Purdue Agriculture Briefs

October 1999 Lenders tell Purdue what they see down on the farm WEST LAFAYETTE, Ind. – Two years of low crop prices have caused lenders to focus on the finances of the farms in their portfolios, and prospects are mixed. "Most farmers have seen an erosion of their financial position," says Chris Hurt, a Purdue University agricultural economist. "And while some will have no financial difficulties, some are being pushed beyond their financial limits." Those who face the most hardship share several characteristics. "Farmers who raise hogs, have large amounts of debt, and were hit by the drought are the ones who will post a loss this season," Hurt says. Hurt asked 43 agricultural lenders to answer broad questions about financial difficulties their clients may be facing. "The lenders who did respond thought 47 percent of their clients would have cash flow problems in the next year, and more than half would lose some net worth. They thought 7 percent were at risk of losing the farm operation," Hurt says. "On a positive note, they expected that 26 percent would have no financial difficulties." As far as who's in trouble, the bankers indicated that hog farmers, those with medium-size crop operations or younger operators may be facing the most difficulty. The top three reasons, as reported by the bankers, were low prices, weak marketing skills and low yields. As for what farmers might do about their financial straits, bankers said they thought farmers would first seek off-farm jobs, reduce inputs, sell excess assets and negotiate lower cash rents. Next on the list were improve marketing skills, quit farming, improve financial management and sell land. Hurt says bankers perceive a decline in farm financial well-being, with about 1 farmer in 20 facing grave financial problems. "Lenders said they will be looking for detailed plans from those farmers on how they expect to meet expenses or how they plan to exit the business," Hurt says. He says he expects medium-sized farms to be affected more than their colleagues on either side: "Larger farms have more of a cushion, they can spread their costs over more acres. The smaller farms already subsidize their operations with off-farm jobs. The concern is over the middle-sized farm that has the same level of fixed costs and family expenses, but fewer bushels of corn and beans to cover it." And the root cause of the problem remains the same – the lowest crop prices in 25 years because of large global crop production and weakened export demand. "Adjusted for inflation, soybean prices have hit their lowest since we started measuring," Hurt says. CONTACT: Hurt, (765) 494-4273, hurt@agecon.purdue.edu Curious corn problem puzzles Purdue experts WEST LAFAYETTE, Ind. – Purdue University corn specialist Bob Nielsen have been getting a rash of reports about an odd grain-filling problem that he and Purdue Plant and Pest Diagnostic Laboratory director Peggy Sellers are calling translucent kernel syndrome. "The initial symptoms of this oddity are the appearance of plump, translucent, liquid-filled kernels scattered randomly among already-dented kernels throughout an otherwise normal-looking ear," Nielsen says. "The abnormal kernels subsequently shrivel dramatically as the kernel matures, resulting in a shriveled kernel appearance not unlike mature sweet corn kernels." Nielsen and Sellers say that as many as half an ear's kernels can be affected by the oddity. But they add that the number of plants affected in a field is more difficult to determine. Usually when the syndrome is seen in one ear, it is found throughout a field. So far this year, the phenomenon has been reported mainly in northwest Indiana. "Initially, there appeared to be a common planting date link of the first week of May," Nielsen says, "but subsequent reports have indicated a wider range of planting dates. There is some evidence of a common corn inbred link, but we are still investigating that detail." Beyond those, there are few other common threads that connect the reports. Nielsen says it's tempting to conclude at first glance that these kernels have aborted due to excessive heat or drought conditions that occurred shortly after pollination. And he points out that, in fact, typical kernel abortion symptoms are showing up in fields throughout Indiana this year. "However," he says, "the pattern of typical kernel abortion usually involves those kernels at the tip end of the cob and rarely includes a random scattering of aborted kernels throughout the ear." He also says that kernel abortion typically happens during the blister and early milk stages – not grain fill – and usually results in very small, shriveled kernels. Nielsen and Sellers say that ears they've seen have not exhibited significant kernel abortion at the ear tips. Additionally, the shriveled kernels are nearly full size, not the usual small, aborted size, and the cobs are normal in size and do not show any other stress symptoms. Plants in the affected fields also appear normal. Another initial reaction to the random pattern of affected kernels is to blame Fusarium infection, Nielsen and Sellers say. But tests done by Purdue's Plant and Pest Diagnostic lab have shown Fusarium in some – but not all – of the symptomatic kernels. Sellers and her colleague in the lab, Gail Ruhl, say that these results indicate that Fusarium likely is not the main cause of the translucent kernels. CONTACTS: Nielsen, (765) 494-4802, rnielsen@purdue.edu; Sellars and Ruhl, (765) 494-7071 Super size is not a super deal, economists' study finds WEST LAFAYETTE, Ind. – Consumers who buy "economy-size" packages thinking that they are saving money may be in for a rude awakening. A Purdue University study has found that consumers are so convinced that larger sizes mean cheaper prices that they don't bother to compare the per-ounce prices. Certain products at the grocery store prey on this inattention by charging more per ounce – sometimes as much as twice as much per ounce – for the larger sizes. Economists call this practice "surcharging." James Binkley, professor of agricultural economics at Purdue, says that surcharging happens frequently in grocery stores. "We don't really know how many products have a surcharge," Binkley says. "It happens with flour, and I've seen it with toilet paper, canned chili, peanut butter and tomato products such as ketchup." Binkley, together with John Bejnarowicz, a former graduate student at Purdue, studied surcharging in tuna because surveys have consistently found that it has surcharges on larger sizes. For example, two six-ounce cans of tuna are usually cheaper than one 12-ounce can. "This isn't just a slight difference either," Binkley says. "Often the larger sizes are 20 percent more per ounce. There are even reports of times when the surcharge is a full 50 percent to 100 percent. The study used sales information from 54 wholesale grocery regions in the United States. It compared sales volume and prices of cans of tuna, along with consumer demographics, to determine why consumers buy larger sizes even when they are more expensive. The results indicated that many consumers who buy the large sizes have a mistaken belief that these sizes are always cheaper per ounce and don't bother to examine the prices. The study found that people with higher incomes were more likely to fall victim to the surcharging gambit. "These people have high time demands, and they are less likely to take the time to closely examine the prices. They just grab something and go," Binkley says. He says it's hard to find out how surcharges arise. "The grocery store retailers claim that it's the manufacturers' pricing, and I think they're probably right," he says. "But it's hard to get a straight answer on this. I've called tuna companies several times and asked about surcharging, but they almost never call me back." CONTACTS: Binkley, (765) 494-4261, binkley@agecon.purdue.edu; Bejnarowicz, (847) 267-4880, jbejnarowicz@acnielsen.com Check home air quality for dangerous gas WEST LAFAYETTE, Ind. – As the cold weather sets in, you welcome the warmth of your furnace or gas-log fireplace, but they may also bring a silent, invisible killer into your home. Carbon monoxide, a byproduct of improper combustion of some fuels, has been associated with the death of more than 200 people in this country each year. The poisonous gas also sends nearly 10,000 people to hospital emergency rooms annually for treatment. Household appliances that burn natural or LP gas, kerosene, oil, coal, or wood can produce carbon monoxide as a byproduct, according to Cathy Burwell, Purdue University Extension Service specialist in water quality and environment in the School of Consumer and Family Sciences. The odorless, colorless gas can be produced by furnaces, stoves, fireplaces, clothes dryers and some space heaters. "Carbon monoxide poisoning is especially hazardous, because its initial symptoms can be likened to those of the flu," Burwell says. "Many people have no idea that their headaches, fatigue and nausea may be a result of carbon monoxide poisoning." Other symptoms associated with carbon monoxide poisoning include shortness of breath and dizziness. She says exposure to high levels of carbon monoxide can cause death. Burwell suggests that a qualified technician inspect the heating equipment, including the unit, chimney, flues and vents, each year. Part of the inspection should include a check for adequate ventilation to appliances. "A supply of fresh air is important so that pollutants from the combustion process are carried away," she says. This is not a do-it-yourself job, Burwell says. She says air quality inspections can be done by certified heating and air conditioning technicians as well as by some gas utility inspectors. As an added protection throughout the year, homeowners may want to invest in a carbon monoxide detector. These detectors, similar to smoke detectors, make a loud noise when carbon monoxide is present. She says carbon monoxide detectors should meet current Underwriters Laboratories standards and are available at most hardware stores. Prices range from $20 to $50. The higher-priced models include a readout that displays the level of gas present. CONTACT: Burwell, (765) 494-8252, cathy@poseidon.ces.purdue.edu Compiled by Chris Sigurdson, (765) 494-8415, sig@ecn.purdue.edu Purdue News Service: (765) 494-2096; purduenews@purdue.edu To the Purdue News and Photos Page