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11-03-2016 11:43 PM
i've been thinking about this for a while......as of late besides dealing with farm stuff, i have been lucky enough to talk to some
very smart people, and they took the time to explain a few things to at times a rather bull headed el cheapo.
I'm also working in the background on a huge project, and getting an "education".
took some time to do some reflection.........on where things are at......and where they are going.
agriculture......well let's just say, the entire economy, is having problems.
one economist i visited with, explained to me how to create "true wealth". The key is to "make something".....you take low cost raw materials
and do value adding by making something. Today, many of our "creation" jobs are overseas......we are now a "service" economy, true wealth
is not generated in a service economy.
Also, jobs were exported, all in the name to make cheaper prices....we can sell more.....we exported jobs to other nations,
which lead to creation of life there......but also to keep prices low....but something has happened........we have done away
with our jobs....so we can not buy.....which short circuts the whole world, since they have switched to lowest cost producer...
but now the whole world is having a problem, one the worlds biggest consumer, the U.S. is having problems due to no jobs
and we are not buying.
i've asked the question........what can be done to fix this idea.......the sad answer is, there is no answer, other than somehow
to bring back the jobs....and there is no way to do that.
with agriculture, we have a supply problem.......we have too much grain.....only two ways out.........use it or don't produce it.
we have piles upon piles of grain on the ground.....part of this is because some of the older storage structures are gone,
but also an indication on how much grain we still have.
we need a drought....somehow to limit production........i guess there is such a thing called harp......
we must come to the realization......we either use more, or produce less.......but the problem is so many "interests" are out
there to keep things at a satus quo........the elevators or grain dealers........the more the bushels, the more we make.
since there is a limit on how much we can use....we must cut how much we produce.....we are going to need to look
at productiom....some sort of set aside or crp program......
i'm not going to get into the election.......but i will say, i have been reading very hard on healthcare issues and insurance.....on
has a prosal to cure the problem of health insurance, is to have unfunded mandates by this person running....the state pools
will need additional money from the states to make them float......the states don't have the moeny.
11-04-2016 06:16 AM
My first question is are you using "set a while" to be an attempt to phonetically render the way the word is pronounced by some - a word that is actually "sit" or are you using it deliberately to mean go into a solid stage like concrete sets up? As in maybe you thinnk that is our problem - that we are not flexible enough.
As far as how to solve it, is is not really a marketing page problem. It's a lot bigger than that.
You discussion assumes we have a right to a certain standard of living and we are justified and indeed must shape economics to to make that happen. Controls haven't worked in the past, why should they work now?
Another answer might be to let ecoonomics, like water, find it's natural lower level. No more crop insurance or bail outs.
As more and more production is automated, the strains on our economy are going to get worse. We might think a plumber or electrician has a safe job, but as items get sensors built in someone in Bangla Desh can tell your refrigerator to order a new ice tray for itself.
It's going to get worse and worse. Maybe it's time to quit fighting the problem. Maybe we do have to figure out how to live on third world wages (ofr course, those people won't have work, either).
11-04-2016 06:56 AM
healthcare encompasses a huge arena in terms of care from preventative medicine such as a yearly physical to some major chronic diseases that cost millions! And we all want to live and we all want to live without any health issues that would keep us from living a normal life. But as we all know it comes at a cost to all in the form of premiums each month that have been increasing exponentially every year. The mantra now has been to blame it on obamacare but the truth of the matter is my premiums were skyrocketing before that came into effect.We do not run to the doctor because my family , knock on wood, are fairly free from any chronic sickness other than the occasional cut that needs stitches. but with a huge deductible of $13,000 we pay it out of my wages so that my premiums stay somewhat afforable. After a recent doctor visit i recieved my bill which was $150.00 for a ten minute visit which was needed to set up a routine blood test. Havent got the bill for that yet but then another doctor visit to explain the blood test for another$150.00. My point is how can a person afford that if you are a self employed small business owner barely making ends meet?
Forty years ago a doctor visit was $20 but i was making $5.00-$7.00 an hour. At the time it took a few hours of wages to pay the bill but now it takes days of pay if not the whole weeks wages to pay for the same visit.We all think that insurance will pay or the government will pay if we are poor but the truth of the matter is "WE" pay thru premiums or higher taxes! Someone has to pay!
In my opininion the actuarial tables that insurance companies use to pay all the claims are probably close to what they need plus a profit.
Nobody wants national health care but yet nobody wants to pay for private insurance either!
11-04-2016 08:29 AM
Well basically to sell grain for export it has to be so cheap that in most years the average farmer is losing money on it and in turn we as a nation buy $700 billion more products in I-Phones and Samsungs and Hyundais. If they can buy beans from Brazil a nickel cheaper they cancel our shipment and it`s back to square one.
One day when the number of farmers are the same as the number of seed companies then that will all change and that handfull of farmers will become "price setters". If John Deere isn`t selling $200,000 tractors, they don`t cut the price and keep producing, they lay off workers and close factories until supply catches up and they can once again move their $200,000 tractors.
Until then as an individual farmer all you can do to get big so you have clout on the inputs you buy. If you plant 10,000 acres of corn and pay more than $150 per unit of "Pionkalb" seed, you are not taking full advantage of your bigness. Then you capitalize that input savings into buying/renting more land for future bigness discounts. In this environment, you have to make your money when you buy, cause it`s sure tough making it on the marketing side.
11-04-2016 08:30 AM
As far as the jobs part goes, even if the jobs are coming home they're not coming back- regardless what grievances people have about the past, machines work cheaper and better than even the Chinese.
There will be a few very good jobs for engineers and the like and a few more for technicians. If our Suburu plant is any indicator, though, even those technically trained operators that they're screaming for won't make what a UAW wrenchman did in the day.
There's nothng particularly ennobling about standing on a line and tightening a screw for 8 hours but it was nice to be able to feed a family and it was also nice to have people with the money to buy things that were made. Aggregate demand is the problem going forward. No point in shooting where the duck was half an hour ago.
Ag- I assume that as far as farm programs go, supply management programs remain discredited so we'll probably stay with LDP Lite- just freshen up the guarantees a bit as the averages begin to shrink away. Curious that of course the full out LDP failed just as miserably as supply management did but that's government for ya.
I saw a Washington ag consultant say he thought there'd be a new farm bill before the old one expires 9/18. I'm starting to see national news pick up on the story about the struggling farm economy whih is usually a good sign that somebody is working it. I imagine MON, duPont, the Kochs etc. need a little BST for their human milk cows.
Although I wouldn't count on anything in this political environment. If farmers are too proud to take their welfare from the food stamp welfare bill, I'm glad to accomodate.
11-04-2016 08:36 AM
well stated hwr247, and I read your opinion
Your comments on healthcare are accurate historically.
Where I disagree is the idea that Obamacare and healthcare have anything to do with each other....
Obamacare is a one small part of the redistribution of wealth project... It is designed to give something to a special interest group that is paid for by the rest of the population. Healthcare problems just as you describe create the opportunity to impose a fake healthcare plan that is nothing more than a handout and theft.
Healthcare will always be here just as it always has, even after we finally stop falling for the scam...
It is not that big of an arena. It is the medical professionals and the patients.
Insurance companies are a device created to handle the extremes. (Government regulation has screwed up Insurance.
Insurance was our best method of holding down costs but regulation and government demands on the definition of healthcare have ruined those efforts).
Otherwise the medical profs. will accept what the patients are willing to pay. Or they are unemployed or on county assistance(like most small hospitals).
And the patients will pay what they can afford.
Healthcare didn't stop in the 1930's. Healthcare will be fine.... not filthy rich but fine.
It will adjust as soon as the patients stop putting government in the way and go back to basic healthcare..
It is unbelieveable what we call health care and what miracles we expect health care to proform on a daily basis.
Government help always ratchets up the cost of everything. And always with strings.
11-04-2016 10:33 AM
The profit on grain farming is really a cost of production problem. In that area, sure, seed and fert monopolies are obscene but still only a modest part of it. The real problem is land rent and land valuation. The farmer has no one to blame but themselves. If land was still $6000/acre (twice its value in 2005 for reference) and rent was $1/bu for corn ground ($200 in much of the belt), most can make money on $3.50 corn. The market will fix this problem in its own time, but asking one exporter (either usa or SA) to reduce acreage won't accomplish much of anything.
Luckily in ag we get production shortfalls every few years and are given chances to lock in good prices for a few years.
11-04-2016 11:21 AM
Time, every farm situation is different, but we are all breathing the same atmosphere. There can be the same farm and one guy would scream "bloody murder!" at paying $200/rent, the next guy could pay $300 and not bat a eye and make money.
Well, the $200 rent guy might be a smaller opperation and too much of his farm income goes into his living expenses and pays $250/bag seed. The $300 rent guy maybe buys the same seed for $150, has variable rate technology and his fertilizer is 1/3, maybe in exchange for a longer lease will tile the farm with his own plow in on the deal. Maybe his living expense is $10/acre because of more acres.
In that environment, the $300 rent guy sets the bar, in some cases it isn`t about "bidding the land up" so much as "that`s what it is, take it or leave it".
Just stepping back and looking at the big picture, what we are seeing is the painfull effects the last clingers letting loose of the limb and falling to the ground due to the industrialization of agriculture. Some time in the 80`s it was determined that "farming is a business, not a way of life" and we`ve been on the slippery slope every since.
11-05-2016 08:21 AM
Time in theory your right....
But federal intervention skews the market and market may not "fix this problem" for a generation.
When the perception is that 3% return on investment is desireable without other dependable investment options we may find ourselves setting at this stoplight for a long time looking at a federal malfunction in debt.
the outside investor phase may be longer than normal
BA's example touches on a couple of many distorted issues brought on by federal debt, monopolies, etc etc etc.
There are many things driving the value of land,,,, most not market price related.
But from the long term perspective yes it will reset...... but not quickly......