National News

A hard look at corn economics — and world hunger

Marketplace - American Public Media - Mon, 2014-10-06 12:05

The corn harvest is coming in, and great weather has produced a record crop. This is terrible news for farmers: Oversupply means cratering prices.

If that sounds like a paradox, consider this: Corn, the biggest crop in our agricultural powerhouse of a nation, is not a foodstuff. It’s a highly refined industrial material—more like aluminum than apples. And a hard look at corn economics puts world hunger in a different light. 

Let's start at an ethanol plant: Lincolnway Energy, in Nevada, Iowa. CEO and President Erik Hakmiller is our guide.

The plant includes several big buildings, lots of loud noises... and some unexpected smells. One is hard to place at first. "What you smell is residual carbon dioxide, and a cooking— very much like a bakery smell," says Hakmiller.

Then Hakmiller opens the door to a giant building with a corrugated metal roof.  

It’s a barn. Inside are these golden mountains—piled-up flakes of grain.

Mountains of grain at Lincolnway Energy in Nevada, Iowa, from Dan Weissmann on Vimeo.

For every bushel of corn that comes to Lincolnway Energy, only a third comes out as ethanol. Another third comes out as carbon dioxide, which goes into soda pop.

The rest—the fat, fiber and protein—ends up on one of these piles. "Each pile being about a thousand tons," says Hakmiller.

That’s one day’s worth of this stuff, called distillers grains.

"It’s good food for cows, chickens and pigs," Hakmiller says. Just as important, it’s cheap.

"For animal feeding, you feed the lowest cost to get the most growth out of the animal," he says. "So, everything has to price itself into the ration. Because a cow doesn’t say, ‘I’m eating Italian tonight.’ He’s got to eat whatever he gets fed."

If he’s in a feedlot—where most cows gain half their body weight—he’s probably eating corn, either distillers grains or the whole kernel.

And we are not. We wouldn’t recognize it.

Chris Edgington has been growing corn for decades. Here’s what his corn isn’t: "It is not the corn you eat off the cob," he says. "It is not what’s in the can. It is not what’s in the freezer, in the bag. It is not that product."

That product, sweet corn, is a different crop. And a lot smaller. Last year, for every pound of sweet corn, U.S. farmers grew more than 260 pounds of field corn.

Sweet corn-- the stuff on the cob-- is not the corn that's grown on 90 million acres. | Create Infographics

Which goes to farm animals. If you are what you eat, they are, more than anything else, corn.

So, when we eat a ham-and-cheese omelette, that’s mostly corn.

"It’s a very small component of other foods," says Joseph Glauber, chief economist of the United States Department of Agriculture. "People talk about high-fructose corn syrup, but..."

Want to guess how much of the corn crop goes to corn syrup?

Three-and-a-half percent. A little less than that goes to other sugars, plus alcohol for vodka.

Actual corn-type food—Doritos, Jiffy cornbread mix, cornflakes—represents 1.5 percent of the corn crop.

For stuff we eat and drink, that’s about it.

Other than as a low-cost ration for animals, the big use for corn is ethanol.

Ethanol has been booming since 2000; there’s eight times as much now.

That’s been great for corn farmers because they have so much corn to get rid of.  

"The joke in farm country has always been, if you give a farmer a market, he’ll overproduce it," says Monte Shaw, executive director of the Iowa Renewable Fuels Association, the state’s ethanol lobby. "And quite frankly, for over 200 years, that’s been pretty true, except for these last eight years, when ethanol sucked up all that extra corn production."

Extra production is not one year’s bumper crop, and it is not just the extra acres that got planted after the ethanol boom.

It’s a long-term constant. Productivity—the yield from one acre of cornfield—has been ratcheting up for decades and decades.

Even in 2012—a terrible drought year, with the worst yields in more than 15 years—productivity was more than twice as high as any year before 1960.

Which puts the whole food-versus-fuel question in a new light.

We plant more than 90 million acres of corn, and it’s in huge surplus. And it’s not even food. What if we planted actual food instead?

I put that question to Bruce Babcock, an economics professor at Iowa State University who studies corn, ethanol and renewable fuels.

"Our ability to supply the world with vegetables is practically unlimited," Babcock said.

Take corn, and add in other giant crops that basically just feed animals—crops like soybeans, barley, hay, sorghum—and two-thirds of U.S. farmland goes to animal feed.

"Such a small portion of our land goes to grow actual food that people consume," said Babcock, "that if we really wanted to increase that supply, it would be pretty easy."

The trick would be convincing the country—and other countries that import animal feed from the U.S.—to go vegan.

"There would be such a surplus of farmland to grow kumquats and pecans that we would be awash in those, in a heartbeat," says Babcock.

Would it be enough to feed the 10 billion people the United Nations projects as global population by 2100

"We would have more land available for the 10 billion than they would know what to do with," says Babcock.  

But we don’t. Thank markets.

"That’s not what consumers want," says Babcock. "As they get more money, they want to eat meat."

So farmers plant corn.

Is it time for orchestras to change their tune?

Marketplace - American Public Media - Mon, 2014-10-06 12:05

Members of the Atlanta Symphony Orchestra remain locked out in a labor dispute, unable to reach an agreement with management for the second time in two years. Both sides have now agreed to talk through a federal mediator. 

But what's happening isn't unique to Atlanta. Orchestras in Indianapolis, Philadelphia, Louisville and Nashville have also faced contract and budget issues. 

So why does this keep happening?

Tom Smith, an economist at Emory University's Goizueta Business School, says to think of an orchestra player like a professional athlete.

"You have these uniquely talented people, and they deserve more money," he says.  

Smith says just like sports teams, orchestras depend in part on ticket sales to pay their players. But whereas pro sports teams usually have packed stadiums, orchestras are struggling because of aging audiences and lagging box office sales.

So that's the problem, right?

Well, sure, says Smith, but it's more complicated than that.

"A team like the Chicago Bulls or the Atlanta Hawks or whomever else—maybe 35 percent of their revenue comes from ticket sales," he says. "So just filling the seats doesn't help the Hawks pay for their salaries on their players."

Smith says orchestras suffer from something called "cost disease."

Think of a string quartet: To be a quartet, there always need to be four players, and it takes them the same amount of time to play a piece today as it did 100 years ago.

But the costs associated with that performance—paying the players, renting a venue, promotion—increase over time.

That's cost disease: Expenses go up, but they're not offset by more accuracy or efficiency.

"Most people who work in the performing arts expect their pay to increase roughly at the same rate as pay in the rest of the economy," says Robert Flanagan, a professor at Stanford University and author of "The Perilous Life of Symphony Orchestras: Artistic Triumphs and Economic Challenges."

"But unlike the rest of the economy," he says, "the labor requirements for putting on a performance don't change."

To a lesser extent, sports teams suffer from the same economic affliction. It still takes 10 people to play a basketball game that's four quarters long. But sports teams have billion-dollar broadcasting deals, stadium naming rights and merchandise sales to round out their budgets. Orchestras don't have that luxury, so they have to rely on corporate donations, large individual gifts and endowments.

Flanagan says this is where declining demand comes into play: fewer large donors.

"Most of that declining demand is also people who had previously contributed to the support of orchestras," he says.

But Emory's Tom Smith says even when big donations do come in, they often come with a catch.

"People aren't usually going to just give you money and say, 'Oh, here's a million dollars and go ahead, use it to pay the salary of your violin players,'" he says. "They're going to say, 'I want a building, and I want a building with my name on it.'"

And that has led to the downsizing of orchestras, including Atlanta's.

Two years ago, the players agreed to salary cuts and the elimination of seven positions.

But cuts come with their own consequences, as the best musicians will leave for spots at bigger orchestras that haven't had to make the same cuts. So what's a struggling orchestra to do?

Symphony consultant Darrell Edwards says today's orchestras may need to diversify their music, opting for more of a mix of popular music and symphony classics.

"The orchestras that are doing well are doing both," he says. "And it's not to take away from the importance of orchestras playing the master works, because that's how they really grow artistically. You're not going to get better as an orchestra playing pops concerts."

Which leaves orchestra directors in a tricky spot. Do they play the score from "Star Wars" for the umpteenth time to bring in people, or play something new that might not appeal to a wide audience?

Edwards says it's a decision many directors may be reluctant to make. 

Firestone Did What Governments Have Not: Stopped Ebola In Its Tracks

NPR News - Mon, 2014-10-06 12:03

There's a company town in Liberia with 80,000 residents. Ebola was first detected in March. Firestone's resourceful response has kept the virus from spreading.

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NBA strikes a streaming deal with ESPN

Marketplace - American Public Media - Mon, 2014-10-06 11:45

The NBA announced a new deal with TV networks today that gives us a glimpse into what one aspect of the future of TV might be like. 

The deal, which kicks in two years from now, gives TNT, ABC and ESPN the rights to broadcast professional basketball games through 2025, and one part of that deal will allow ESPN to stream some games online to customers regardless of whether they have a pay-television subscription, allowing the channel to have a much more direct relationship with viewers.

But don’t rush to cut that cable cord just yet. ESPN’s move is a baby step, and we don’t really know yet in what direction.  

“What ESPN doesn’t want to do is compete with itself,” says Peter Kafka, a senior editor for Re/Code who covers media and technology. Kafka says ESPN is likely only going to offer live streams to basketball games that are not going to be broadcast on one of its channels. 

“What you're not going to be able to do is watch a full suite of NBA games without getting ESPN,” says Kafka. 

That’s because ESPN’s cable channels are its cash cow. The network gets about $6 per pay-TV customer, more than any other channel. 

At a Re/Code conference last month, ESPN’s CEO John Skipper signaled this latest move is a part of the company’s future, but would not replace its present business model, which relies on pay-TV subscriptions. 

“We have two big revenue streams: payments from distributors, advertising. We think about, are there sports events we can offer that the consumer will pay us directly?” Skipper said, adding that the live-streaming services he envisions would be a third revenue stream, but would offer content that’s different than what’s on the TV channels. 

“It is incumbent on the NBA and on ESPN to reach audiences that are attractive to advertisers,” says Rebecca Lieb, a media analyst at Altimeter Group. 

Lieb says among the most attractive and hard-to-reach audience for advertisers is the 18-to-33-year-old male demographic, which is increasingly cutting the cable cord. And yet, if this audience tries to live stream a sports game today, it would have to have a cable TV plan. 

“What I see in this deal is the beginning of a kind of uncoupling of that," Lieb says, predicting that other pay TV networks, such as HBO and Showtime, may also take steps away from a cable-only approach. 

Mexican President Says He's 'Indignant' Over Case Of Missing Students

NPR News - Mon, 2014-10-06 11:35

Over the weekend, police found the mass graves that are thought to contain the bodies of some of the students.

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Five ways a web series can make money

Marketplace - American Public Media - Mon, 2014-10-06 11:19

The web series "Frankenstein, MD" recasts Mary Shelley's titular doctor as "Vicky," fresh out of med school and vlogging with her assistant "Iggy," who only moans "yes, master" sarcastically. The show is born out of a partnership between PBS Digital Studios and Pemberley Digital, which made a name for itself with similar adaptations of Jane Austen novels.

Bernie Su developed "The Lizzie Bennet Diaries" and "Emma Approved" — webcam updates on "Pride and Prejudice" and "Emma" respectively — and now "Frankenstein, MD." He says telling stories in four-to-five-minute increments "speaks to our modern culture."

“People want to just get in and get out, get in and get out,” says Su. “What’s challenging for that format for us is when you’re talking about a long story, like a grand narrative.”

But Pemberley Digital’s challenge is even bigger than that. The studio doesn't only update classic literature broken up into YouTube-able chunks, it creates shows with an eye toward building franchises and making real money, which isn't something all web-series creators can say.

Here are five ways Pemberley has turned its web series into a business, starting with "The Lizzie Bennet Diaries."

YouTube Ads

YouTube's partnership program allows Pemberley and other users to get a cut from ads shown before their videos.

Merchandise

The world of Lizzie Bennet and William Darcy has not only expanded to spinoff videos, but pins, a mug, posters and more.

Affiliate marketing

Similar to the YouTube ad program, if Su's company links to another website and that site makes a sale, Pemberley gets a piece.

DVDs

You can still stream "The Lizzie Bennet Diaries," but Pemberly has also put the series out on home video.

"We’ve sold, I believe now, 7,000 units," Su says. "Again, for a show that is available for free online, which is amazing.”

Book deal

Simon & Schuster published a novelization called "The Secret Diary of Lizzie Bennet," which retells the series as journal entries. For those keeping score at home, Su says, "Lizzie Bennet is now "a book based on the web series, which is based on a book.”  

On China's Mainland, A Less Charitable Take On Hong Kong's Protests

NPR News - Mon, 2014-10-06 10:31

The pro-democracy protests in Hong Kong largely have been peaceful, but many mainland Chinese see the demonstrators as spoiled troublemakers who are asking for too much, too soon.

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Hewlett-Packard splits

Marketplace - American Public Media - Mon, 2014-10-06 10:08

Hewlett-Packard is splitting in two, the company confirmed this morning.  The printing and computer side of the business will go in one direction, and in the other direction will go... everything else, under the name HP Enterprise. 

Hewlett-Packard Enterprise is a software and services business. It does advanced analytics, enterprise development and a number of other consulting services. 

The computer printer side is still grappling with the age of the tablet and smartphone, which hit the computer sector hard.

“Not only were consumers purchasing fewer desktops and laptops where HP was strong,” says Ross Rubin, principal analyst with Reticle Research, “but on the smartphones and tablets consumers were doing less printing because tablets can be taken with you and you can view the documents on the tablet itself instead of having to print it.”

The printer and computer side has stabilized over the past few years, and paid down some of its debt. Even so, the Enterprise group had higher margins, says Rubin.

“HP is splitting because there are two different directions and two segments of the business,” he says. “They have different market dynamics, different margin structures, different distribution systems.” HP Inc. (the computer-printer people) has a much bigger consumer-facing marketing component, whereas the Enterprise group is more consulting- and services-focused. 

Generally speaking, “independent companies can pursue what’s best for them rather than what a board of directors looking at various subsidiaries would be doing, and Wall Street tends to value that highly,” says Bill Caffee, a securities lawyer with White Summers Caffee and James. 

Investors who might’ve liked one side of HP but not the other will be free to invest in just the side they want, another reason why splitting can help valuations. Consumers won’t see much difference; computers and printers will keep the high-powered HP brand.  

From GIs To Gen Z (Or Is It iGen?): How Generations Get Nicknames

NPR News - Mon, 2014-10-06 09:02

Baby boomers, Generation X, millennials — every generation has a name. But where do these names come from, who chooses them, and why do we need them?

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Why Ebola Patients Are Getting Treatment In Nebraska

NPR News - Mon, 2014-10-06 08:40

The Nebraska Medical Center is the largest of four high-level biocontainment patient care units in the U.S.

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Ebola is scaring people away from ERs

Marketplace - American Public Media - Mon, 2014-10-06 08:33

During the past few days, there has been no wait at Texas Health Presbyterian’s emergency room in Dallas. Usually, it takes about 45 minutes to see a doctor. But a week after a patient confirmed to have Ebola came through the ER, it’s not the most popular place.

“If I lived in Dallas and became ill, I would head straight for the Texas Health ER knowing that the waiting lines are so short,” Dr. Albert Wu says. Wu is professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health.  “I would bet that Texas Health is a safer hospital,” Wu says, “and their ED is safer than the other hospitals they would otherwise compete with.”

Wu says even if fear about catching Ebola is not always rational, the panic will have a short-term effect on business. “Emergency departments are certainly one of the main routes to getting hospital admissions," Wu says. "So for almost every big hospital, the emergency room is a crucial way to get patients.”

There are more than 80,000 visits to the ER at Texas Health Presbyterian each year. On average, an ER visit brings in anywhere from $150 to $1,000 in revenue, according to Dr. Angelo Falcone. That might not sound like a lot, but Falcone says if you multiply that by the number of patients that are not coming, it “dramatically affects both the hospital's and the group's bottom line.”

Falcone is CEO of Medical Emergency Professionals, which staffs emergency departments in Maryland and Connecticut. He says the real financial loss isn’t from not treating a broken arm or prescribing pills. It’s from not admitting a patient. Nearly half of hospital patients come through the ER. When you lose one of those customers, Falcone says it could be a loss of tens of thousands of dollars in revenue. Falcone says patients probably won’t avoid the hospital permanently, and fluctuations in patient numbers come with the territory. “It’s the nature of the beast,” he says. “In emergency medicine, you’ll have some days where all of a sudden all the patients show up and other days where it’s not quite as crazy.”

In the long run, Alex Wu at Johns Hopkins says Texas Health Presbyterian could actually benefit. “I’m not sure they’re going to make their reputation on ‘We do the best job curing Ebola cases, send them to us!’ but they are getting their name mentioned and that might not be a terrible thing,” he says.

Right now, we just have the hospital’s symptoms; the prognosis is uncertain.

NPR Chief Announces Departure Of Key Digital Strategist

NPR News - Mon, 2014-10-06 08:32

CEO Jarl Mohn announced Monday that Kinsey Wilson is leaving the network. Wilson, whose exit follows the departure of several other NPR executives, is seen as a leader on the digital front.

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The numbers for October 6, 2014

Marketplace - American Public Media - Mon, 2014-10-06 08:16

The crowd of protesters in Hong Kong reached 80,000 this weekend, organizers said. The pro-democracy movement and the government were still at a standoff on Monday morning, after Chief Executive Leung Chun-ying said he would "take all necessary actions to restore social order." The crackdown didn't materialize and protesters cleared a small path to the government headquarters as their ranks thinned. Quartz reported that neither side seems to have a clear plan.

Here are the stories we're reading, and other numbers we're watching, Monday.

55,000

That's the number of jobs HP says it will cut—5,000 more than expected—the New York Times reported. The bump comes amid the news that HP will split into two companies, one focused on business technology and the other focused on consumer hardware. 

$290

Bitcoin's value fell nearly 20 percent over the weekend to $290, the BBC reported. It's the sharpest drop yet in a steady decline for the online currency, which was worth more than $1,000 late last year. 

$6 billion

Meanwhile, the mobile payment market was roiling with rumors Monday. Square nabbed $150 million at a $6 billion valuation, but the Verge reported new cash might confirm Square is in trouble. Elsewhere in Silicon Valley, Facebook seems to be experimenting with peer-to-peer mobile payment. A few users found the functionality already hidden in the company's Messenger app, TechCrunch reported.

2016

That's when new episodes of David Lynch's cult hit "Twin Peaks" will debut on Showtime, 25 years after its original run. The Screen Wars rage on.

Supreme Court Declines To Take Up Gay-Marriage Appeals

NPR News - Mon, 2014-10-06 07:37

On Monday, on the first day of its new term, the court stunned the legal world, refusing to take any of the appeals pending on lower court rulings allowing gay marriage.

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The FCC takes on illegal jamming

Marketplace - American Public Media - Mon, 2014-10-06 06:00

Last week, the FCC fined Marriott $600,000 for jamming guests’ Wi-Fi signals at one of its hotels. The Marriott Gaylord Opryland in Nashville, Tennessee, was operating software designed to protect networks from threats, but instead used it to disrupt and shut down the Wi-Fi hot spot that guests had set up in one of its conference rooms. Marriott charges up to $1,000 for setting up Wi-Fi hot spots of its own, but doesn’t bar people from using other Wi-Fi systems.

Marriott, for its part, says the hotel acted lawfully and that the FCC is vague about what kinds of jamming are allowed. The FCC seems to have been pretty clear for several years now that pretty much no jamming is permissible. Also, if you think you’re being jammed, they have an online tip line

Here are some of the creative ways people have been using signal jammers to mess with GPS, cellphones and Wi-Fi (and how they got busted for it).

1. If I can't talk to anyone on the bus, nobody will!

This guy used a jammer to keep people from chatting on the bus.  

2. Putting the "mute" in commute

A Florida man didn’t want people talking or texting while driving. So he put a jammer in his car to disrupt the phones of everyone who drove around him as he commuted to work each day. Unfortunately, he was also interfering with 911 signals. And people who were lawfully using a headset.  

3. Welcome to the People's Republic of Workistan

Employers seem to love jamming their employees' phones. Steel manufacturing companies do it. So do sewing companies.

4. You're not the boss of me

Employees have used jammers to fight back. This guy’s boss put GPS trackers in his truck to track his whereabouts and lunch breaks, so he got a jammer to disable it. Unfortunately, he also messed with planes landing and taking off at the airport.  

5. Jam tomorrow. Jam yesterday. But never jam today.

In the largest fine of the agency’s history, the FCC said it would assess a $34.9 million penalty against a Chinese signal jammer manufacturer for marketing its products in the U.S. over two years. It’s gone after smaller manufacturers as well, after jammers were found being used in a Texas cosmetology school and another disrupted communications in a sheriff’s office in Florida. As Mitchell Lazarus writes for CommLawBlog:

“Ironically, in both Texas and Florida, it is legal to openly carry firearms into a Starbucks, say. But not a phone jammer. So when the cell phone at the next table erupts into The William Tell Overture and its owner bellows, “HELLO? HEY! YEAH, IN A STARBUCKS! IT’S RAINING HERE! SO WHERE’RE YOU?” pulling out the jammer is not an option. It’s the firearm or nothing. This may not be good public policy.”

Another day, another corporate breakup

Marketplace - American Public Media - Mon, 2014-10-06 03:40

Another day, another corporate breakup. Hewlett-Packard confirmed today it will split into two companies. One will focus on personal computers and printers, and the other will focus, among other things, on the enterprise space of the cloud. It turns out HP is not the only old tech company that's been refocusing in a divergent tech landscape.

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