National / International News

On Turkey Day eve, have we reached peak chicken?

Marketplace - American Public Media - Wed, 2014-11-26 11:00

Before we get to chickens, here's Marketplace's Paddy Hirsch explaining the short sale:

What do short sales have to do with chickens? With chicken prices skyrocketing this year, some traders are betting that stock in American chicken producers like Pilgrim's Pride Corp. and Sanderson Farms Inc. can only go down from here, according to Bloomberg reporter Megan Durisin.

"Some people are speculating that maybe the rising supplies of chicken is going to be pushing the price of chickens down," Durisin says.

But if Wall Street is ready to cash in on a bet that we have reached peak chicken, does that mean consumers can look forward to a cheaper chicken at the grocery store? According to Durisin, the answer is maybe.

"The wholesale and retail prices don't always move exactly hand in hand," she says, "but consumers certainly could see cheaper chicken next year."

John Deere doesn't expect it to be a happy new year

Marketplace - American Public Media - Wed, 2014-11-26 11:00

Deere & Company, the maker of John Deere farm equipment, said today that 2015 will be a tough year. The firm predicts it will sell fewer big machines to farmers thanks to a slump in crop prices. 

The price tags for the company’s farming equipment can reach well into the $200,000 to $300,000 range, and sales had been good. Net income attributable to Deere & Company in fiscal year 2013 was $3.5 billion (up from $3 billion in 2012), as the company rode a boom cycle in soybean and corn prices. 

“A lot of farmers were flush with cash and they traded for new equipment,” says John Hawkins of the Illinois Farm Bureau. Farmers were aiming to meet increasing demand from an industry boom in corn and soybean prices. 

“Farmers really geared up and spent a lot on their capacity to farm,” says Lawrence De Maria, co-group-head of global industrial infrastructure for William Blair & Co. 

The boom cycle, which began in the early 2000s, was fueled by demand from emerging markets and fuel-emission standards that required more corn for ethanol. 

“We’ve seen corn that’s dedicated to ethanol go from under 10 percent to almost 40 percent of the most recent crop, so that’s led to a tremendous boom,” says Morningstar Analyst Kwame Webb. 

But the EPA is now considering lowering the amount of ethanol that was supposed to be required for 2015. When it announced the idea earlier in 2014, the news began to dampen ethanol demand.  

“So the reality is you did have an industry sort of build itself up for greater ethanol consumption than what materialized,” Webb says. 

Add to that favorable weather this year, and the supply of corn – as well as soybean – is exceeding demand. Corn prices have dropped by 50 percent, and farmers are getting more conservative with their equipment purchases, Hawkins says. “They’re going to keep that combine or tractor a year or two longer than they probably thought they would.”

In addition, a tax deduction known as Section 179 expired in 2014 (along with many others). It had allowed farmers to deduct equipment purchase expenses. Whether those deductions will be extended for the 2014 tax year is now in limbo, but it’s already had the effect of making farmers less willing to take the risk on new equipment, says Hawkins. 

“I’ve been hearing, personally, from implement dealers that that’s the first thing the farmer will say is: Well, I don’t have that Section 179 expensing available, so I’m not willing to trade in right now for a new combine or a new tractor,” Hawkins says. 

The oversupply of crops and the decreased demand for them and for farm equipment spells trouble for John Deere, which reported a 20 percent fiscal fourth-quarter drop in profit from a year ago. The company believes industry sales for agricultural machinery in the U.S.  and Canada could decline 25 to 30 percent in 2015. 

"The slowdown has been most pronounced in the sale of large farm machinery, including many of our most profitable models,” Samuel R. Allen, company chairman and chief executive officer, said in a news release about the company’s fourth-quarter earnings.

“If you say that this is a bust, then they believe the forecast they’ve put out there represents pretty much the worst of the bust,” Webb says. 

The decline in sales also highlights John Deere’s previous successes in building up during the boom cycle, says De Maria, who adds that the company will have little choice but to wait out the downturn. 

“Certainly when it is a cyclical company, and the farm economy is cyclical … they’re susceptible to those declines as well,” De Maria says. 

The decline could last a long time, says De Maria. He points to the late 1990s and a downturn he says lasted six to seven years. 

“There’s only two ways to get out of a supply situation like we are in now, and that’s an upward increase in demand or a supply event, such as a weather event. And neither one of which we see right now” De Maria says. 

Low crop prices mean a tough outlook for John Deere

Marketplace - American Public Media - Wed, 2014-11-26 11:00

Deere & Company, the maker of John Deere farm equipment, said today that 2015 will be a tough year. The firm predicts it will sell fewer big machines to farmers thanks to a slump in crop prices. 

The price tags for the company’s farming equipment can reach well into the $200,000 to $300,000 range, and sales had been good. Net income attributable to Deere & Company in fiscal year 2013 was $3.5 billion (up from $3 billion in 2012), as the company rode a boom cycle in soybean and corn prices. 

“A lot of farmers were flush with cash and they traded for new equipment,” says John Hawkins of the Illinois Farm Bureau. Farmers were aiming to meet increasing demand from an industry boom in corn and soybean prices. 

“Farmers really geared up and spent a lot on their capacity to farm,” says Lawrence De Maria, co-group-head of global industrial infrastructure for William Blair & Company. 

The boom cycle, which began in the early 2000s, was fueled by demand from emerging markets and fuel emission standards that required more corn for ethanol. 

“We’ve seen corn that’s dedicated to ethanol go from under 10 percent to almost 40 percent of the most recent crop, so that’s led to a tremendous boom,” says Morningstar Analyst Kwame Webb. 

But the EPA is now considering lowering the amount of ethanol that was supposed to be required for 2015. When it announced the idea earlier in 2014, the news began to dampen ethanol demand.  

“So the reality is you did have an industry sort of build itself up for greater ethanol consumption than what materialized,” Webb says. 

Add to that favorable weather this year, and the supply of corn—as well as soybean—is exceeding demand. Corn prices have dropped by 50 percent, and farmers are getting more conservative with their equipment purchases, says Hawkins. “They’re going to keep that combine or tractor a year or two longer than they probably thought they would.”

In addition, a tax deduction known as Section 179 expired in 2014 (along with many others). It had allowed farmers to deduct equipment purchase expenses. Whether those deductions will be extended for the 2014 tax year is now in limbo, but it’s already had the effect of making farmers less willing to take the risk on new equipment, says Hawkins. 

“I’ve been hearing, personally, from implement dealers that that’s the first thing the farmer will say is: well, I don’t have that Section 179 expensing available, so I’m not willing to trade in right now for a new combine or a new tractor,” Hawkins says. 

The oversupply of crops and the decreased demand for them and for farm equipment has all spelled trouble for John Deere, which reported a 20 percent fiscal fourth-quarter drop in profit from a year ago. The company believes industry sales for agricultural machinery in the U.S.  and Canada could decline 25 to 30 percent in 2015. 

"The slowdown has been most pronounced in the sale of large farm machinery, including many of our most profitable models,” Samuel R. Allen, company chairman and chief executive officer, said in a news release about the company’s fourth-quarter earnings.

“If you say that this is a bust, then they believe the forecast they’ve put out there represents pretty much the worst of the bust,” says Webb. 

The decline in sales also highlights John Deere’s previous successes in building up during the boom cycle, says De Maria, who adds that the company will have little choice but to wait out the downturn. 

“Certainly when it is a cyclical company, and the farm economy is cyclical…they’re susceptible to those declines as well,” De Maria says. 

The decline could last a long time, according to De Maria who points to the late 1990s and to a downturn he says lasted six to seven years. 

“There’s only two ways to get out of a supply situation like we are in now, and that’s an upward increase in demand or a supply event, such as a weather event. And neither one of which we see right now” De Maria says. 

The government is literally buying tons of cranberries

Marketplace - American Public Media - Wed, 2014-11-26 11:00

The Department of Agriculture says it's buying $55 million worth of cranberries to reduce a huge market surplus and falling prices. They're facing pressure from the Congressional Cranberry Caucus, which is a real thing.

The agency will get 68 million pounds of cranberries and cranberry-related products, which will go to food pantries and other low-income food programs. 

We covered this very same cranberry crisis about a year ago, so if nothing else it's nice to get some closure.

The lingering cost of rioting

Marketplace - American Public Media - Wed, 2014-11-26 11:00

As Ferguson, Missouri, begins to quiet, there is a lot of work to be done to rebuild trust between citizens and law enforcement and to physically rebuild businesses that were damaged in the protests.

When those businesses reopen, some questions will linger: Will life in Ferguson ever be the same? How will these months of civil unrest and anger affect the area's economy, not just during this holiday shopping season but a year from now, five years, 10 years from now.

On a recent morning, I stopped by a park in South Central Los Angeles, a neighborhood that has its own history of unrest. It was just after sunrise when I met Fred Tarvin. He was starting his shift as a security guard at the Watts Towers, an otherworldly sculpture made of ornate spires that shoot up nearly 100 feet into the sky.

Tarvin grew up in this neighborhood.

"When I first saw the towers, being a young man fresh out of the service, I thought it was just a piece of junk," he remembers. Today he has a different opinion. He calls these spires a mighty work.

But most people familiar with the name Watts know it not because of these towers, but because of riots that burned much of the area nearly 50 years ago.

"A lot of people didn't want to come over because they figured Watts is just bad, because it's got a bad name," Tarvin says.

Watts struggled to recover economically after the riots, and it wasn't alone. Severe rioting erupted in poor black neighborhoods in Newark, Detroit, Washington, D.C. and other cities in the 1960s.

Two economic historians, William Collins and Robert Margo, studied owner-occupied housing data to see how much of those cities' economic declines could be attributed specifically to riots.

In places where severe rioting occurred, property values fell, Collins says, "by about 10 percent relative to where we think they would have been in absence of a riot, or in comparison to places with that had much less severe or no riots." Property owned by blacks saw values drop by as much as 15 percent.

But what was most surprising was that these losses lasted through the 20 years they studied. Some cities still haven't recovered.

"So a question that is especially relevant in the wake of an event like a riot," Collins says, "is 'Does a place bounce back quickly from this, and if it doesn't bounce back quickly, why not?'"

The reasons are complex. Many of these neighborhoods were poor before the riots, and each place has its own circumstances. But there are some common experiences after a riot. Insurance rates go up, cities tend to spend more on police and fire protection, and people who can afford to move away often do.

"So if your tax base is being diminished at the same time that you're increasing demands for police and fire, this is the sort of stuff investors might think of as potentially weakening the fiscal position of cities," Collins says. This makes it harder for to raise money for revitalization projects. It's harder to attract businesses and developers, and news coverage can paint a negative picture of a place.

The 1960s riots were dramatic and catastrophic.

"The events in Ferguson don't rise to the same level of severity that we saw in the 1960s," says Margo, "so that would lead you to suspect that they wouldn't have any long-run effect."

On the other hand the riots of the 1960s lasted only days, Margo points out, while the unrest in Ferguson has gone on for months.

Tennis star Andy Murray gets engaged

BBC - Wed, 2014-11-26 10:54
Tennis star Andy Murray has got engaged to his long-term girlfriend Kim Sears, his agent has confirmed.

Moeen electrifies England but batting problems remain

BBC - Wed, 2014-11-26 10:54
Moeen Ali’s bold style of cricket lifts England but the team also needs to play smarter cricket, says analyst Simon Hughes.

Richard III reburial appeal starts

BBC - Wed, 2014-11-26 10:48
A public appeal to raise part of the £2.5m cost of the reinterment of Richard III is launched.

Ferguson Documents: What Michael Brown's Friend Saw

NPR News - Wed, 2014-11-26 10:19

Dorian Johnson is a shadow figure in the Michael Brown case. Aside from officer Darren Wilson and Brown, he had the closest look at what happened. This is his story.

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Justice Ginsburg Recovering After Heart Stent Implant

NPR News - Wed, 2014-11-26 10:05

The 81-year-old justice had the procedure to clear a blocked right coronary artery. She was expected to be back on the bench when the Supreme Court reconvenes on Monday

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Those Phone-Obsessed Teenagers Aren't As Lonely As You Think

NPR News - Wed, 2014-11-26 09:58

Teenagers may not need as much face-to-face interaction as earlier generations to feel connected. And that may explain why a study finds they're not feeling as lonely, either.

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Your Wallet: Gentrification and your finances

Marketplace - American Public Media - Wed, 2014-11-26 09:52

Next week, Marketplace is taking a special look at gentrification and neighborhood transformation from a pop-up bureau established by the Wealth and Poverty desk in Los Angeles' Highland Park neighborhood. 

We want to know what gentrification means for your wallet. Maybe higher rent? Or more kinds of stores? How has your changing neighborhood impacted your personal finances?

We want to hear your stories. Tell us by visiting our website, or tweet us, we're @MarketplaceWKND.

Police 'chased autistic man for fun'

BBC - Wed, 2014-11-26 09:34
Two police officers chased an autistic man for "fun" before one attacked him, a court hears.

Huge cocaine haul found in furniture

BBC - Wed, 2014-11-26 09:33
Police discover one of the biggest amounts of cocaine ever found in Northern Ireland in a delivery of furniture.

'Fewer adults in higher education'

BBC - Wed, 2014-11-26 09:31
The number of adults in further education in England fell after they were required to borrow to pay for their courses, official data suggests.

Twins become fathers on same day

BBC - Wed, 2014-11-26 09:26
Twin brothers beat 'odds of 150,000/1' and become fathers of baby boys within hours of each other at the same hospital.

Gangster Frankie Fraser dies aged 90

BBC - Wed, 2014-11-26 09:21
The criminal and contemporary of the Kray twins, "Mad" Frankie Fraser, has died aged 90 in hospital, former associate Eddie Richardson confirms.

Learning the facts about learning

BBC - Wed, 2014-11-26 09:10
Government-commissioned research suggests many of the approaches to education we think work, are actually useless or even make matters worse.

Two men die 'snorting white heroin'

BBC - Wed, 2014-11-26 08:51
Two British men have died in Amsterdam after reportedly snorting a drug thought to have been white heroin.

Former CBC Host Jian Ghomeshi Charged With Sexual Assault

NPR News - Wed, 2014-11-26 08:43

The charges against the former radio host carry sentences ranging from 10 years to life in prison. Ghomeshi was publicly accused of violently assaulting women during sexual encounters.

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