• They are not profits. These are gross margins from which all costs of transformation, transportation, packaging, marketing, etc. must be paid. There may or may not be a profit left after all of those are deducted.


• They tend to make discreet shifts and then remain relatively constant. It happened in the late '70s and again in the late '90s. I attribute the shift in the '90s to the Hazard Analysis and Critical Control Point programs and much higher food safety scrutiny. Some would attribute it to consolidation at the packing and retail levels. I don't think that was the major factor but would agree it had an effect, especially over short periods of time.


• Their trend has been flat since 2001. These spreads have been moving sideways during this past period of higher hog prices. The variability of the farm-to-wholesale margin is apparently smaller than in the past, while the variability of the wholesale-to-retail margins appears to be larger. I would attribute the former to more coordination in the producer-packer relationship and the tendency for wholesale and producer level prices to move together better than in the past. The latter is likely due to more competition from other species and higher volatility of those species' prices than in the past.

1. The artifacts are the tangible aspects of culture -- the things we see, but they can be difficult to interpret;


2. The espoused values are the stated aspects of culture. Mission and vision statements are two examples; and


3. The stated values. The underlying assumptions are the reasons behind the stated values. For example, a security guard at a school may be a cultural artifact because it is readily visible. The stated value of the school is that security is important, while the underlying assumption of the school may be that the students aren't trustworthy.

• In 2000, about 1.6 billion gallons of ethanol were produced in the United States, with ethanol utilizing about 6% of the 2000 corn harvest. In 2006, an estimated 5 billion gallons of ethanol were produced, and ethanol accounted for 20% of the 2006 corn harvest. With the current 110 ethanol plants, another 73 plants under construction and eight more facilities expanding, ethanol capacity will reach 11.4 billion gallons/year during 2008-2009.


• For 2006/2007, USDA forecasts the total use of U.S. corn will be equivalent to the production of 85.6 million acres. Yet only 78.6 million acres were planted in 2006. Corn supplies are expected to meet demand because of large carryover stocks of corn, which are projected to be reduced by more than half.


• Looking ahead to the 2007 corn crop, it is quite likely, based on current ethanol plant construction, that corn used in ethanol production will increase by more than 1 billion bushels from the 2.15 billion bushels of the 2006 corn crop expected to be used for ethanol. Use of 1 billion bushels, at a trend yield of 152 bushels/acre, would require an additional 6.5 million acres of corn, if corn consumed in other uses remains unchanged from this year's projected levels.


• A $1/bushel increase in the price of corn would raise the cost of producing hogs by about $6/cwt. With live hogs selling for a U.S. average price of $43/cwt in December 2006, the cost of production increase would be about 10% of the market price.

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