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Senior Contributor

New Message: All business

Do you agree that marketing meetings are different nowadays? I'm not saying different in a bad way, just different. I'd be interested in how you feel. With a video, here's a recap of a recent marketing meeting I attended this week.

 

Here's the link:  http://bit.ly/fmTdjX

 

 

 

Mike

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21 Replies
Senior Contributor

Re: New Message: All business

Mike,

I my opinionl, the speakers are reflecting the instabilty of the market as reflected in it's volatitily.  In a word, there is no way to hedge these markets.  If there were, we'd all be getting projections and forecasts.  Having economic experts try to teach us to be like themselves is admitting they don't have the solution.

 

This situation has been building and came to a head in 2008.  We're all grappling with the dilemma.

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Senior Contributor

Re: New Message: All business

Well put, Jim.  This is a different game.

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Senior Advisor

Re: New Message: All business

I don't put much faith in marketing gurus. When they do make a prediction, they balance with the opposite possibility. After a while you wonder if they have made any solid point at all Or just a CYA rebuttal to what their original point was.

 

It seems like that is a serious character flaw.  What is wrong with, " I may be completely wrong about this prediction but from this perspective I beleive the market will continue higher. However, if you are operating on the financial edge, I would suggest you sell some $12 beans and $6 corn.  I don't want you to be wrong and you suffer mightily because of my expert prediction."

 

That clearly tells you what I think, not what I know.

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Senior Contributor

Re: New Message: All business

Yeah, it's a definite maybe.  Another description made popular by the sitcom "Spin City" was "deniable plausibility."

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Advisor

Re: New Message: All business

  $6 corn and $12.50 beans should keep one far from the financial edge.  If it doesn't, theres too much new paint sitting around.

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Senior Contributor

Re: New Message: All business

That was certainly one of the recommendations at this meeting I wrote about. For the next 3-4 years, the message was start up an adjustable interest rate fund or lock in some of today's low rates. At the same time, farmers were encouruaged to pay down debt and leave the iron alone.

 

Mike

 

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Veteran Advisor

Re: New Message: All business

Mike I mentioned the rise in interest a couple of weeks ago in my parlor pit post. This is gonna kill the dairy industry. After 2009-10 many farmers borrowed against everything to keep basic bills paid. I know of farms that were borrowing up to 50,000 every month just to meet the financial obligations like wages, insurance,electric bills, etc,etc.   Alot of those were on operating notes with variable rates.

THose will start going up maybe this spring but surely this summer.  As they do the cash flow will get trimmed again and with falling values in the cow herd equity is going out the window very fast. Feed costs are going up as well and a higher interst rate will begin to hurt suppliers who are carrying old bills on the books. Interset will put this dairy industry back on it's heels.

ALso higher interest rates will cause buyers of grain to have to widen basis as they need more margin for thier money costs.

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Senior Contributor

Re: New Message: All business

The tip for farmers, I'm told,  is to lock-in their grain prices, lock-in interest rates, and/or start that adjustable interest rate fund. I just talked to a farmer in Iowa that says he is trying to lock-in interest rates and will begin to pay down some equipment debt. So, maybe there are signs that farmers are paying heed to some of this advice. But, it would seem your line of thinking is right on-track with those that believe the "Interest Monster" is out there somewhere.

Thanks jrsiajdranch for sharing. This forum is much more beneficial to others when folks are willing to share their thoughts.

 

Mike

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Senior Advisor

Re: New Message: All business

I been telling the fellows here to pay down debt and leave the new paint alone for at least two years if not longer.

 

"make hay while the sun is shining" $10 plus beans an $5 plus corn. What a golden opportunity to get the financial house in order!

Instead of profits establishing more debt, one should be paying off the bank. That is nothing more than what a caring father or grandfather would tell a loved one. You didn't have to hear it here. Your daddy told you the same thing years ago!  Ha!

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