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Senior Advisor

Re: The current 'golden era': When will it end?

 
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Advisor

Re: The current 'golden era': When will it end?

Good observations.  I remember discussing this with a younger adult (young, immature, naive, little appreciation for the study of economics and business cycles), and he summarily dismissed my observations that were similar to yours, saying I didn't know what I was talking about.  Today, he's a slightly wiser older man and has had to weather his own economic cycles of working for a living.  There's no substitute for the school of hard knocks.

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Senior Contributor

Re: The current 'golden era': When will it end?

I agree agriculture, like many other industries is cyclical. The cure for high prices, is high prices. Technology always finds a way to do more with less resources.
I would add to the "it's a new era" or "it's different this time" idea though. It kinda is a new era with respect to the renewable fuels standard. We never had a federally mandated standard for 12-15 billion gallons of corn juice before. Fuel suppliers can't just stop using ethanol unless the law changes. And when our lawmakers cannot complete anything in Washington, I dont see a change anytime soon.
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Honored Advisor

Re: The current 'golden era': When will it end?

These comments mirror my remembering about previous good times, below.  I stepped out of college in 1975, into the tightest job market for teachers out county ahd ever seen, and got one of only two jobs available that year. 

 

I often wonder how our lives would have been different if I hadn't gotten thta one, and had taken the detour from teaching for a living that much earlier.  Either way, it wasn't for me. 

 

We cannot judge the young for not believing it could happen to them...we have allowed the tuition loan machine to saddle a lot of people with insurmountable debt, many of them for training in jobs that woud never be able to repay the costs of the education required to hold them.  It is a negative cost:benefit calculation...yet, the myth of learning one's way to prosperity at borrowed expense persists. 

 

Tuition in the school of hard knocks is not cheaper, but we tend to recall the lessons learned there more completely and accurately.  If life is alwasy a straight, upwardly mobile line, we never learn how to backtrack and recoup, both useful skillsets. 

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Veteran Advisor

Re: The current "golden era": When will it end?

It isn't so much a question of IF someone will farm the land around here, as much as WHO will farm it.  I can think of NO older farmer in the area who will expand.  My brother and myself are the only ones under 50 for a long ways, and most are over 65, and don't have much extra machinery capacity, and are wanting to slow down, rather than expand.  Other areas may not be like us, but speaking for here, there are a lot of older farmers, who's kids have no interest at all in farming.  As they retire or pass on, I don't know what will happen.  We are already being encroached by corporations fronting as 'farmers' that are taking over the land.  I live not too far from Nebraska's biggest cattle feedlot, and they do not want to be beholden to anyone's price for corn.  They may be the biggest BTO in the State, and they are renting land so they do not have to buy corn.  I did the math once, and they feed something like 20 semi loads a day, plus the silage, hay, DDGs, and such in the ration.  Their pattern is to swoop in, pay high rents for something like 5 years, mine the fertility of the soil, and then leave the landowner with a field full of weeds, and empty of nutrients, and often rutted and/or washed.  With most of the people who rent land being the kids or grandkids of the original farmer, they tend to go with the highest rent.  They have every right to rent to whoever they want to, at whatever rent, but if you have 4-5 years of no available land to rent, combined with poor prices, some of the young guys like me will have a difficult time pulling through.  On the other hand, while things are good, if I pay down debt rather than fall for the allure of shiny paint, maybe I'll have an opportunity that I otherwise wouldn't.  It will all depend on the timing of it, I guess. 

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Advisor

Re: The current 'golden era': When will it end?

The young cannot certainly be completely responsible for the sad state of affairs with the loan program.  The adults in the schools and especially, the online schools of today are responsible for the majority of loan volumn, not to mention the majority of default as well.  They sold the student a fake bill of goods, promising the moon and delivering a pig in a poke.  The pressure to deliver a diploma to every warm body that breathes without regard to qualification or IQ created an atmosphere not unlike that of the mortgage lending fever that created the housing bubble.

 

I agree wholeheartedly when Warren Buffett says those who have a 90 IQ cannot fill the need for the jobs we have to have in order for America to regain today's manufacturing jobs.  He acknowledges the reality of the workplace, but the education establishment, especially the community colleges and online diploma mills haven't gotten the message.

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Honored Advisor

Re: The current 'golden era': When will it end?

As long as ladies have babies there will be a demand for food and earth`s population keeps going up.  Eggheads can tell you exactly by 2030 there will be 8 or 9 billion mouths to feed, there probably will be short-lived periods of $3 corn but the tend is the farmers friend.  Yields have gone up, but have flattened, all the low hanging fruit has been picked.  IMO the reason yields have went up from say `85-2005 is weed-free roundup crops and over equiped farmers that can plant and harvest timely.  Also farmers are more specialized today, no more having to spend the morning doing chores, they roll out of bed and plant.  See, all those things have been baked into our yields.  Also getting access to enough fertilizer to replenish to yields that we have been taking off. I don`t think that there would be enough fertilizer to go around if everyone fertilizer the way they`re supposed to. 

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Veteran Advisor

Re: The current 'golden era': When will it end?

just because something is advertised does not mean that it should be purchased. Using your logic, anyone that buys a new car because they saw it advertised enough on TV should not be responsible for paying back the loan.

 

You know, at some point, we have to re-introduce this concept called "personal responsibility" back into the vocabulary.

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Senior Advisor

Re: The current 'golden era': When will it end?

Intuition seems to say we will have booms and busts.  If we have a downturn, for many of the reasons you all have brought out, I suspect we'll see larger, more vertically integrated and more highly capitalized farms.  We may also see some foreign investment.  If the whole world worries about food, those with money will try to secure it.  It will raise a howl, but will anything be done to effectively prevent it?  Yes, we have current reporting laws.

While farms get bigger, I think there will be plenty of room for boutique food production both in urban areas and in climate controlled environments.  But it won't be enough to make a big difference. 

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Advisor

Re: The current 'golden era': When will it end?

Oh, agreed.  They need to be taught personal responsibility, but the parents didn't do their jobs.  However, there's plenty of blame to go around for everyone involved in education.

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