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hobbyfarm2145365
Senior Contributor

Re: local economies

Do you realy think we can export $12 or $15 corn?    Our corn exports are done for 2012 to levels similar to 70s  due to our over priiced  corn.  If yield levels return to 145/150  corn for 13 with  over 99 miilion acres planted what will price levels be?   Funny thing about food costs just aski the consumers about food prices  you get the same reply as they have about gas prices.  

hardnox604008
Advisor

Re: local economies

Somewhat pertinent to your coments.

 

A couple of years ago a colleague and I had the opportuntiy to see a bit inside, beyond just the surface view, of Stamp Farms. That is the 40,000 acre outfit in Michigan that is currently undergoing bankruptcy liquidation.

 

Almost all of those acres in irrigated corn and a massive proghram to build a 100 car grain loadout on the expanded 4 mbu elevator, huge bulk rail fertilizer storage and unloading etc.  He and I were discussing the whole thing as we walked away and concluded that he could be spending almost anything on rent and nevertheless the nature of the production ground, the advantages  in both buying and selling and all and he was still golden primarily due to the luck or strategy of his timing.

 

We did say, however, that he had bitten off a mindboggling degree of management demands- a quantum leap beyond even your basic, run of the mill mega BTO and that I wouldn't even begin to attempt it without a bevy of very good and trustworthy lieutenants.

 

I'm pretty well certain that the sudden, huge, deficiency in the 8 figure range didn't come about from paying too much rent as speculated here and around the web. There was a hole in the bucket somewhere, well actually the bottom fell out of the bucket, and it almost certainly had to do with decisions in and around the elevator/hedging operation.

 

Top Producer loved the story about his fully integrated approach and he was named runner up muckymuck of the year.

 

Anyway, I have on my wall the words of the great philosopher Harry Callahan- " a man has to know his limitations."

kraft-t
Senior Advisor

Re: local economies

Are crop indemnity payments not insurance payments rather than government money? The gov't subsidizes the premiums but the claims are charged against the insurance providers. Or am I wrong about that?

 

So if BA wrecks his car it is my money paying him because I pay my premium?

Red Steele
Veteran Advisor

Re: local economies

Not sure how much that Dirty Harry does when he produces and directs a movie...if he has lieutenants that do the grunt work or not...but I do admire how much better the movies with the Eastwood stamp are now than when Pale Rider and those forgettable early works came out. Mystic River, Gran Torino, Unforgiven, etc etc...great movies.

 

Glad that you see the challenges of integration. Building plants, hiring employees , running things...all of this takes organization and the local coffee shop denizen is not up to the chore. Sounds like Stamp farms bit off more than was chewable, too.

 

The guys that just call up the coop to plan their selections, buy new equipment and have a margin that enables that luxury, sure could be easily replaced by a coffee drinker, though.

 

bruce MN
Advisor

Re: local economies

How much shelf life did the operation have from the time they accesed an unlimited line of credit and the hammer came down? No doubt able to pay himself, the wife, the dog and the boar pig enough annually to build a nest egg if he had the accountants to keep it insulated form the entire LLwhatever.

 

The life's lesson in that was brought to agriculture in the formation of a couple of big pioneering swine imegas, early integrators (one still holds it's original name) in the 1970s.  A "bunch of guys" developed a business plan, attracted and pulled in investors looking for tax breaks and financiers (foreign and domestic) looking for big portfolo globs and paid the absolute living crap out of themselves for a few years and then bailed out.  As nothing more than failed employees. Victims, if you will.

 

More than one or two of those "guys" and their families and the companies they spun off to are living large in "the business" yet today.

 

Not too likely that the whomever guy it was who dreamed up and sold his creditors adnd suppliers on this now doomed outfit that you are referring to is going to find himself sitting alone on the back alley steps of some pool hall in a run down section of Grand Rapids or Kalamzoo, drinking out of a bottle of rot gut in a paper bag.

 

 

bruce MN
Advisor

Re: local economies

The Clints are all good by me.  The old early old spaghetti westerns and the later day westerns, the Harry's,  as well as all of those modern themed films he produced, directed, acted in...whatever.  He's one for the ages.  Not sure he'll be fully appreciated until he's been gone a while and people realize that he hasn't been remotely approached in stature based on the sum total of his work and contribution..

 

One, a relatively early one, sticks out for me among the many great ones as being right-on for ANY time in the history of man.....High Plains Drifter.

hardnox604008
Advisor

if it were a union

that controlled all the collective accumulated skills and knowledge of people who are currently farming, and they could all quit simultaneously, then that would be a big deal.

 

But as to whether the world skips a beat if you, I or a 40,000 acre BTO goes down, not in the least.

 

Or in the current environment millions if millions of acres magically opened up- there is capacity galore to farm them.

 

In the case of the 40,000 acre BTO, there is a stalking horse bid with the bankruptcy court for $34 million; there are guys who would come from 3 states to take that over.

 

And while they probably would take a hit on the learning curve for a year or two I wouldn't recommend going long the corn market based on the expected shortfall.

WCMO
Senior Advisor

Re: local economies

The money never just evaporates, it goes somewhere.

Red Steele
Veteran Advisor

Re: local economies

Bruce, those pictures are Clint as an actor...directed by that Italian dude Sergio somthing I think. No argument here...the spaghetti westerns were great. I am talking about the films that Clint actually produced...the early works are not very good imho.

bruce MN
Advisor

Re: local economies

Sergio Leone.  I can't sort them out quite that easily Red.  Jose Wales and 2 Mules for Sister Sarah aren't as good in my mind as those either in  so I suppose I do agree wtih you more or less on ranking the periods, I simply get a thrill watching the guy in just about anything.  Magnum Force is one of those sucker movies that if I start watching I stay up 'til it's over.  Like Shawshank Redemption that way for me.  I wasn't particularly taken with Million Dollar Baby.  I suppose that I was supposed to like it to sancitfy my liberal social views, but I thought it was overdone.  Unforgiven....fantastic.