tv Real Money With Ali Velshi Al Jazeera November 27, 2013 7:00pm-7:31pm EST
>> this is al jazeera america live from new york. i'm tony harris with a look at your top stories. vice president joe biden who heads to beijing next week will be discussing the dispute over the islands both china and japan are claiming. china raised tensions over the weekend when it said it was setting up an air defense zone. two workers were killed in a construction accident at a world cup stadium. police say parts of the sa sao paulo stadium that will host of the world cup tournaments next year collapsed.
the launch of an online insurance exchange for small businesses until next november. small businesses can still purchase coverage through other means. and archeologists have discovered the oldest buddhist shrine. researchers have uncovered traces that days back 200 years. it was unearthed in a sacred temple where the buddha is thought to be born. "real money with ali velshi" is next on al jazeera. >> the new year may bring new financial pain to american farms i'll talk to a corn farmer who worries about the lower ethanol production. and how the new wave of a digital company is trying to tap
into you want sometimes before you even know you want it. black friday game plan. a super shopper who has had elaborate plan of attack down pat for months. i'm ali velshi. this is real money. >> this is real money. you are the most important part of the show. join our conversation on twitter at aj real money. it's been a six-year boon for america's corn belt. earlier this month the environmental protection session, the apa, proposed cutting the amount of corn-based ethanol cut into gas that americans fuel up at the pump. this would hurt farmers bottom
line. but farmers may have bigger fish to fry going forward. american corn and grain farmers have benefited from rising food exports, very low interest rates, and the government backed drive to produce biofuels. an unprecedented 100 million acres of farmland are now planted with corn including on land that was once marked for conservations in states like iowa and the dakotas. even though exports are expected to stay strong farmers just harvested their biggest ever corn. it has fallen from $7 a bushel in 2012 to almost half that have now. to be fair corn and grain prices shot up last year in part because of a drought. but drought or not, the downward trend is clear. now nobody is using the word "bust ." but there is a sense that 2014 will be a year of retrenchment
for america's corn belt. many farmers who got in the boon late made themselves go bust. and that will have a ripple affecriprippleeffect on other f. crop insurance programs would help keep prices stable for farmers. but republicans and democrats are at logger heads over food stamps. congress needs to get a new farms bill passed before janua january 31st. if not that is one more headache that farmers will have to deal with. jim is a corn and soybean farmer in manhattan. not the one i'm in, the one in illinois, and he joins us now. thank you for being with us. >> you're welcome. >> what are you expecting to happen. what is this discussion of corn prices going lower mean to you?
>> well, it's a concern because we just, like you were saying, we raised a corn crop, and we need all the markets we can get for our--what we produce. you know, we're at low prices right now. if we lose another--they're talking $0.15 lower. right now we're at low cost to production. we've got a lot of high end put crop. >> when you say below cost production. what is your cost of production for corn? >> well, for me to plant an acre of corn it costs me $550 to $600 before i harvest a crop that i have invested in that acre to raise a crop. >> how do you see a slowdown? is it always prices? do you--do you harvest and sell the statement amount of corner but you get less money for it as prices go down? >> well, yeah, i mean, i do
different things. i've got cash sales and we can do the board of trade and different options. the bottom line, if corn is $4.25 and it costs me $4.50 per bushel to raise t that's a loss. that's a real concern going forward. >> what's your sense of this epa discussion of reducing the amount of ethanol that gets blended into gasoline and the affect it's going to have on people like you. >> well, it's a concern. we have 60-day period that they have their ataking comments. i know there are a lot of people rallying to change that back to where we were at, the 14.4-gallon. so i mean, it sounds worse than it is because i think bottom line when it is all said and done, you know, if it's $0.10 to $0.15 lower on corn, you read that, oh my gosh, it's going to be terrible.
it's not good. we need the demand, but it's not that bad for us. >> does growing demand in emerging parts of the world like china make up for the fact that you might lose some corn to the ethanol subsidies? the ethanol debate? >> well, it will definitely do that. corn is a good value for a lot of countries, and china, one. they're buying a lot of corn. they're refilling up their stock piles so they have corn in their supplies over there. so yeah, i mean, the lower prices are definitely going to help on the exper the export en. >> what are your other costs. crop insurance, fertilizer. >> fertilizer, seed and land, the herbicide that we put on the crops. the big ones that we have. and unfortunately, you know, i mean-- >> go ahead? >> well, i mean one of the
things fertilizer has come down in cost. but our seed costs haven't come down and land hasn't come down. that's a concern. it takes time. we've had good prices like the last four or five years, but prices follow they will up on their input costs. >> jim, good to talk to you. thank you for being with us to give us insight to this. jim is a corn and soybean farmer talking to us from manhattan, illinois. >> dan, good to talk you, you just heard me talking to jim, who sort of, i guess every farmer gets it. they know not just the micro trends but the macro-trends. he was able to address this debate of ethanol, growing demand elsewhere and lowering corn prices. what's the situation from your
perspective? >> i think jim got it, and he understands that price versus come down $3 a bush as your headlines suggested. the problem we have is it's really three-fold about what is going to be hitting the u.s. farmer. ethanol is down because of the blend wall. it's not because we need to produce more, but only because we can only use 10% in our conventional gasoline supply. as americans drive fewer miles, we're consuming 132 billions of unleaded, and that number will decline in future years. we have stimulated the world ino produce more. not only do you have 100 million acres in corn production in the united states, we have 150 million acres globally. brazil became the largest exporter and will be the world's largest soybean producer this year. lastly we're seeing meat
consumption, brazil, india and china, we see decline in currency. as the u.s. dollar strengthens, and tapering happens in qe 3, that trend persists. in the next couple of years we envision corn having a three in front of it, not a four and we could have a calamity with the farm bill because it does not provide the necessary safety net they've had in prior years. >> you mentioned meat production. corn is used for feed. >> that's right. we used about 41% of our corn crop for ethanol, 40% for feed, and the rest go niece biofuels or ending stocks. 2 billion bushels, the largest we've been since 2005. we think they swelled to 3 billion bushels next year. there is no demand trigger outside of china that could happen. even with the chinese there are
570 million chinese farmers. the chinese want to make sure that their farmers are taken care of. they're interested in self-sufficiency. they may allow a few extra corn exports. you. >> dan is president of the ad. resource. thank you, dan. the merger between menials and america airways, the bankruptcy case gave it's approval. with that out of the way. they renamed american airlines group should become the largest airline less than two weeks from now. meet the web maverick who is are shaking up the online shopping biz by giving you
>> the big banks may not be done. standard & poor's estimates including jp morgan chees morgad bank of american may be on the hook. the minute wage and the debate over raising it are back in the spotlight. a proposal of hiking minimum wages to $15 narrowly passed for seatac, washington. a recount is being suggested there. meanwhile, new jersey voters approved a state wage hike earlier this month. and president obama came out in support of recent legislation sponsored by congressional democrats for a new federal
minimum of $10.10 an hour. now the current minimum wage stands at $7.25, that comes out to an annual salary for $15,000 for full time work. that's 4,000 above the poverty line for an individual but well below that for a family. raising that rate to president obama's proposed rate would effect 30 million workers nationwide. 19 states and washington, d.c. have higher rates and starting in 2014 new york and new jersey will as well. one argument in its favor is that it will drive the income scale and in turn should boost spending. that would be good for businesses all around. but our next guest says it will crush small business. bill, good to see you. thank you for being with us.
>> reporter: ali, good to see. >> you how do we square this circle. it's a cuf tough one. you represent businesses that are creator of jobs in this country. and you're saying a higher minimum wage could hurt those businesses, but we know it hurts people to be earning $7.25 an hour. how do we square this? >> the question is what should be the basis for making pay, and among this group that you identified, small businesses keep in mind there are 6 million employer firms in the u.s. and 90% of them employ fewer than 20 people. let's look at the premise of this first. if you raise the price of workers that nothing will happen. that's what the defenders are saying. it doesn't really matter. there is a law of demand, called common sense. my sense is i guess we're not
happy with the 25% unemployment rate amongst our teenagers. we would like to make it higher than that. you can only pay a worker the value that they bring to the firm. >> but how do we determine that value. because across the country we have different minimum wages. clearly people's value is different. how do you determine what the right minimum wage is? >> there isn't a right minimum wage. why are we setting a minimum wage at all? you let people take jobs, negotiate whatever they can earn, and once they start getting on the job training, which the minimum wage denies to the least skilled people, once they get training and experience, they get raises. that's the evidence-- >> but we have more than 10 unemployed people in this country. we would be able to employ them at $2 to $3 an hour. that can't be right for the richest country in the world. >> you're assuming that everybody would go to $3. that's a mistake. there is a competitive market
out there. we pay people more the more value they bring. any worker can bring cal value o the firm. you're alleging if we eliminate the minimum wage everyone will get paid $1. that's nonsense. some people are worth millions and we pay them millions. -- >> but who is worth paying $15,000 when you know that doesn't make them either a consumer or a taxpayer. if you're making $15,000 a year you're probably getting assistance. >> well, you might be if you're head of a family of four, which is the famous model. who can survive--nobody does. let's go through this. most minimum wage workers come from above median income families. they're high school kids college kids and working in restaurant industry. >> we have specific examples of
people in situation where that's just not true. there are definitely people who are not in that category. we are in a rough job environment. >> well, there are people. you don't fix it by raising the price of everything, and excluding all kinds of people. most poor people don't even work. they--they're on welfare. the higher the make the minimum the harder it will be for them to ever get a job. you're excluding a whole bunch of people from entering the workforce, finding out how to get to work at 9:00 in the morning and find the bathroom on the first try. that is a nonsense policy and it doesn't help them. >> all right, bill, the next time you come on the show tell me what you really think. >> all right, take care. >> a very real milestone bit coin has broken the thousand dollar barrier.
last week bit coin passed $900. think about this. a year ago you could get one for about $13. forget ecommerce. the next wife o line of commerce me-commerce. taking customerization to a whole new level. and the woman who may be the ultimate black friday shopper. there is a method to her madness and she'll share it with us right here on real money.
>> connecting with customers a terrible business cliché but it's also a very real goal for every company out there. just think of the success of amazon's reading suggestions based on past purchases. digital companies selling a variety of goods and services are taking personalization and customization to a next level. they're doing it in different ways but all of them are trying to find a way into your mind and your wallet by giving them exactly what you want when you want it.
>> in 90 days, a small team of engineers and start up veterans created what they're calling the costco for the mobile generati generation. >> the whole sale club experience, the savings and that experience delivered to you right at home. >> warehouse clubs like costco, sam club selling whole sale prices long thought to be immune to online competitors. but using data analytics to predict when you'll need your next shipment of paper towels before you notice that you need to restock. >> when you swipe into it, everything is added to your card. >> growing demand allowed box to grow quickly to 48 states. still, new technology can be a tough sale when going up against one of the toughest sectors. >> the values that you can find
at the warehouse clubs, the ubiquity of those warehouse clubs, reasonable membership rates, all of these make it difficult for an online company of any sort to be a viable competitor. >> on the other side of the spectrum from bulk goods companies like custom made are also trying to tap into the needs of individual customers. they offer the ultimate in customization. anything from creating unique dress shoes to replicating a table. it could an broker between consumers and artisans and ranges $1 million in transactions in one month. the new me commerce or me-tail trend makes up only a fraction of retail sales. >> these custom eyesize opportus really are about when a customer wants something very special and is willing to pay that premium to get it.
>> they bring together the talent of entrepreneurs with the power of crowd sourcing. these sites give consumers a stake in in products by giving them influence tout the development process. the online community can submit product ideas. vote on which products to pursue. weigh in on design and style details and purchase the finished product all on the website. so far the online community has been buying in. the gromet expects sales and quirky announced a partnership with general electric. while it's still early to tell whether citizen commerc commercd translight into long term success, it can teach traditional retail heirs a few lessons. >> it's a few opportunities that these new models are representing. the smart retailers are going to take advantage of them and not be threatened by them.
>> al jazeera. >> a new report from forester projects online sales to reach $80 billion, and the third consecutive year that the sector has seen double-digit growth rates. well, sure, you could shop from the comfort of your home but some prefer the brick and mortar experience of black friday. a connecticut mom who plots her shopping route months before black friday and she's not done for the hunt of deals until weeks after. great to see you. i'm glad you could take the time out to see us. you've been heading for months towards this. you start your planning as early as june? >> you do, actually. thanks for having me. i begin my planning for the following black friday the day after this year's black friday, but heavily in june.
>> what is it that you're planning months and months ahead. we don't even know when the sales are starting and what's happening. so what are you planning? >> well, a lot of stores can he predictable. you might know what is going on or general idea of what is going on. you're planning your route. you're planning your mission, what your household might neat. the best things might be on sale. but if they're not applicable to your house and family then they're no interest of you. >> you start looking for things that i think of sundry and supplies. you say, i'm going to need these cards for my camera, whatever it is, so you pile up on them when they're on sale rather than buying them through the course of the year as many of us will do. >> absolutely. there is no better way. iif you know you're paying $8 fr something that you would typically pay fo $8 for in june. why not stock up. >> you have a three-tier
approach. you start at 4:00 in the morning. you're home by 6:00. explain this concept to me. >> really it's about supply and demand. it's about hitting the stores that mean something to you, and that have items that you would want to purchase. at a discount that speaks to you. so for me the black friday is my super bowl as well as retailer. shopping is our sport. for me a discount means 40%-plus off. for some it may be what your household needs. that's where the three-tier comes in. >> you plan a route that does not involve left turns. you only want to make right turns. >> it's not just that. sometimes there's turn on red. that's allowed. why stop at a left turn red light when you don't have to. >> i'm going to put up on two
screens. five tips each. you've got ten tips for black friday. and i want to ask you about a couple of them. one of them, don't take young kids out with you. >> you know, i feel--my heart feels for these young kids who are dragged from store to store to store. not only is it tiring for adults, much more kids. but there's a lot of wonderful deals, toys, great games, things of that nature that are out there, and of course the adults it's hard to say no, not to buy these things, but for kids it's even more so. >> in the second grouping of five tips you got one that caught my attention. keep the coupons that expire after black friday because stores will still honor them. i wouldn't have thought so. >> such an important point to make. i subscribe to different deals and discount books and sites and even previewers that e-mail out
coupons, as long as they don't expire before black friday, typically big name retailers will honor them. >> you've done a lot of thinking on this, and hopefully it will help a lot of my viewers who, like me, are a little bit intimidated to go out on black friday. thanks, and good luck this black friday. vita we can call her an expert black friday shopper. on thursday i'll introduce you to three entrepreneur who plan to build structures for space using a 3d printer. i'm ali velshi. thank you for joining us.