Friday, February 23, 2024

U.S. dairy herd growth hits a 22-year low; breeding for beef operations offers significantly higher profit margin

Amid worldwide cheese and beef consumption increases, there's a hiccup in the American supply chain -- beef production is hampering dairy growth because there aren't enough heifers. "Dairy herd expansion is unlikely to occur quickly as the beef industry continues to bid up for young stock and dairy heifers remain in short supply," reports Fran Howard of the Daily Herd. "Dairy producers can make more money breeding for beef operations than they can producing heifers for their own farms or their neighbor's operation, according to Sarina Sharp, an analyst with the Daily Dairy Report."
Dairy producers profit from raising crossbred bull calves.
(Photo by Maureen Hanson via Dairy Herd)

The profit margins on livestock reflect the shortage. Howard reports, "At a late-January livestock auction in New Holland, Pennsylvania, cattle feeders paid an average of just over $414 for newborn Holstein bull calves, the highest price in eight years. But dairy-beef crossbred calves brought a whopping $675/head at the same auction, and crossbred heifer calves commanded a similar price."

For dairy-cattle producers, the profit difference is dramatic. Sharp told Howard, "If this margin holds, a 1,000-cow dairy that produces crossbred bull calves can expect to earn about $100,000 more in 2024 than it would selling Holstein bull calves. High beef calf prices are sending a clear signal to the dairy industry to make more beef calves and fewer dairy heifers. And the industry is listening."

The Department of Agriculture estimated that on Jan. 1, there were 4.059 million dairy heifers. "While that was only a 0.35% drop from 2023's steep decline, the decline still marks the smallest heifer inventory in 20 years, according to Sharp's calculations," Howard explains. "Sharp noted that just 2.59 million heifers are likely to calve and enter the dairy herd in 2024, by far the lowest inventory in USDA's 22 years of projections."

Sharp told Howard, "Waning heifer inventories will ensure that growth in the U.S. dairy herd will be slow and costly. If the industry develops an appetite to expand, already lofty heifer values will shoot upward, raising the cost of filling a new barn. The increasing popularity of crossbreeding suggests that the heifer shortage will continue for years, reducing how quickly the industry can respond to high milk prices." 

Wealthier, more metro residents have access to local news, while lower-income communities often live in news deserts

Medill Local News Initiative map, from Local News Initiative data

As local news outlets dwindle, lower income residents are more likely to live in a news desert than wealthier residents, who are more likely to live near or in a metro area. "The State of Local News Project at Northwestern University documents the changing local news landscape across the country. Our latest report shows that where you live and how much money you make affect whether you live in a news desert or a news oasis," reports project director Sarah Stonbely for The Conversation, a journalistic platform for academics. "This divide is related to other factors affecting the health of our democracy, as analysis of our data by the nonprofit Rebuild Local News showed."

The expansion of news deserts means areas have no outlets reporting on local news or civic meetings that help residents stay informed and involved in the democratic process. Regional news revenue has shrunk as social media has taken chunks of advertising dollars without investing in local communities.

Without ad revenue, "Many outlets rely on audience funding, philanthropy, cost-cutting or some combination of the three," Stonbely explains."In communities with little disposable income for news subscriptions or donations and no local philanthropies, cost-cutting becomes the only option. This creates a self-reinforcing spiral of lower quality and declining readership and, ultimately, closure."

Right now, the determining factor between news haves and have-nots is money. Stonbely writes, "Wealthier communities do better sustaining local news organizations. . . . An example is the Moab Sun News, which is thriving in the rural rocky highlands of Utah, thanks in part to a robust tourism industry and retail base. Though it serves a relatively small permanent population of 5,321, the Moab Sun News has built a sustainable business model."

For some news outlets, the current market is not sustainable. "All told, 1,558 of the nation's 3,143 counties have only one news outlet, while 203 are news deserts with zero, meaning there are likely thousands of communities that simply do not have access to local news," Stonbely reports. "For example, Texas and Tennessee had four counties lose their only remaining newspaper last year. All eight papers were independently owned."

Despite the tough market, ways to help sustain local journalism -- especially in challenging markets are emerging. Collaboration is one way. "In Colorado, the national nonprofit news outlet The Daily Yonder has hired a reporter based in a rural community to write stories about life there and share them out with both local and national organizations," Stonbely reports. Another option is philanthropic support. "Public policy should also play a role. At the state level, policies to support local news have seen success in New Jersey, California and elsewhere, and more bills are working their way through state legislatures."

Americans haven't spent this much of their money on food in decades, and relief is not coming anytime soon

Wall Street Journal graph, from Department of Agriculture data
If you feel like your grocery bill is gobbling up more of your paycheck, it's not your imagination. "The last time Americans spent this much of their money on food, George H.W. Bush was in office and "Terminator 2: Judgment Day" was in theaters," report Jesse Newman and Heather Haddon of The Wall Street Journal. "Eating continues to cost more, even as overall inflation has eased from the blistering pace consumers endured throughout much of 2022 and 2023. Prices at restaurants and other eateries were up 5.1% last month compared with January 2023, while grocery costs increased 1.2% during the same period, Labor Department data show."

Why is this happening, and when will it end? Food costs increased as inflation spiked up prices across the board, but even as other costs ease, food costs will likely keep their post-inflation era price tags. Steve Cahillane, chief executive of snack giant Kellanova, told the Journal, "If you look historically after periods of inflation, there's really no period you could point to where [food] prices go back down. They tend to be sticky."

To lessen pocketbook drain, "Many diners have said they are going out less frequently or skipping appetizers, while buying cheaper store brands more frequently at supermarkets and seeking out promotions or deals offered via apps," Newman and Haddon write.

Still, many food companies are seeing profits dip based on higher commodity prices for sugar, tomatoes and cocoa and increased labor costs. The Journal reports, "Companies are set to pay more for staffing after 22 states lifted the minimum wage for hourly workers in January." 

One kernel of good news is that some peak prices may come down. Newman and Haddon explain, "Although it is rare for food prices to retreat, it is also unusual for prices to skyrocket as much as they have in recent years, said TD Cowen analyst Robert Moskow. He said he expects grocery prices to decline for a period this year as food makers come under pressure from consumers and retailers."

One alternative to the housing shortage crisis is to build really small homes and reduce costs

The view from the front entrance of a small home. 

(Photo by Ivan McClellan, The New York Times)

Once relegated to the world of socks, compression has come to the housing world. "Thanks to soaring housing prices, the era of the 400-square-foot subdivision house is upon us," reports Conor Dougherty of The New York Times. "This is not a colony of 'tiny houses,' popular among minimalists and aesthetes looking to simplify their lives. . . . It's a chance to hold on to ownership."

Ten years ago, the housing market was booming, making home ownership for a roomy 3-bedroom out of reach for many people. In response, "Home builders have methodically nipped their dwellings to keep prices in reach of buyers," Dougherty explains. "The downsizing accelerated last year when the interest rate on a 30-year fixed rate mortgage reached a two-decade high, just shy of 8 percent."

The period of mega-square-foot homes might be giving way to the not-so-big house. "A move toward smaller, affordable homes — in some cases smaller than a studio apartment — seems poised to outlast the mortgage spike, reshaping the housing market for years to come and changing notions of what a middle-class life looks like," Dougherty writes. 

Some state and local governments are working to encourage the "great compression" by making construction more doable. "To reduce housing costs, or at least keep them from rising so fast, governments around the country have passed hundreds of new bills that make it easier for builders to erect smaller units at greater densities," Dougherty reports. "Some cities and states — like Oregon — have essentially banned single-family zoning rules.

All creatures: Thousands of boar hybrids; loss for Cajun cooking; the better animal spy; is too much bacon possible?

A herd of boars roaming through a forest.
(Photo by Rolf Scmidbauer, Unsplash)
With thick fur to guard against stifling cold, keen minds and tusks as sharp "as steak knives," wild boar hybrids are "raising hell on the Canadian prairies," reports The Economist. "It seemed like a good idea at the time. When Canadian pig farmers were told in the 1980s that their animals' gene pool was thin, they turned to wild boars from Britain for fortification. . . . In 2001, the boar-meat market plunged. Some farmers, unable to sell their stock, simply released their hybrid pigs into the wild. . . .Today, those pigs' descendants roam the Canadian prairie provinces, a horde some 62,000 strong."

From East Texas to Louisiana's Acadiana region beats the heart of Cajun cooking, where recipes are usually chockablock full of boiled crawfish. But this year, Procambarus clarkii, also known as the red swamp crawfish, crayfish, mudbugs or crawdads, is not affordable for most. Its price is up nearly 500%. "Drought and last winter's hard freeze forced crawfish spawn die-offs ahead of their ongoing harvest time," reports Xander Peters of National Geographic. "The shock felt throughout the U.S. crawfish market is absorbed by its blue-collar producers and restaurant owners, as well as folks working in processing plants, deshelling crawfish, and delivery-truck drivers."

Photo by Marco Ugarte, AP
Crawfish aren't the only species having a hard time surviving extreme weather. The annual survey of monarch butterflies "found the second-lowest number of monarchs on record," reports Jenny Peek of Wisconsin Public Radio. "Monarch populations are extremely sensitive to high heat and drought — both of which are becoming more common with climate change. Habitat loss is also a major contributing factor to the species' decline."


Understanding chicken life and egg cartons
can be perplexing. (Unsplash photo)
Do happier chickens mean better eggs? Maybe. Read here to find out what kind of "wide open spaces" chickens like and what "label" is the best chicken environment. Still, even with that information, you may need help deciphering the egg carton. Read here to decode egg carton descriptions.

We have too much bacon. Whaattt? Bacon fans might be shocked, but talk to a U.S. pork producer, who will confirm that the nation has more pork than it can eat. "From giant processors to the farmers, they've made production so efficient that demand can’t keep up with supply," reports Patrick Thomas of The Wall Street Journal. "In search of solutions, farmers and processors are looking at everything from new overseas markets to fattier, tastier pigs."

Pigeons are better spies.
(Photo by
Rorhof via NG)
Not all spies are Jason Bourne or Ethan Hunt. Some have fur, and others have feathers. But which is better? "Amid the high stakes and desperation of the Cold War, the U.S. Central Intelligence Agency faced a perpetual espionage challenge: access," writes Christian Elliott of National Geographic. "How do you get a spy inside the secure inner sanctum of a foreign head of state. . . .You send in a feline spy. The CIA called the operation 'Acoustic Kitty.'" Spying kitties didn't share the CIA's agenda. "To find a more promising animal secret agent candidate, the CIA needed look no further than Acoustic Kitty's natural enemy: birds. Specifically, the humble pigeon." 

Human actors might learn a trick or two from this smart, charismatic group.
(Anheuser-Busch photo, AP via The Wall Street Journal)
The Super Bowl might be over, but this herd still deserves applause for elegance, a spot-on performance, and getting beer delivered to a small town in need. It's the famous Budweiser Clydesdale horses. "Less known is their reputation as perhaps the most consummate professionals on the advertising circuit," reports Katie Deighton of The Wall Street Journal. "Industry veterans who shoot commercials consider working with the horses a career pinnacle, like a movie director who finally gets to direct Meryl Streep." 

Tuesday, February 20, 2024

Half of rural hospitals lose money; consultancy estimates 418 could close, citing Medicare Advantage as big issue

Map by Chartis Center for Rural Health, labeled by The Rural Blog

Rural hospitals are in more trouble than ever, and 418 of them are “vulnerable to closure,” according to a study of their finances by Chartis, a Chicago-based health-care consultancy that specializes in tracking the business of rural health. (Here's its list of top 100 rural and community hospitals.)

The Chartis Center for Rural Health says rural hospitals are entering "a startling new phase of this crisis as rural hospitals fall deeper into the red, 'care deserts' widen throughout rural communities, and the increasing penetration of Medicare Advantage could further disrupt rural hospital revenue."

The top warning signal cited in the study is that half of rural hospitals are losing money, up from 43 percent a year ago. That news is especially bad for independent rural hospitals, 55% of which are in the red, while only 42% of rural hospitals affiliated with groups are operating at a loss. "Nearly 60% of rural hospitals are now affiliated with a health system," Chartis reports.

Most people on Medicare now have Medicare Advantage, private insurance plans that get lump sums from Medicare to cover members and look for ways to attract customers while limiting claims. "Medicare Advantage now accounts for 35% of all Medicare-eligible patients in rural communities," Chartis reports, saying Advantage plans' share of rural residents has risen 48% since 2019. 

Chartis map, labeled by The Rural Blog; click to enlarge
That's a problem for rural hospitals designated as "critical access" because Medicare Advantage plans' net reimbursement to such hospitals "is often lower for similar services than that of traditional Medicare because Medicare Advantage does not follow cost-based reimbursement" as traditional Medicare does for such hospitals, Chartis reports. Insurance companies negotiate those rates with hospitals, and in many rural areas, hospitals are at a negotiating disadvantage because few insurers operate in their service areas.

Also, "Medicare Advantage may not cover all the services traditional Medicare does, including swing beds, which provide skilled nursing care for patients and are often a strong source of revenue stability for rural hospitals," Chartis notes. "Rural providers may not be equipped to efficiently navigate administrative requirements for payment introduced by Medicare Advantage, such as prior authorizations, which can lead to increased denials."

Since 2010, "167 rural hospitals have either closed or converted to a model that excludes inpatient care," Chartis says. The firm says its estimate that 418 are “vulnerable to closure” is based on "a new, expanded statistical analysis" of their finances, gleaned from cost reports they file with Medicare.

Rural sheriff and prosecutor offices in Texas are awarded $125 million to bolster staffing and equipment needs

Map of criminal legal deserts in Texas.
(SMU Dedman School of Law map)

To address law enforcement and prosecutorial staffing and pay shortages, Texas has awarded $125 million to rural offices that need more trained professionals, increased wages and new equipment to serve their communities, reports Carlos Nogueras Ramos of the Texas Tribune. Commenting on the funds, Texas Comptroller Glenn Hegar said, "These rural grant programs will help law enforcement offices across this state get the additional financial tools they need."

The grant was made available to communities with populations less than 300,000, and once offered, "94% of eligible sheriff's offices applied for money. Nearly 86% of eligible prosecutor's officers applied, the comptroller said. The comptroller awarded grants to 224 sheriff's offices and 138 prosecutors' offices," Ramos writes. "Rural law enforcement can apply for the grant again in 2025."

In rural Texas, prosecutors' offices have struggled to compete with metro areas to recruit and retain attorneys. "The money is a start to reverse a long-term decline of prosecutors in rural Texas counties, said Pamela Metzger, executive director at the Southern Methodist University Dedman School of Law," Ramos reports. "Less than one percent of lawyers practiced criminal defense law in rural parts of Texas."

The lack of attorneys means rural defendants wait longer to see a public defender, which can lead to more time sitting in jail. "Metzger said that an individual accused of a crime in a major city typically has a guaranteed public defender representing them in court within a day." She told Ramos, "If you live anywhere else, you'll have to wait 72 hours or maybe a weekend, just because of where you live."

Reeves County, pop. 14, 800, will
continue to face staffing shortfalls.
(Wikipedia map)
For law enforcement offices, the added funds will help but not solve their staffing woes. Michael Lazcano, a chief deputy at Reeves County, said, "Money is one part of the equation. He said that law enforcement agencies, especially rural ones, will continue to grapple with recruitment," Ramos reports.

A 2022 study by the Department of Justice "found that recruiting has been a persisting challenge for sheriff’s offices. The number of full-time, sworn officers — 174,000 — has not increased since 1997."

Rural Mainstreet economy reports negative growth for the sixth month in a row

Economic challenges have led to below growth neutral
survey results. (Photo by L. Pound, The Packer)
Last summer, the Rural Mainstreet Index showed good economic growth. But after June 2023's high point of 56.9 on the 100-point scale, the survey's 10-state region reported continued decreases, with September marking the first month below growth neutral at 49.5 -- the term used for a "neutral" growth score of 50. The downward trend has continued over the past six months," reports The Packer, which covers the fresh produce industry. 

Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University issued a press release explaining the challenges facing farming and energy-dependent regions, saying: "Higher interest rates, weaker agriculture commodity prices and a credit squeeze are having a significant and negative impact on Rural Mainstreet businesses and Rural Mainstreet farmers."

"Almost three-fourths of bank CEOs named low farm-commodity prices as the biggest risk for farms in 2024," the release said, "And approximately 44% of bankers indicated that the financial positions of farmers in their area had weakened over the past six months."

Gross told The Packer: "This is the eighth time in the past nine months that the index has fallen below growth neutral. Higher borrowing costs, tighter credit conditions and weaker grain prices are having a negative impact on the purchases of farm equipment."

About RHI methodology: Each month, community bank presidents and CEOs in non-metro regions of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed on their unique economic conditions and projected outlook. The survey offers the most current real-time analysis of the U.S. rural economy, which gleans its data from about 200 rural communities with an average population of 1,300.

A plan to restore and protect the Mississippi River is getting another chance in Congress

The Mississippi River basin, its major tributaries and the hypoxic "dead zone" in the Gulf of Mexico. (EPA map via WJS)

After centuries as a mighty force, the Mississippi River needs planned protection to keep it viable. "Democratic Sen. Tammy Baldwin of Wisconsin announced that she plans to introduce the Mississippi River Restoration and Resilience Initiative in the Senate. Democratic Rep. Betty McCollum of Minnesota will bring the same bill forward in the House," writes Report for America correspondent Madeline Heim for the Milwaukee Journal Sentinel. The proposal is "modeled after programs that protect other major bodies of waters across the U.S., like the successful Great Lakes Restoration Initiative and the Chesapeake Bay Program."

Over the past two decades, Mississippi waters have included record highs and lows as drought and flooding have taken a toll. Despite the river's environmental traumas, it remains a vital part of U.S. infrastructure. "Millions of Americans rely on it for drinking water, commerce and recreation, and its floodplains provide food and habitat for hundreds of fish and wildlife species," Heim writes. "But it's facing a multitude of challenges, from extreme weather to habitat loss to persistent agricultural and industrial pollution. That pollution contributes to the Gulf of Mexico's dead zone, which last year was almost as big as Yellowstone Park."

Heim reports, "Even in the past few years, the river has experienced the impacts of a changing climate, said Kelly McGinnis, the Mississippi River Network executive director. Last spring, communities along the upper river saw near-record floodwaters, book-ended by severe droughts that slowed shipping traffic to a crawl."

The Mississippi River's restoration plan would be housed within the Environmental Protection Agency, but input and problem-solving data from the 10 states the river touches would be used. Program funding "would fall into four main buckets," Heim explains. "Those include improving water quality, restoring habitats, reducing the presence of invasive species and creating natural infrastructure to protect against flood damage."

Beyond the four focus points, the program includes a "science plan," which "would create three regional hubs at universities in the 10 border states for research on the river's challenges," Heim reports. While the Mississippi plan is based on the success of The Great Lakes Initiative, it faces a far more partisan Congress for passage. "Baldwin said that she plans to have discussions with senators from across the aisle whose states border the river and that she believes bipartisan support is possible. . . . Its supporters believe that its reintroduction will help remind people of the threats the river faces."

In a surprising move, giant publisher Penguin Random House is actively fighting book bans

A wall of banned Penguin Random House books.
(Photo by Nate Langston Palmer, WSJ)
When it comes to fighting book bans, book publishers have hugged the sidelines and quietly funded industry groups that champion First Amendment rights. But for one publishing giant, stepping into the book boxing ring has meant standing up for free speech and its authors, reports Jeffrey A. Trachtenberg of The Wall Street Journal. Penguin Random House "now fully embraces the fight against book bans, entering a sensitive debate that is playing out in school boards and statehouses across the country. At risk: potentially alienating a large chunk of customers on an issue at the crux of culture wars that have polarized the nation in ways not seen in decades."

Those who push for book bans often "believe they are targeting titles that are pornographic or otherwise inappropriate for young people," Trachtenberg writes. "The publisher's stance is that teachers, librarians and school administrators, as expert educators, already make decisions about what is appropriate for young readers, and should be left to do their jobs. . . . Despite the risks, Penguin Random House's leadership said that failing to act had moral and financial costs."

To that end, Penguin Random House has used its media might to resist bans, educate consumers and share "censored" content. "Penguin Random House has started hosting anti-book-banning events, giving away several thousand copies of its most-frequently banned titles," Trachtenberg reports. "School boards and school districts removed more than 1,500 book titles from an assortment of publishers from public school classrooms and libraries in the 12 months through June 2023, according to a recent study by PEN America, a literary and free-speech organization that has been vocal in opposing bans."

Trachtenberg reports, "When Dan Novack, Penguin Random House's associate general counsel, learned the law firm Ballard Spahr was working on a book-banning lawsuit against Escambia County School District in Florida with PEN America, he called an attorney there and asked, 'Can we get in? . . . In an early victory, a federal judge ruled the plaintiffs in the Florida case can pursue their lawsuit on First Amendment grounds."

Taking a hard line against book bans has opened Penguin Random House to deeper probes by media and well-funded book ban advocates. Despite the added scrutiny, the company's leadership feels their position supports educators. Penguin Random House CEO Nihar Malaviya told Trachtenberg: "There is always the potential for people to misinterpret our actions. We aren't pushing anything on anyone. We're supporting the experts who make decisions about books."