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hardnox
Advisor

Re: farm programs do NOT bailout farmers.

Not sure where you were going with that in regards to farm programs and the nature of things at large but having met the principal and his primary associates and been shown around the operation not too long before it augered in I'll weigh in.

 

Stamp was certainly a man with a vision and that vision was that he was going to grab all he could of that particular unique chunk of the cornbelt fringe where the value of developing irrigation isn't fully and evenly bid into the market. He was further going to push to scale so as to cut out everything where anybody made a psnny off him- 4 mb elevator on primary rail, commercial sized fert offload and storage etc.

 

After seeing the thing my conclusion was that he was going to be King among the New Princes of the countryside- that would be people who were controlling as much as possible at the point when circumstances and the government doubled and triple the price of the primary commodity. Whether they had some growing pains or not I went away from that meeting doing numbers furiously in my head and on an envelope that indicated he'd surely made (real proit, not paper) $10s of millions by being in the right place at the right time during the boom.

 

The other impression that I came away with, though, was that the management demands associated with what he was doing were exponentially greater than the normal BTO operation and he was going to require some highly competent lietenants in several areas plus to learn to act as a CEO in directling that team. Just being another greedy guy with go-go-itis wasn't going to cut it.

 

Alas, I can tell you with probably 95% certainly that the hole in the bucket was on the elevator/marketing side where the tens of $millions of profits turned into the same in losses (Wells Fargo took that much in losses on the deal) and the basis of another good coffee shop yarn is founded. Turn the page, same ol story only bigger.

 

But anyway, here's my deal on BTOism and farm programs/support. Your run of the mill BTO is going to tell you that he is where he is because of superior management. Good enough, but the larger part of that superior management has been the strategic beiief that you keep the pedal to the metal because the government always backstops the game.

 

I'll conclude that in a rational world he ought to feel like Wile E. Coyote in that moment after he runs off the cliff. Now that we're down to it being about 20,000 indiviiduals or families that receive the majority of direct benefit from the backstopping (however it m ight manifest iteslf) the day  might soon come when suddenly nobody cares. Thatt would be despite the protestations of second and thrid order beneficiaris and regional politics.

 

PS. Farm balance sheets are in decent shape. There is little broad systemic risk in moving to a free market.

BA Deere
Honored Advisor

Re: farm programs do NOT bailout farmers.

Thank you for your input, Nox. 

 

Being a BTO kind of averages things out, they might have a range on land rent of between $120/acre to $500/acre maybe their average was $300/acre and make a small profit at that, they had made a ton of money on rents below $300 and lost money on the $500 rent...but they kept their volume and the land under THEIR control.  kind of like a big grocery store selling eggs for 9¢ just to get you in the store to buy other things.

 

 

I have noticed, very seldom will you see a Bigshot in a coop elevator, they think elevators are for suckers.  their grain goes right to the endusers and is put in bins at harvest...no sitting in lines to unload.   fertilizer is hauled from the river..they are their own "middleman".  They Jew on everything..field cultivator shovels and everything else, everything is bought at the cheapest bid with no loyalty to a local business.

 

the thing is, market gurus say and have always said "commodities always eventually fall below the cost of production".  The thing is the "taxpayer backstop" is now far below the C.O.P.    Many Bigshots have become "too big to fail" it will be interesting if prices stay low that there won`t be a "JP Morgan bailout".  I think if it comes to that there may be a seemless transition to ADM and others getting into the production side of agriculture for 10¢ on the dollar of course, with the Bigshot hired on as a manager.

bruce MN
Advisor

Re: farm programs do NOT bailout farmers.

Confident here that your final paragraph is a foregone conclusion. Agents for numerous entities are visiting with the financiers now. They will call on the potential "cooperators", together, later.

 

And as nox says, it won't necesarily be all that many.  But will constitute a significant parring on the fringes. Enough to be damned tough on the supp;y sector.

 

 

bruce MN
Advisor

Re: farm programs do NOT bailout farmers.

If you watch it you will find that muxh of what concerns you is justified. Validates some of your views. TR was as conflicted as you say. Shows how he became so and offers no apologies.  Just becase it's on PTV doesn't mean that it's a smoke over.  Burns exposed the seamy side of Baseball. Gave Prohibitoin a fair shake from both angles. Didn't make The Civil War as one more vehicle to bury the people of the South.

 

Or just pop in a Mel Gibson movie and wathc it for the 20th time.  Braveheart mght be appropriate with tthe referendum coming up on Thursday in Scotlkand. It's your time, and your TV.

 

hardnox
Advisor

Re: farm programs do NOT bailout farmers.

Bernie Sanders' ag platform for the Iowa Caucus should be:

 

Phase the Packers and Stockyard Act back in over 10 years.

 

No corporate ownership of grain production, including all contracts other than straight futures based pricing instruments.

 

Payment limit on CI subsidies.

 

A flexible ethanol expansion.

 

His folks ought to start polling it and working on it ASAP as I bet that you'd find more support than you'd imagine among the 98% of Iowans who don't currently directly benefit from the way things went.

 

 

hardnox
Advisor

Re: farm programs do NOT bailout farmers.

98% of Iowans, 99.99% of Americans.

Shaggy98
Senior Advisor

Re: In a very ironic twist

I agree 3020, Like him or not, Dave has some excellent points on handeling money.  I'm trying to get our local school board to implement some of his educational items into our high school curriculum.

NewAgJudge
Senior Contributor

D.R lol

 

I don't understand the love of this guy, it's all just simple common sense. But If people get motivated to save and burn down debt, that is fine and good.

 

But I'd lay naked down in front of a bus of nuns before I'd let Ramsey weasel his theolgy into a public school.

 

He is a shrill for the right wing evangelicals. To advise people to give 10 percent of their money to the scammy churches is disgusting. Dave Ramsey once scolded someone about letting her teen son give 10 percent to regular charities like Redcross or United Way etc rather than the church.

 

 His business consists mostly of church seminars ... Hmmmm. I'm thinkin there is an agenda for Dave Ramsey and his religious rights propoganda.

BA Deere
Honored Advisor

Re: In a very ironic twist

There is a Dave Ramsey based course in our local schools.  What drives me crazy listening to his show is people call it a scream "WE`RE DEBTFREEE!!!!!    FREEDOM!"      Then Dave says "That is soooo cool, how much did you pay off?"    Oh $180,000     Dave-"How long did it take making what kind of money?"     Oh I make $120,000 my wife makes $90,000...it took us 11 months to pay it off.   Dave-"so cool did you have a garage sale and eat beans and macaroni???" 

 

 

 

Give me one big fat flippin` break!!!!!!    If a couple makes $210,000 a year, they have no problems.  And in everyone of these stories...what the hell kind of "license to steal" do these people have making that kind of money?   and How do they pay this stuff off with AFTER TAX dollars???  or do they make this $200,000 net after taxes....which brings me back to my original question...What the kind of license to steal job do these people have to make that kind of money???   Smiley Very Happy

 

 

Here`s me and my Wife calling into Ramsey :  " Yeah, we`re $1 million in debt..I hope to make $10,000 this year and my Wife makes $15,000 a year...after taxes we might save $1,000 to apply against our debt...So Dave if you`re around in 1 thousand years we`ll be back and scream   WE`RE DEBT FREEEEEE!    Smiley Very Happy

NewAgJudge
Senior Contributor

Re: In a very ironic twist

 

 Don't forget to tell him about the repair bills on your 450,000 miles rusty pickup truck with the wooden stock rack on it.

 

 And dont forget to tell him the land value of the farm you inherited.

 

  And about  the annual tax payer subsidy that you and farm bureau love to receive.

 

I bet he will have some great advice for you and maybe even start a crowd fund to help you out. Smiley Happy

 

Let us know the day you call.