. hello and welcome to united states farm report. just when you think old dogs and new tricks don't mix someone come as long with a better dog treat. like most you we have been most hot and dreading the bill. because of power smart pricing we have some control over the cost we are saving almost 40%. we agreed to have a special meter put in and we check hourly price that aree mailed to us each day. today will vary from two to 11- cents b.. by timing the use to avoid 3 to 6:00 p.m. we can save enough to buy a major wood working tool or some stupid green house stuff. guess what is more likely. time for the headlines. here is tine. >> thank you. as the heat and dry weather

continues to blast across much of the united states, the nation's crops continue to suffer. in the latest conditions report u.s.d.a. said less than half of the nation's corn, soybeans and cotton crop are now rated good or better. the most recent progress report shows the nation's corn crops on eight point decline in condition rating last week. 40% is good which is down five points the last week. nationally soybeans dropped eight points and is now 45% good to excellent. 47% of the cotton crop is good to excellent. as crops go down so do pasture and range land condition, 43% of the pasture and range conditions poor or very poor, up seven points last week. only a quarter is rated good or excellent. oklahoma state university's says because the drought is so widespread the impact will be more widespread as well. >> expectations now for corn yields have dropped from nine to 15 bush manies an acre

depending on who you ask. that changes conditions now so we don't expect any feed market relief from the -- from the current corn crop that we see happening. instead we will remain tight and we have seen corn prices in terms of futures go up dramaticly in the last two weeks. >> he said producers need to assume the worst and start making a plan. he said they have seen quite a bit of cattle movement including early marketing of calves. the drought could force future contracts to be renegated between produces and buyers. lower yields could force farmers to buy back the bushels they aren't able to supply. he said not only does it mean they could fail to meet the contract already n ated but producers could loose more money if grain prices rice above their locked in rate. the committee passed that

version of the farm bill similar to the -- it eliminating direct payments and reduces food stamps,, overall the house version would savor 35 billion over ten years. those are the headlines. >> . not a lot of happy talk this week. in kent can't a farmer said his pastures and hay fields are gone. he said they sold nearly everything that was big enough and are feeding all the kois. in minnesota, a former commented on how quickly corn can use up soil moisture. his fields got three inches of rain a few weeks ago but it's gone. and a heart breaking

picture of blight in corn. this can strike anywhere. allen in southwest missouri sent us this timely warning. when we come back al talks markets. we are back in two minutes.

. round table guest here on united states farm report. we have bill, we have richard brock, brock associates.

friday was a real down day on the markets. now what happened -- you told me the markets up for the week off camera. >> they were, had a great week. friday friday was down. profit taking. there was pressure from the outside markets. light. so we did take off some of the top end. 8 two cents hiver on beans, 51 on wheatt. was a huge week for agriculture. they were all lower. >> the markets on friday narcotic what drew the markets down? >> it was a big factor. >> how can be do that -- one day of trading we didn't do anything on the 4th of july. >> are in a classic weather market. this will continue with at least -- at least another month. this coming week's report will be a pretty big report and i think it'll be interesting to

see what the u.s.d.a. does on the demand side as well and on the production side. i don't think they will cut the production as much as most of us are anticipating that the crop is already been hurt but real key will be on the demapped side. this kind of price i think is healthy for the market if we do get a small set back in here and friday's set back was really small. i would like to see something more, otherwise, you can top this market quicker than most of us want to see it happen. >> almost everybody trade the market looks at the government reports and this kind of sets a standard. you think a report will be real this point around because you are telling me kind of off camera it'll belower than the government normally lowers the report? >> normally the government in the worst of years will only lower this report by 3.8% in corn. i don't think any of us think it'll be close to 160.

we are guessing that it's -- that the real yield today, probably around 150, if the drought continue itself will go down quicker because right now we are losing bushels fast. >> i think that -- it may be in that 155 to 158 area. i don't think that number is civil i think the anybody numbers will they start adjusting their corn for ethanol use and their export numbers and their animal use. all of which we -- will belower than what they are forecasting. you look back in the last ten years we have had five weather markets started in june and -- in the faster they go up the faster they come down. we think this will be over with before we get through august and we also think it could be prices -- quite a bit higher than right now. >> the damage will be done before we get through august. >> yeah.

normally right now you are hearing about how high corn prices and bean prices will go. reality is like what rick said that we are going to put prices up high enough, fast enough where you know if we kept prices here demand would be toast. it would adjust and we would still have the 800 carry over. after it starts raining you will have all the speculators looking for a way out. >> when it starts raining, and depends where it starts raining. i know some areas the rain won't help unless they grow winter crop some sort or theo. when we come back i will ask you both and -- you can think about it. what should a producer do whether he is already made his decision or whether he hasn't because there is an opportunity to actually minimize your losses, or maximize your profits and sometimes they blend. when we come back with more united states farm report.

. round table guests, we have richard, brock associates, told you the questions will be and they will be what should people be doing to maximize profit and avoid losses. >> it's very different. if you were producer in -- in minnesota right now with a record corn crop coming on verses a southern illinois or indiana or ohio farmer. >> different answers. >> so, let me just do a blanket answer. first we are probably going to have -- i think a three year top with in the next eight weeks. we will blow this thing off, cut demand, very bad thing to do. you have a the short term and the long term. this is going to encourage huge ingrains in acres worldwide of corn, you are cutting demand allot wrong things in the macr," picture. one lass to look and control

their emotion, on -- it's interesting just a couple days ago someone said will you be sure to give us the option strategy on how to lock in all of my 2013 corn and bean crop. you know we have seen producers in the last three years because of the volatility back away were using futures and options. a lot of those people wish they wouldn't have because it was not easy to get out of those three weeks ago. now the market has gone up. people got out with hedges. i think a person would have to have option strategies combined futures in order to do a good job. >> markets strategy i will ask you know what should a producer do? >> i think you need to protect yourself and get yourself into a comfortable position where you aren't freaking out because this is a scary situation. >> freaking out weather. >> with that, you know you can put on call spreads or do some

things to manage a price range. the upside protection and it won't cost you much. let's just say you spend 40- cents, that's 20-cents across the farm. it's not a big cost. okay so that's a good management thing. the second issue that rick brought up which is a serious one you better getta hall of your cash contracts and find what your commitments will be. there are two thing its going on. these new cash contracts can require margins and can require physical delivery even if you don't have it. some of them won't have the out clause this year if they are in a bad area. we don't know that. i think that are things you need to tipped out and know what your risk is. >> so a lot of challenges out there and we need to do to right now. >> this is a good -- a good plug for our regulated industry. this is where you know using your futuring options plan and

sticking to it is -- it's stressless. >> it'll be -- in the last three years, most of them have been better off not using futures and options because of the kind of markets we have had. that won't be the situation this year. it'll have a diverse marketing strategy, using futures and options will pay off big dividends and those who don't i think are going to pay a big price. >> in awful the structures we have put together right now our structures are usually we have a floor price and then a ceiling price. so you know we -- our floor price is close to the high of the market and now our ceiling price is at a great price and we still have upsides built in so we can gain verses a cash contract where are you just locked in. you know it's just -- and you have to make delivery and you couldn't make the margins on that. the structures are just way bet management especially if we go

out multiple years. >> managers talking about actually takes a lot of book work and thinking not just making the decision by going to the elevator and saying do this. >> i think that the producer who doesn't have a crop this year, particularly doesn't have high revenue insurance will have a hard time making the decisions because he is in -- in a box right now in the old crop and it's hard to think about what to do over the next two year when is are you worried about getting this one grown. >> i'm going to you can what month will have the high price on beans this year? >> i think the high price by july 21st when we have -- [inaudible] and it'll rain. >> you degree? >> i think the top in both markets before the end of july. >> both markets, that includes corn. >> yes. >> you agree on corn? > y. >> i just wondered. guys will know what it is. get that decision. we will be back with more

. the man man of the hour is mike hoffman. we were just talking, all talking about 80 and the bermuda high but this ask a different kind of blocking ridge. >> just about. the northwest has been cooler, much of june was cool net northeast though they turned hot as well. are you right when you look at this drought monitor, goes from coast to coast. are you talking a couple of spots in california, extreme and severe drought and parts of the carolina's in the extreme and severe in parts of georgia and south carolina. going from coast to coast the only real area that aren't to bad are the northeast plains across the northern great lakes. much of florida, it has trained -- since last year, this was just devastating across many parts of the corn belt.

even though we see relief from the heat i'm not sure how much from the moisture, the lack of miss tour. it doesn't bring a lot of moisture. that's what we are looking at. so if you get a thunderstorm, you are doing okay. the ridge for the first time actually going back to what we thought it would be most of the summer, back in to the west. as of now it looks like it'll stay there for a while. the trough will weaken but won't get back to the hot levels. you will notice near the end we almost try to get that ridge to come coast to coast but we still have weakness there in the middle mississippi valley into the eastern part of the

country. cooler this week. not as hot. after that we may change it for good. its going to take a while to quiet there. there is the front as we start the week. cold front heading southward slowly that. will be the focus for showers and thunderstorms . none of it appears to be a widespread rain. the afternoon variety showers and thunderstorms, by website wednesday that front stalls out from the carolina's down through lieu lue into the for corner area. there may be good moisture along this front but it won't be widespreadt. will be areas of showers and storms. it'll be cooler than we have seen across the great lakes, most of the plain states, by friday a warm front may cause scattered thunderstormsa cross the upper portions of the midwest. continuing to be the focus. >>

. last april an event

happened which though preare predicted was way ahead of schedule. during that month the amount of power generated by natural gas matched the amount generated from coal. 32% of the total. until that moment america always depended on coal. i spent all last winter alerting audience that this change over could happen as fast as 2016. the speed of this shift caught even experts off guard. certainly disrupts the energy business model. big coal is a alarmed states like wyoming and west virginia are under going significant turmoil. right now it looks like they could be heading west to sell the vast supplies to chain a. the explosion if you will forward the explosion of gas and oil production due to new technology that frees tight supplies was expected to be a game changer but the effects are arriving way sooner than predicted. by the end of this decade our

dependance an foreign oil could be trivial this is a huge event. it'll alter life, it'll relieve pressure on energy prices and especially keep power a relative bargin. the consequences are hard to grasp. this good good news is one reason to be careful when buying in to warnings of any kind. we are a resourceful culture and with effort i see no problem facing us that we can't tackle. let us know what you think. send e-mail to mailbag at united states farm report.com or call and leave us a voicemail. coming up in the next half hour, how to paint your horse, not a picture, the real horse. stay with us. the second half is coming right up.

. today on united states farm report a cow has to eat. livestock producers get help as the fsa opposite up crp for grading,s wto rules against the united states and one crop is still having a banner year in 2012. >> united states farm report brought to you by the chevy silv era do. . hello and welcome to united states farm report. it's becoming clear this year will not produce a lot of bumper crop though i was mistaken about 2012 being the 4th below trend yield for corn, it'll be the third. it's happened only twice

before. prior to 2010 the industry was convinced we had shifted the trend line. now it looks like we were more lung lucky, the trend will shift, but not up. teen is here with the headlines. >> thank you john. the drought situation is a scary picture across much the united states and hasn't improved over the past week. the latest monday tortious three quarters of the united states suffering some level of drought. as you request see the monitor shows most of the united states is being hit by some form of drought. last year it was 37% and -- the drought monday tore shows the drought taking its toll on most of the major areas in the corn belt. it wasn't enough to provide relief. as the drought gets worse --

state farm service agricultures have to step in and help. fsa has started approval for emergency grazing including in the list is colorado, kansas and nebraska. fsa grant states the authority to allow grazing on a county basis. it helps provide emergency relief under certain natural disasters like drought. the world trade organization said the labeling law violates global trade law. they said it's wrong because it gives less favorable treatment to beef and pork from canada and mexico. currently the labeling law requires people to put labels on various cuts of fresh meat. it means the united states may have to stop forcing retailers to display the origont. became mandatory in march of 2009. thousand picture looks bleak there is one crop heading for a record breaking yield. the almond crop projected to

produce -- a 5% increase from the may forecast. the projection is based on 780,000 bearing records, it's forecasted despite the early march frost that left spotty damage. drought has been the major theme. now i was only a few years but you had to be at least 50. what's your memory of that? >> thank you. thank you very much. 88 is in our memories. a lot of guys remembering that. it's one of those situations that you had to endure and come out the other side. that's probably you just hunker down and count and see what happens. let's get to that news. mike joining us now. >> first time you are seeing

the ridge, what we call retreating back to the west. we are talking the rocky, western plains where the ridge will be and a trough in to the great lakes narcotic means cooler air -- that means cooler air. we are talking near normal. as the schooler air comes south we will see areas of showers and thunderstorms. i'm not seeing any widespread rains, no drought busting rains, we will get rain where we can and some areas in -- in that part of the country as that front shifts southward. that front will stall out. the southeast -- that will be the focus for showers and thunderstorms on wednesday. good trough. some pleasant air for a change. the great lakes in to the northeast. now the northeast had a cool june. for those folks this has been a short or -- not a very long lived heat wave so far for them but the heat goes back to the west, you can see that, these

will be afternoon variety showers and thunderstorms, typical for this time of the year for the desert southwest and the four corner area. by friday it weakens a little bit. still little bit near normal, slightly below normal for the northern great lakes in to the northeast but it comes back a little bit. ridge tries to build in to the northern plains as well bringing some more -- the following week we will see that ridge expand eastward again. we will go -- into western illinois and to the west coast. i don't they the expansion we just came through or the rally high temperatures we just came through, again as we head through the summer. near normal for the eastern part of the country, below normal next week and that will be july 15th through the 21st for central and south florida. through time we are thinking the ridge should try to stay out west for most of the

summer. now, next week don't get your hopes up to much. since we are in a drought. the computer model its are showing a fair amount of moisture, missouri valley, eastward to the midatlantic. we will have to wait and see. in to the northwest and the west coast. as far -- we are going above normal for most of the country but the far south, the far eastern seaboard and the northern great lakes into new england. those areas not as hot as we have seen and again we will see more and more i think cooler air in to the northeast. 30 day outlook for precipitation, we are showing above normal for the -- for the basically the northern and central appalachian's and the southwest but below normal for parts of the middle of the criminal i don't see a drought bust ernie time soon. >> a drop in temperature, that was horrible. it's hard to think you are talking about mid80s and that could be a 20-degree decrease for the high. >> cooler but not cool.

>> i will taket. thank you. spirit of the heart land is next.

. horses are beautiful animals and their physical make up is fascinating. some are learning about it through a unique exercise. in this report, chuck says the lessons started with a bucket of paint. >> the blend of animal science and art. from rum are many to rib cage and beyond. a living, breathing, beautiful creature. meat dot and her friend, teammates in the 4h horse project. they love this is exercise

where kids highlight the bones and muscles of the animals. >> it's much easy tore see each individual section of bone, each grouping and each bone in and of itself instead of on a sheet of paper. . >> horses are certainly bigger than people but they have about the same number of bones. the idea here is to use the painted body as a teaching tool. appropriately named matt horse man says kids learn the animal with each brush stroke. >> you try to find a fun activity that really builds the confidence because a lot of them love to ride horses and you find ways to take the riding and build it down into an educational activity learning the importance of the musses and bones. >> we tried stickers -- that just didn't work.

>> megan is dot's human and a volunteer. it was her idea to try this and said once the horse is decorated the effect is startling. . >> i think so. each kid works on a separate area and when it was all done and everybody stepped back and saw what the others had done, it -- the whole thing tied together. it was really great. >> dot has been a very good sport about this. don't worry. this is not a tattoo, the paint should wash off in a week or so. call it a henna horse tattoo as the painting session ends and she is able to release her inner zebra. now as she is lead around they can study her body and framework through her graceful move mints. a little paint, a steady hand and a willing subject and you have a outline for learning. >> chuck said it took about 45 minutes to paint. the horse was unavailable for

comment. next week insider's look at the winter wheat harvest. an event that brings communities together across the great plains. harvest of beauty airs next week. up next this weekend pork producers react to a push to remove gestation stalls.

the annual world pork expo wrapped up in des moines last month . 9 world pork ebpo. drew more than 20,000 to the capitol city. the main topic of conversation surrounded announcements by several including mcdonalds to only use pork from operations that do not use gestation stalls. michelle talked to producers and industry leaders about 9

impact the trend could have on the farm and at the grocery store. >> a storm is raging the push by food companies to ban pork in gestation stalls. >> it's because of pressure on the brandts and by hsus. >> reporter: the governor said it's unfortunate the groups are bullied the companies. >> problem is the people behind this are people that are against people eating meat in the first place. so they are using misleading and smear information so try to -- impact decisions. >> as a result brand plans to talk to them firsthand. >> in fact i'm going to go town and meet with the folks in

arkansas with. >> consumers drove it in europe but it back fired and was an important lesson for the united states. >> 20 years ago some of the legislation was put in progress in england. you look at the industry today and it's 50% of the size it was 20 years ago. they wereself sufficient. they are importing half of their product this year. >> however the legislation could be repeated in the united states. they are also pushing to legislation that could set a dangerous precedent. >> i would expect that if they think that the industry isn't moving fast enough they will look at legislative fixes whether it's on the state level or federal. >> pork producers say the change is being driven by consumer pressure but was done without consulting producers themselves. in fact they found out about most of these decisions through press releases. >> we have been very disappointed in some of those

announcements and the disappointment kuhns from sometimes making the announcement without getting producers engaged in to the decision. >> he said food companies are basing their decisions on misinformation. >> on the other hand it's unfortunate that after they make the announcement is when they call us and say what have we done? >> right now they are just frighting to be able to control production practices. >> i have responsibilities each and every day to feed them, water them, make sure it's taken care of every day. with that responsibility in my mind also comes a right. a right to decide how i want to house that animal. >> we have the better means to make those decisions than some of these companies. >> beyond that there has been no discussion on what kind of premiums producer also get for the production or who will pick up the cost for the changes. >> really important to understand, more -- what they want. what they are willing to pay for. what type of product they are buying because off of this is

at a cost. that cost could change the face of the industry over the next few years. >> i think it'll. a -- we will go we aren't building new buildings and we will phase out. >> they say it's their responsibility to satisfy their customers needs and they will work hard to do just that. >> thank you. when we come back its time for tractor tales and our country church salute.

time for tractor tales - al, where are you taking us this week? . we were just talking, this is one that neither of us heard. >> from the northwest corner of washington we found a guy with a br john deere.

we met him, he found it in a very unusual way. . >> a 1945br john deere. it's a regular. it was used on the farm. when i bout it was in -- pretty bad shape. it had chains on the tires and a snow blade on the front welt welded to it. i had no no motor work. it was in good shape. over did that -- i use it some for fields and whatever. i use pretty much all my tractors. very six of them. guys come to the tractor show, you have a sign on the back of the -- the back of his back and the tractors that he was selling them. that was a tractor i was looking for at the time. i called him and -- i got ahold

of him and left it there and he said you know when you leave it there there is eight feet of snow. i put a lot of anti freeze in it and got it the next spring. you find more bo's because out here in this part of the country, they -- there are a few more than br's. this is the electric start and dashboard on it which the other one doesn't. they always want me to bring the br. it's a same size at the b tractor, always have a wide front end. the axle is heavy. it's differenten me no trouble. >> don't forget, you can find it online or on facebook. the second degree helicopters can be down loaded from i-

towns. >> tonight we go to kimberly idaho. located east of twin falls it's a town of about 2600 people. church is celebrating it's 100th anniversary this year. it was organized may 19, 1912 with 36 members. it was done in 1915. it's still in use today. our thank you to the jim for sharing the news and layings to the church. we want to learn about your home church as well. salutes can be send to the address onto screen. stay with us. the mailbag is next.

weekly look inside the farm report mailbag.... . time to hear from you . craig copeland sent a response to my moments about public acceptance of global warming. eve farmer would do better without the agenda. plus the show would be so much better if you would just stick to the facts. craig thank you for e-mailing. first my agenda as you call is it just my opinion. ovechkining analysis is any job. its clearly labeled as that and is not presented as news though i make sure i can back up my position with hard evidence. i am particularly caution when speaking about climate change. if you read the script in question on our website, you may notice that i was actually talking about a curious change in public perception of climate change, not it's validity.

it says we no longer use facts to decide issues like this. we distort through them to find those though just through justify our position. the poll i cited is a fact and hot weather has many people warming to the acceptance of climate change. if you will forgive the fun. since public -- unlike the science community is unlikely perhaps a better approach would be to make bets. we are betting our farm that they are correct. others can put their moppy on different outcomes. as always we want to hear from you. send comments to mailbag at united states farm report.com or leave us a voicemail. for all of us, thank you for watching united states farm report. be sure to join us next week.

today on u-s farm report... heat and lack of . united