cancel
Showing results for 
Search instead for 
Did you mean: 
lemerik1958
Senior Contributor

Re: 2018 Farm Bill option that immediately provides Cash Flow!

First few years saw record prices. Mostly due to bush upping ethanol usage.

 

you must be a crappy cash manager. Good thing your socialist government check came in the mail. You’d be living under a bridge 

bruce MN
Advisor

Got your ethanol “right here”!

basset&co
Senior Contributor

Re: 2018 Farm Bill option that immediately provides Cash Flow!

NOT everyone signed on the line when it was flush.

Some personal responsibility WAS/and still is a large part of business, and life.

rsbs
Veteran Advisor

Re: 2018 Farm Bill option that immediately provides Cash Flow!

indeed, the glory years of the corn boom was a time to get your debts paid down or eliminated, and to position yourself for the bad years certain to come.

 

Those that do not learn from history are destined to repeat history.

roebke603591
Contributor

Re: 2018 Farm Bill option that immediately provides Cash Flow!

Two items for you to think about with poor Corn and Soybean Prices Farmers!

 

MYA Price for Soybeans the last 6 years says USDA was $10.88/bu. which means The Roebke Plan and RE-Coarse loan levels are still $2.38/bu. less than the 6 year average price!

 

Corn averaged $4.23/bu making my loan 73 cents less per bu. than average prices!  Farmers/SF when you have the option to hold 25% of your production off the market and go to E-11 the price of corn moves to $4.25 cash nationally immediately and Soybeans to $10.50 plus.

 

As for subsidies:  The CBO now estimates In FY 18 and FY 2019 Farm program payouts to Farmers will average over $12 billion/year!  Please ask SF why they don't write about the Roebke Plan or your favorite Farm Broadcaster?

 

rsbs
Veteran Advisor

Re: 2018 Farm Bill option that immediately provides Cash Flow!

Not hedging and storing unpriced grain is always a gamble....sometimes you win, sometimes you lose.

 

Lets change the picture a little bit....instead of $3.25 corn and $8.50 soybeans ( with a $1.60 addition...don't forget, so they are actually $10.00 plus) , lets say the market shot up to $6 corn and $15 soybeans again....should the guy that gambled and held on to his crops and is selling for top dollar have to give up some of his gains to the guy that hedged his crops at $4 and $10 last spring during planting?

 

A free market works to eventually clean out surplus supplies and rewards and penalizes all equally.

 

A better plan is to be proactive and try to do a good job marketing in challenging markets and not expect more socialism.

 

 

roebke603591
Contributor

Re: 2018 Farm Bill option that immediately provides Cash Flow!

Not hedging and storing unpriced grain is always a gamble....sometimes you win, sometimes you lose.

 

We all agree RSBS

 

Lets change the picture a little bit.  No lets clarify the picture a lot!  My corn loan rate is $3.50 and with today's report my loan program makes USDA's $3.55 season average price the bottom of the market for 2018 corn going forward!  My E-11 rate would still use another 275 million bushel more corn for ethanol of the 2018 Crop, which is needed by drivers as well to combat higher crude oil.  ...instead of $3.50 corn and $8.50 soybeans ( with a $1.60 addition...don't forget, so they are actually $10.00 plus) , 

 

I'm not here to have readers dream about market prices RSBS/SF.  I'm here to support the average Farmers cost of production, from the Market Place, just like i did with Sugar almost 40 years ago!  lets say the market shot up to $6 corn and $15 soybeans again....should the guy that gambled and held on to his crops and is selling for top dollar have to give up some of his gains to the guy that hedged his crops at $4 and $10 last spring during planting? You see RSBS/Readers, with the Roebke Plan, Farmers will get that price or more without the danger's of hedging and no cost for Taxpayers.     A free market works to eventually clean out surplus supplies and rewards and penalizes all equally. A better plan is to be proactive and try to do a good job marketing in challenging markets and not expect more socialism.

 

RSBS/Readers, There was also a CCC loan report today that shows only 885 million bu. of this years corn crop off the market under CCC loan and only 210 million bu. of Soybeans.  So with the elective Roebke Plan.  Farmers can easily puts all the Carryover crops estimated today soundly in the Farmers Bins and not there to lower prices and raise Subsidies like they will do without the Roebke Plan as an Option!   Plus every banker will know what the Farmer will have for a minimum price this fall, to payoff their operating loan and no costly hedging program to fund!

 

RSBS, i and all the Readers here, are wondering do you still have any un-priced 2018 crop?  We also want to know how much 2019 crop do you have sold/hedged as in percent?  So with Trumps $1.65 what was your net for 2018 soybeans and corn as a master marketer?  Thanks for the replies, Alan

WCMO
Senior Advisor

Re: 2018 Farm Bill option that immediately provides Cash Flow!

Didn't really want to wade into this, as haven't really given it much thought, so sorry if not interpreting this correctly.

 

A grain loan with recourse, is not effectively a price floor of any kind, it is just a source of funds at perhaps a lower interest rate than provided in the open market.  It doesn't take anything "off the market".  It doesn't guarantee any price.  So the higher loan rate, recourse loan, simply substitutes the CCC for your bank's short term loan.  Then, sub-loan prices potentially cause defaults, for which the farmer remains liable, unless you're coupling this with some sort of CCC loan forgiveness program, which would not appear to benefit everyone equitably, unless forgiveness is at some pre-determined price level, which would then be a non-recourse loan, and essentially a price floor, at that point, at least for those participating with the CCC loans. 

 

As far as mandating E11, don't really have much of a problem with that.  Yet, not everyone even uses E10, so maybe mandating E10 in those areas would achieve the same thing.  And, I thought we've been working toward E15.

 

And, is this article about you?  https://www.fergusfallsjournal.com/2008/03/felon-seeks-gop-congressional-endorsement/

 

 

roebke603591
Contributor

Re: 2018 Farm Bill option that immediately provides Cash Flow!

Didn't really want to wade into this, as haven't really given it much thought, so sorry if not interpreting this correctly. All you need to do WCMO/Readers, is put the $3.50 corn and $8.50 soybean loan in your 2019 crop cash flow and have your Banker do it with all the Farmers he lends too!  You both will immediately see it's financial power and influence on the Boys in Chicago!  A grain loan with recourse, is not effectively a price floor of any kind, it is just a source of funds at perhaps a lower interest rate than provided in the open market. It doesn't take anything "off the market". It doesn't guarantee any price. So the higher loan rate, recourse loan, simply substitutes the CCC for your bank's short term loan. Then, sub-loan prices potentially cause defaults, for which the farmer remains liable, unless you're coupling this with some sort of CCC loan forgiveness program, which would not appear to benefit everyone equitably, unless forgiveness is at some pre-determined price level, which would then be a non-recourse loan, and essentially a price floor, at that point, at least for those participating with the CCC loans.  WCMO, It's a floor, for the 9 month loan has another 9 month extension on up too 25% of your historic production.  Meaning the crop carryover that WASDE reported today stays in the Farmers hands and does not get dumped in the Grain Merchants lap like it is today.  As far as mandating E11, I don't really have much of a problem with that.  as not everyone even uses E10, The really today is almost every state and driver Does! so maybe mandating E10 in those areas would achieve the same thing. And, I thought we've been working toward E15.  I don't affect E-15 at all, for it doesn't use much corn.  But going to E-11 uses another 550 million bu. of corn annually!  Meaning if Secretary Sony Purdue, Congress and the AG Media in early September at Big Iron in Fargo would have jumped on the Roebke Plan that i introduced there, today's corn report would be much different.  Corn usage of the 2018 crop would be at 15.315 billion and carryover at just 1.285 billion or just 8.4% carryover or stocks to use ratio at 8.4  which is dam low.   And, is this article about you? https://www.fergusfallsjournal.com/2008/03/felon-seeks-gop-congressional-endorsement/  Yes, that's me and i only lost by .2 of a % and i would have saved taxpayers billions on AG and Trillions on bailouts of bad home and stock market loans!   Alan  

WCMO
Senior Advisor

Re: 2018 Farm Bill option that immediately provides Cash Flow!

I rest my case.