improved in the southeast. there was a severe drought to start the season now you're just talking dry areas.

it has intensified towards the coast. that area is awful. you might see the pigture earlier on ag day perhaps. some of the surrounding areas and then we have pockets from oklahoma that are extremely dry as well. the jetstream by monday is showing a trough in the great lakes and the northeast. the air that has come into the great lakes and into the northeast is the coolest that you will see this time of year. that is going to let up as we head through this week. you will notice how the trough lifts a little bit. there's a hint of a trough through the north plains. that will keep things at near or below normal as far as temperatures go in that part of the country. the ring builds out west. you're talking extreme heat out of oregon and washington under that scenario right there. let's take a look at the day by day maps. monday, high pressure sitting over indiana, ohio, kentucky.

that will cause pleasant temperatures. finally. the chilly temperatures for the great lakes in the northeast. lingering showers parts of new england. along this front through the gulf of mexico and into texas. i'm not sure if those will be widespread. scattered showers and thunderstorms in the inner mountain area as well. wednesday, we will see a front come into the northern plains. stationery front causing areas of showers and thunderstorms from florida back into the southern plains and eastern rockies. by friday, we will see the heat try to build into the plain states and into the northwest, i think. that will cause hot temperatures in those areas. we'll be back in the next half hour with a longer range forecast.

speak to farmers >> i had the happy opportunity to speak to farmers from alberta this week. near cal gary is spectacular scene re. canada has avoided the worst of the global recession. having your own oil helps. several other factors pertain as well. cumbersome labor laws make it hard to lay workers off. the health care system is more generous. the banking system suffered far less shocks than u.s. banks. canada had had the only north american bank in the top ten safest banks in the world. meanwhile the debate rages here where the government should find a balance between government control and free enterprise, even among farmers. some like corn and dairy are clamoring for intervening while potato growers are aghast.

they pointed out why this is harder for many of us. when economic curves are pointing up, capitalism generates the wealth. when they turn down, socialism provides protection to people. it is small wonder that we are fighting for a tolerable place in between. send comments to our website or leave us a voice mail. coming up in our next half hour, a visit to a go cart track fueled by ethanol. stay with us. the second half of u.s. farm report is coming right up.

county fairs >> today on u.s. farm report, county fairs suffer under the recession and sparse government fund. we visit a go cart track that shows how ethanol with work in small engines. reading is important for young children but what's in it for horses? u.s. farm report brought to you by chevy, an american revolution. ♪[music] >> good morning. and welcome to u.s. farm report. local governments are beginning to feel the full effects of our economic slowdown as state aid diminish. states like illinois and california which have been hit hard by plumetting income and

dysfunction government are making cuts affecting all citizens, including many in rural america. we have the story of of one such impact. but in my county the toll has been hard on the service for the disabled. respite services for caregivers have never been more needed. the decisions facing local officials are painful. these folks deserve our support in this difficult time. let's get started with the news now. >> thank you, john. and good morning, everyone. we start this morning with a story about the economy, but one that you may not have considered. it appears that the national economic downturn is having an affect on county fairs. for this time of year, 4h kids are showing their work for blue ribbons. with state budgets types, fair organizers are not sure how much funding they can rely on. also some companies scale back

sponsor ship dollars. that's what happened in indiana. that county has not employment rate of 17% because of slumping rv sales. >> understandable, but didn't project it when we -- last year at the fair, we didn't know it would be this bad. >> we're going to continue on and worry about the money after the fair. we'll see how the gate goes and plan b the. >> the illinois association of agriculture aaffairs say that a dozen fairs could go by the way side next year. this year fairs have eliminated or reduced parking fees. others have not been able to afford big name acts as in past. how are you handling the economy downturn? many are changing their buying habits. some are delaying medical treatment. according to the university of nebraska at lincoln just released results of 14 annual

nebraska polls which is conducted if in march and april. here are some of the results. 11% of the households polled had lost a job. 35% had regular working hours or overtime reduced. and 27% said that a household member had taken an additional job to make ends meet. they had delayed medical services to save money. 69% of the rural nebraska residents said they had scaled back on entertainment and eating out. now, feeding antibiotics is a common practice for many cattle, chicken and pig producers. it helps prevent disease but it can also help growth. the practice of using drugs to enhance growth in livestock should be eliminated. deputy fda commissioner testified before a house sub committee on the use of antibiotics.

he says that antibiotics should only be used on farm animals that are sick and only under the supervision of a veterinarian. john, i'm going ask you about the fair in your con tee. i've got a fair board meeting next wednesday night. >> are you on the fair board. >> not had any more. i used to be chairman of the thing. that's a thankless job. >> there are several things going on. money is one of them. so it's a confluence of different things. there's another problem, we're running out of kids. 4h clubs are smaller. many of the classes weren't large enough to have enough people to bring a judge in. >> it's all going together. but the people that don't have the money to pay that high price when they go in to park. >> we're going to see a lot of changes in the county fairs. >> thank you, john.

>> an extremely chilly weekend for the month of july for the great lakes. that will let up a little bit as we head into the next week. the good thing about the trough is it's bringing cool air into the southeast. the great lakes has seen a cool summer that just continues. scattered showers in the northeast along the jetstream then you will see showers and thunderstorms in florida and hit and miss variety back into texas and oklahoma. any rain that you get there is good news. i don't think that will be widespread. scattered thunderstorms from the four corner region up into the northern plains. jetstream flattened out a little bit. ripples going through the great lakes. iowa, wisconsin into the northern great lakes, scattered thunderstorm for the southwest region and parts of texas also into the southeast as you can see. now, taking a look at friday then, the ridge builds. some of the models taking it up

into the plains certainly, backing it off into the northwest. there will be a lot of heat through the areas. still on the cool side but more pleasant for the northeast and great lakes. scattered thunderstorms from the great lakes into next week. we're talking july 26th through august 1st, still below normal temperatures from minnesota down into northern alabama and georgia throughout the northeast. that's where it's been coolest so far this year. next week, precipitation near normal for much of the greenbelt. below normal. above normal from southeast louisiana all the way up the eastern sea board. we're going to keep the same situation, northeastern plains, parts of the northeast below normal. temperatures below normal down to the south. above normal for the great

lakes. back into wyoming and colorado, below normal down to the south. >> still to come, find out why go carts are going green in the debate over biofuel. first we head to michigan where youngsters are learning to read and they have a captive audience. we've all heard

outhe importance of we've all heard about the importance of reading your >> you've all heard about the importance of reading to your children when they're young. how about this twist, reading to a horse. organizers of the program say it's a win-win for everyone. the kids develop better reading skills and the horses -- well, i'm sure they enjoy the company. provided by the michigan state university extension, craig has

the story. >> little black came along. >> reporter: the black stallion project has a goal of motivating students to develop their reading skills and to promote an interest in reading. >> it's the most important thing that we do in first grade. it's -- it's the best thing that we do. and they all need to have that foundation of reading before they get out of first grade. >> reporter: the scholars in the making are learning more than just how to read. >> not only have an opportunity to read to one of the beautiful horse that's we have here but they are learning about tack and equipment and they are getting an equipment to take care of a foal. >> these first graders are participating in a new hands on experience. >> i've noticed that horses are a lot -- they're soft and they're fun to be around.

>> you read the word horse, do you think the horse understands that you're talking about a horse? >> why? >> because i'm saying the word horse and it is a horse. >> so it should recognize it? >> yeah. >> combining kids and horses to increase literacy is working. >> during their literacy time, they're grabbing that book and reading with it. and there's just a huge, huge level of energy and excitement to be able to bring the two of them together. >> and what effect does this have on the equines? >> i think the horses are very curious as to what the children are doing. i'm hoping that they're absorbing the important information that the children are giving to them. >> parents will love the fact that the first graders are excelling at reading. >> there will be a lot of long christmas lists of wanting new ponies next year. >> it's about a little bicycle a pony and a horse called big red. >> i took hold of the tree.

>> i had to pull and pull and pull. >> it took a long time. >> at last i got his leg out. >> from michigan state university, i'm craig m reporting. >> up next, we take a different look at the ethanol debate. you might be surprised how well a mini machine can speed around the track on biofuels. we'll be right back. >> enter at simple and true challenge.com for a one year lease of a verse tile tractor. simple, reliable, easy to maintain.

shortage of opinions when it >> there is no shortage of opinions when it comes to the use of ethanol, especially in the small engine industry. monday is the deadline to submit comments to the epa on whether the ethanol blend rates should be hiked from the current level of 10% to 15%. many of the comments opposing

e15 are from equipment makers who rely on small engines like boats. they claim ethanol is harmful to the engines. michelle has the story of a go cart track in south dakota that has been using ethanol for nearly a decade. >> it's a typical day of family fun at thunder roads go cart track in south dakota. however what is not typical is the motor field that powers these little cars. >> this is the 8th year that we have been using e85 in the go carts. >> all it took was a $2 part to modify the go cart to run on e85. >> it's cleaner, it causes less pollution in the pit. it causes less engine wear. it's a home grown product so we're not sending money overseas. we think that's a good thing in the economic environment,

support local producers. >> it operates 135 of these go carts on e85. they travel approximately 1.4 million miles every year. and this just proves that higher blends of ethanol are safe in small engines. that's part of the testimonial that he gave to the epa that he supports the effort for the ethanol to be blended in the nation's gas supply. >> our testimony was that we have done 10 million miles without any engine problems. we think it's a myth that small engines struggle with e85. >> others in the community are fighting the move to e85. >> the testing that has been done so far on the blends doesn't indicate that it ruins the engines. >> and jennings says the fact at that it would not be a mandate but a consumer choice

takes it off the table. >> they still have that nonethanol choice of premium for those antique cars, for those boats, there are a lot of boats in minnesota, those small engines. we would want that same access today. >> to small engine owners, he says give it a try but he takes the endorsement one step further. >> i invite them out to thunder road. come out and watch us a 15-hour day run e85 nonstop. >> in south dakota, i'm michelle reporting for u.s. farm report. >> the epa will accept comments about the e15 waiver until monday. you can submit those online at epa. gov. it's that time of year when our partners at top producer magazine start looking for the best farmer or rancher in the country. they are looking for the top

producer of the year award. they demonstrate excellence in the business of farming which includes leadership, family and employee relations. the top three fine lights will receive a trip to the seminar in chicago. the winner will be announced there. find the application at top producer online.com. applications are due by september 30th. when we come back, it's time for tractor tales and our salute. stay with us.

in t

two classics to >> in this morning's tractor tales we have two classics to

share from you. tom wilson is the first and fourth winner of this harvester c. he bought the tractor brand- new in washington. 7 years later he traded it in. the used machine was bought and used by two more farmers over the years. in 2007, 41 years later, tom found and repurchased it from the original company. after rebuilding the transmission, replacing a few worn out parts and slapping on a fresh coat of paint he has it looking like he did when he first bought it in 1966. now we head south to the magnolia state and the southern nationals for a look at a '52 ford v-8. >> it's a 1952 ford v-8. >> my grandson jason put in two years. i would rather see him pull it

than me full. >> infold in the 3500 modified and 4,000 modified. >> how did you do? i di't win anything yesterday. he's making me a tractor right now. >> this is a '52 model with a v- 8 flat head ford engine in it. they put it in approximately 6500 tractors from '48 to '52. they were used out in the plains normally in oklahoma, texas, nebraska because of the power and the speed that they had. i got a kick out of seeing him pull it. >> today we are pleased to salute the presbyterian church in please ant grove, iowa as they celebrate their 170 anniversary. the first church home was in

use by 1858, 20 years after the church was founded by reverend john crawford. this church burned in 1871 although 7 beautiful windows miraculously survived. our thanks to deborah horn. the second is saint ann's catholic church who will celebrate their 150th anniversary next weekend. although the actual date is uncertain. the original bell tower was damaged by storm and subsequently removed to the side of the building in 1953. the church is also the site of a large cemetery and a focus for local history. as always, we would like to learn about your home church as well. salutes can be sent to the address on the screen. please stay with us. the mail bag is next.

weekly look inside the farm report mail bag... we've been >> a look inside the mail bag. we have been receiving lots of mail lately. you can see and comment on all of it at our website. this interesting note comes from tony prail from iowa concerning our news report about organic dairies not recertifying.

concerning the organic situation there are diverse reasons why farmers are not recertifying. the certification doesn't mean a thing any more. they allow too much that is not organic. tone oh you touch on an important problem for organic producers, policing the standards for what gets labeled organic. from my perspective, it's not with the usda rules but the problem of -- if i walk into a room with two tomatoes there is no lab test or observation that could tell me which one was organic. compare to my corn that is verified load by load by a lab test. it is impossible to rigorously enforce standards that cannot be substantiated by impartial testing. i support the right of producers to serve consumers that place economic value on how the food is produced rather than what the food is. until organic producers themselves agree on what the procedures should be and

independent testing can accurately verify the producer claims, it will be impossible to move organic certification because i say so basis. while this may be enough for some consumers, it will continue the turmoil in the organic production system. please, let us know what you think. feel free to contact us directly. send e-mails at or call and leave us a voice mail. for al, mike and chip, thank you for watching u.s. farm report. be sure to join us next week. we'll be working to do even better.