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Honored Advisor
Posts: 17,365
Registered: ‎05-13-2010
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Re: When is it gonna catch up to input sellers?

Well, it sneaks up on smart and competent farmers.  Take a farmer pre 2013 who was told "we`re in a new price plateau +$100 oil...peak oil peak corn...land they ain`t makin` anymore of it".   I`m not letting the farmer off the hook, history repeats, memories are short and time heals wounds from the 80`s.

 

But yeah, 2011 landlord says "pay $400 or I`ll rent my 1,000 acres to any one of a dozen farmers licking their chops at my front door"...well, pay the $400 rent or the 9870 doesn`t have much to do next fall.   $400 rent...better plant Channel smart stax, better not skimp on N,P & K .  Well you make a little or thread water...until 2013, 1 foot of snow May 2nd and solid rain May 15 to July 1 and falling prices.  So the "burning of equity" innocently begins...Hey Mr Banker I`m gonna have to borrow operating money just to get past this one time bad year of 2013. 

 

Then 2014 good yields worse price...more borrowed operating money to get over this rough patch heh heh heh.  2015 tough year prices fall money, more operating money, what`s the odds of 2016 being bad?  Good yields prices fall more, need more operating money, last time I promise, 2017`ll be better.  2017 it gets worse funny thing Mr Banker, you`re gonna laugh, I need more money heh heh heh.  2018 crappy yields and prices go sub 2005 near LDP levels.

 

Well Mr Banker 2019, here we are....if you close me out, I wouldn`t blame you a bit.