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Senior Advisor

Re: Lower incomes ahead -- what are you doing to prepare?

Based on the comments so far, no one is seriously contemplating doing anything differently.  We'll all be in denial the first year, or most of it.

The big wake-up call may come in November when the CPA gives the projected income tax and we find we don't have the cash to pay it as easily as we'd have liked.  That may set of a flurry of buying more so we can pay less.  Smiley Happy

Even next spring won't be a traumatic event but for grain farmers next year could be a little tight along come late summer and next fall could be downright depressing if we have another bumper crop.

I'm waiting on buying some toys.

I fix most of my own machinery.  I'm 70 and figure this equipment will see me out.  I don't care if it sells for anything at the auction.  So, I have an unfair advantage over the younger guys.  Patch it up, make it do, avoid big expenses.

If rent gets more than I'm comfortablw with I'll let it go and just farm the home place.  It's paid for.

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Senior Advisor

Re: Lower incomes ahead -- what are you doing to prepare?

Quote from Jim /Iowa City :  The big wake-up call may come in November when the CPA gives the projected income tax and we find we don't have the cash to pay it as easily as we'd have liked.  That may set of a flurry of buying more so we can pay less

 

That is a very good point - I have been working on my tax stuff all year and had a tax meeting in the first of Aug . trying to work out - just the best way to do this and   what  is - at this time the most important thing we need on the farm - it's pay uncle sam or use it here on the farm . lol

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Honored Advisor

Re: Lower incomes ahead -- what are you doing to prepare?

One thing I hate to mention, but must...i spent a half-day this week sitting through one of the most sobering meetings of my lifetime. If it hasn't hit your radar yet, look into the nppc.org site, and follow what is breaking in the US swine herd right now...PEDVirus.

The impact to hog farmers promises to be a stunning blow. One hundred percent mortalities in suckling pigs for several weeks running, much on the order of a TGE break. Unlike TGE, though, this contagion has now been documented to break a second time. Add to that abortions, increased sow mortalities, and general epidemic conditions.

Apparently, this coronavirus is so novel to the nation's pig population, there is no immunity, and there is no cross-immunity conferred by TGE encounters. The numbers are astounding. The measures we are having to institute, both through our integrator's practices and at the individual farm level, are adding costs at a time when we may be least likely to afford them.

Those of you counting on hogs picking up some of the slack in grain prices may be disappointed. In NC alone - and this apparently first appeared stateside in the Midwest, so your neighbors are further into the woods already than we are here - whole days of slaughter for some plants have died in the farrowing crates, and other litters haven't made it that far. The rate of farms breaking is accelerating to an alarming degree.

There is a world of sadness in swine right now. Anyone currently making money on hogs today had definitely better hold onto as much as they can.
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Senior Advisor

Re: Lower incomes ahead -- what are you doing to prepare?

See also Betsy Freese's Pork Powerhouse article of 1 Oct.

http://www.agriculture.com/livestock/hogs/pp2013-disease-hits-growth-continues_283-ar34203

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Senior Advisor

Re: As Bertie used to say

An old time neighbor that owned a number of acres and more than a few dollars in the bank used to say "Bertie has oats in the bin." That was hisfavorite remark when he he was razzed about his financial status.

 

Well Donnie has a few oats in the bin as well but not nearly as many as Bertie!

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Senior Advisor

Re: Lower incomes ahead -- what are you doing to prepare?

I'll bet you are prepared for what ever comes ahead. Perhaps that is a habit of ancient guys. Anyway those of us that struggled through hard times before are prepared for it again and I am far more comfortable than in 1986.

 

Lessons like that kind of stick with you and a strong cash position is comforting.

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Senior Advisor

Re: Lower incomes ahead -- what are you doing to prepare?

I completely agree Kraft. Cash on hand and minimal debt is the only sure fire bet against reduced incomes. Shaggy has a few oats in the bin as well, but the majority are still standing in the field in the form of milo. Hopefully within the next couple of weeks they'll be tucked away in the tin can.
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Senior Advisor

Re: Lower incomes ahead -- what are you doing to prepare?

Kay/NC   Is this a US only problem or global  ?

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Honored Advisor

Re: Lower incomes ahead -- what are you doing to prepare?

I will be honest with you...until this mandatory meeting with our integrator's production team, I had been sticking my head in the sand on this one, so cannot answer your question. I had received a recorded telephone message from them in early July, informing us that PEDV had broken in some farms near Mt. Olive, NC, which is several hours' drive away.

I was doing some volunteer work when that one rang in, and it sort of knocked me off my feet...I flashed back to when cholera broke in our county when I was a child. I remembered how frightening that was to my parents. This scared me on that visceral level....

The disease is apparently endemic in China, and it is suspected that, is how it got here...maybe some of those guys shopping in the Midwest, since that is where it broke? They sort of live with it, as we do with TGE, enduring outbreaks without quite the destruction that it is causing in the naive American herd.

Quite honestly, the pattern of breaks almost looks too pointed to be accidental to me.

We are fortunate to be in a production pyramid with PRRS negative pigs, and bonusing on their performance. Making some of the best money we have ever made in pig production. The herd health status here may or may not insulate us from this virus, since biosecurity measures are already in place, not quite as stringent as for the multiplication side, but close. The string of letters behind our farm's name on the trucking schedule are worth several thousand $$$$ apiece in our bottom line.

Right now, my emphasis is to complete the contact sheet for the integrator, which has to be submitted to our serviceperson on Monday. Plans have to be in place, in case of a break...the farm and a certain radius of farms would be immediately quarantined. Likewise, a break close enough to us would shift our status to quarantine level. That changes the whole game.

Beyond that, we now have a lockdown/ access by staff sign-in only policy in place, per the integrator's orders. Most of our services and deliveries land outside the hog farm fence, but diesel for irrigation, LP for heat, the CO2 delivery for euthanasia equipment, and possibly an electric utility person checking the RTU, all enter the perimeter.

They tend to come whenever, and we aren't necessarily on hand to check them in. That has to change, pronto. I need to have one sign made to that effect, and will be setting up a sign-in point here, near the farm office, plus informing each of these companies by telephone of the necessary change in procedures. They should meet this at every farm they serve in our system

The nppc.org site may give you broader info. For now, we will be following the daily hot list by email. This one, which has its own dedicated pages, is growing exponentially now. Here's hoping we all come out in one piece by spring.
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Advisor

Re: Lower incomes ahead -- what are you doing to prepare?

Clayton, I am dumping some baling equipment that I don't need anymore and my corn planter. Frees up a lot of capital to pay debt. All I need is the nt drill for planting.

Idk some pieces I never spend a dime on.. Like my buggy. This year Ive replaced a bearing and will splice some 1/4" hydraulic hose in. Aka next to nothing.

Drill needs no work. Sprayer no works. Tillage/packing no work.

Only unexpected breakdowns/ limited payments. I've never fixed a bin before. Tractors are funny though.. I like new/newer. Costs a bit, but far less than Junkers.

If I can't fix it myself I just pay an employee $20/hr to fix it. Can't say I enjoy downtime. Usually works. There are times when I pay 80 at a shop.. That's when it's real bad
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