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Senior Contributor

Going out on a limb for a prediction

I'm almost afraid to say this.  In early 98 while Plains and Grimes were saying hogs would get into the high 20's I was claiming that there was nothing to stop them from going into the teens.   All through the early 2000's I was saying that this whole economy was like a mushroom that was just pushing up a spindly stem ready to collapse in 2008 or 2009.  Read the archives.  I hate to say this next one.  Any kind of weather scare at all this winter in South America or next year in North America will run grain prices to the point there isn't a livestock feeder on the planet that can even think about paying the feed bill.  $20 corn if you could buy it will be cheap.  It could be mass riots all over the world because we will have hit that wall they talk about when the "American farmer" can no longer feed the world. 

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Honored Advisor

Re: Going out on a limb for a prediction

I`ve raised hogs for 30 yrs and sort of a base price you always needed to at least stay in bussiness was "$40 hogs".   When corn was $1.40 you made real good, when corn would short term spike to $5 you could tread water.  Through gov`t interference food has stayed artifically low (10% of incomes), accounting for inflation in 1980, $40 hogs would translate into $110 hogs today. Bottomline people will have to pay more for food, specialized `pork producers` can NOT continue to figure on making a profit on the backs of corn prices, in will have to start coming from the super market for a change. Let`s say corn goes to $10 or roughly 20¢/lb, figuring 4 lb of feed to put on 1 lb of gain that`s about 80¢, if hogs would at least keep up with inflation you`d have 30¢ for the rest. Oh it`s gonna be messy, it was messy all through the 90`s when "Big Pork Inc." raped the industry. BTW  alot of economic changes(hyperinflation) would have to occur to support $10 corn or higher.  

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Senior Contributor

Re: Going out on a limb for a prediction

 "American farmer" can no longer feed the world.  I feel hesitant to remind you but you will find there are other people on this planet than you and you supply nothing near enough to feed the world.  In fact, this country exports approx 70 per cent of everything it produces.  You might think the sun comes up each day to shine on the US but that is not true.  Who ever is writing this stuff is a bit self engrossed.

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Re: Going out on a limb for a prediction

Hi Greg,

 

I've always said that the ethanol induced ag boom could end with a bang rather than a whimper.

 

Hope not but we did overpay our politicians and lobbyists.

 

fwiw, h

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Senior Contributor

Re: Going out on a limb for a prediction

"American farmer" can no longer feed the world.     ----    Do you think you guys are the only ones who produce food for the world.  Wake up comrade. Have you ever heard of Chine, India and Europe who export grains around the world?  If we waited for the subsidy ridden US farmers to feed us, Kenya would be a food fest.

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Senior Contributor

Re: Going out on a limb for a prediction

You should contact all the LLC's contructing hog units in our area about your prediction. 14 proposed such facilities in Hancock Co Iowa. When you consider the value of the manure but also consider the value of applying, doesnt seem to be much value left compared to commercial fert. And you don't have to "mud" it in cause the pits are full.  MikeM

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Re: Going out on a limb for a prediction

As to Belarus' post- still true if we blow this crop up. But also true, in my view, that we're still set up for a boomer if it begins to rain. Soon, though.

 

On contact buildings, I can recall getting the spiel on contract finisher from a fieldman for one of the integrators back in the mid-90s- not only could I pay myself $10 hr for my time if nothing went wrong but I also got the additional bonus of the manure. Back then it was very much a "gee, thanks" deal as even the most efficient application setup wasn't any better than a breakeven.

 

Not quitte as true today but certailny the advantage goes where you're setup to hose drag it in with enough ground nearby to handle it.

 

Looking back I don't feel bad about passing although you could build pretty good 1000 hhd tunnel bldgs for $150/space and with one major remodel they would probably still be operating although approachig the end of their useful life. I'd also be approaching the end of my useful life for that kind of work anyway.

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