What lower #corn prices mean to investors, consumers

Corn prices have slumped about 20 percent this year and in a piece I wrote for InvestorPlace, I analyzed what this means for Archer Daniels Midland (NYSE:ADM), Tyson (NYSE:TSN),  Hormel (NYSE:HRL), Dean Foods (NYSE:DF), Domino’s (NYSE:DPZ)  and Papa John’s (NYSE:PZZA).

From the story:

The U.S. is in the midst of one of its best crops in years. There’s so much corn that according to Bloomberg News, stockpiles of the grain are growing at their fastest rate in nine years. The U.S. Department of Agriculture recently raised its forecast for the corn crop to 14.03 billion bushels, an increase from the 13.86 billion bushels forecast in July. The 2013 harvest was 13.93 billion bushels.

The myth of high corporate taxes

 The business press is chock full of verbiage from everyone from Fortune 500 executives to business groups that argue that the U.S. is placed  at a competitive disadvantage by its 35 percent statutory tax rate, which is the highest in the world.   But as I noted in CBS Moneywatch,  University of Southern California law professor Edward Kleinbard demolished this widely held view.   

From the article:

“It is true of course that the federal corporate tax rate — nominally, 35 percent — is too high relative to world norms, and that the ersatz territorial system requires firms to waste money in tax planning and structuring, but effective marginal tax rates and overall effective tax rates reach the level of the U.S. headline rate only when firms studiously ignore the feast of tax planning opportunities laid out before them on the groaning board of corporate tax expenditures,” he wrote in the 32-page paper.

 

 

Throwing cold water on the ALS Ice Water Challenge

  Pete Frates, a 29-year-old former Boston College baseball player who is confined to a wheelchair because amyotrophic lateral sclerosis (ALS), agreed in July to have himself doused with bucket of ice water to raise awareness of his affliction, which also known as Lou Gehrig’s disease.    The ALS  Ice Water Challenge has succeed beyond his wildest dreams attracting 15 million people including everyone from entertainer Justin Timberlake to New Jersey Gov. Chris Christie.   Therein lies the problem.

Though I feel for Frates, whose wife is expecting their first child, and anyone who has been touched by this awful and always-fatal disease, most Americans are never going to meet anyone like him.  According to the ALS Association,  there are at most 30,000 people in the U.S. with the neurodegenerative condition at any given time.      Compared with other diseases that’s pretty small potatoes.   For instance, there are roughly 14 million people with cancer, according to the American Cancer Society.   About 5.2 million people have Alzheimer’s disease and about 1 million have Parkinson’s Disease, including yours truly.

Though the media coverage of ALS Ice Water Challenge talks about the need to raise “awareness” about the disease,  I don’t understand why that’s necessary.    Unlike HIV or Ebola,  ALS isn’t communicable.    Though there is some evidence that ALS has a genetic basis, like Tay-Sachs or Sickle-Cell Anemia,  most cases are “sporadic”, meaning the patient has no family history of the disease.   It seems that the people who need to be aware of ALS are painfully “aware” of it.

Moreover, the $10 million or so that the ALS Society has reportedly raised from the Ice Water Challenge probably won’t make a damn bit of difference in the search for a cure since it costs billions for drug companies to bring new medications to the market.    By the way, the pharmaceutical companies aren’t hiding a cure for ALS or any other awful disease.   These companies are about maximizing profits and shareholder returns if they are publicly traded.   A new wonder drug for Hepatitis C called sofosbuvir costs $90,000 for a 12-week course of treatment.   Imagine what a pharmaceutical company would charge for an effective ALS treatment or — god willing a cure.   It would make sofosbuvir’s costs seem like chump change.

I don’t begrudge the ALS Society their 15 minutes of fame.  Barbara Newhouse,  the non-profit’s CEO, has vowed to invest the Ice Bucket Challenge money “In helping people with ALS and their families and caregivers in the battle against the disease, while resolutely pursuing all avenues to extend, improve and ultimately save lives.” I solute the creativity of ICE Bucket Challenge.   If people are touched by disease, they should donate to the ALS Society, which is rated highly by the watchdog group Charity Navigator.    The publicity surrounding it has received it certainly a godsend.  (Update) The ALS Society is in the black as of its most recent 990 filed today though it had operated in the red during the 2013 fiscal year.

Of course,  I am annoyed that the ALS Ice Bucket Challenge is diverting attention from Parkinson’s disease.  Some may say that people with Parkinson’s and other conditions need to create their own “challenge” to grab the public’s attention.  I understand that argument but it makes me feel kind of sad, as if it I have to make my suffering entertaining to grab the public’s attention.  Even so, that’s easier said than done.

Thanks to the 24-hour news cycle, the public is like kittens playing with a tinfoil ball when they are excited by a fad.  They quickly move onto to something else when they get bored by their toy.  Let’s see how donations to the ALS Society hold up in six months or a year.

(Post has been revised)