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04-10-2017 12:56 PM
just for grins......imagine if we had a "food program"........if a country was in need.......we would supply food.......wheat flour, corn meal,
soy oil or soy protein (textured veg protein)....we would have in in bags/packages, etc, plastered with the American flag......
not only could we use this to help our ag economy.........but general economy by providing jobs......and helping those in need,
Yes, this sounds noble and good, but what if you were a farmer in one of those countries... Probably subsistence farmer eating much of what you grow yourself, and hoping to sell the rest for a few dollars to buy other necessities.. Now "Uncle" comes along providing free food to those who were your customers, and there goes what little income you had. Remember how US farmers griped when the chicken and pork people in SE brought in corn and beans? And it wasn't even free, just a bit cheaper. A pretty similar scenario in many ways.
04-11-2017 06:27 AM
For better or worse probably stuck with it since we created a whole new herd of sows with their forelegs in the trough (the crop insurance "industry").
Probably only going to see some modest adjustment to the insurance/countercyclicals formula.
04-11-2017 07:18 AM
Time, IMO the government needs to stay out of farming. Let capitalism do its job. We can do without CRP, checkoff programs and subsidy checks. It might take a few years, but eventually things would balance out. The big kicker would be that Americans would finally know the true cost of food.
04-11-2017 12:11 PM
Agreed Sandy....but that will be painful for all, and career altering for some. Pain is forbidden in these times.
Silver...it will happen, and you will not be glad when it does. Yes, our conservative lifestyles and preparation
will make us better off than average, but no one escapes an economic reset. Just ask the guys farming
in Argentina who have bought their land back from others after it was nationalized 2 times since WWII. Or, if
you still can, spend some time with someone who capitalized on the depression, buying land for basically
free in the mid-30's. No one I ever talked to enjoyed it. No one likes to capitalize on destroyed lives of their
neighbors, well except a few uber-socialist.
04-11-2017 12:23 PM
Thank you for the excellent point Clayton. We have a share in a farm in Haiti. The US Rice giveaways have virtually destroyed the industry 3 times in the last 6 years. Last time I was there, the fields were full of ripening rice, and the road sides were clogged with skid after skid of US Rice.
Just imagine if every time corn gets above $5, Brazil could dump a few BILLION bu of free corn on the domestic market here. That is our rice policy. Anyone growing rice has plenty to confess this week. :-)
04-11-2017 01:31 PM
It has been our policy on foreign aide with many commodities. The Haitian example is a very good one. The outcome is never the intended.
I don't blame canada for curtailing imports of dairy from the US for a while. We are running over with cheap milk and it has to be hurting their producers.
It is the capitalist process. Scaling back production never happens without some pain. But if allowed to work our industry will be much more diversified and flexible to survive. And with time we see what we see now. supplies trimed, basis improving, and exports booming.
One problem is our over zealous government has trimmed the number of participants in the market place too far.. Competition has beed reduced so capitalism works more slowly than it should.
04-11-2017 03:29 PM
Agreed! At 55 I am just trying to decide if I will see the reset! Oh yea, it will happen within 23 years, right? We might not make it 10 years!
Just about bought a 139 acre farm for $9000.00/acre April 1st! But a big dairy would not quit bidding. So, maybe I am better off buying for $3000.00 an acre during the next reset!
04-11-2017 06:26 PM - edited 04-11-2017 06:27 PM
The crop insurance program (FCIC multi-peril) has been around a long time. Some of the more recent developments, for better or worse, that include higher percent guarantees available, revenue coverage, trend yields, removing the lowest yield from guarantee history, etc., have tweaked the program for added payout frequency, amounts, and therefore costs of the program. The program was expanded to hopefully eliminate the ad hoc disaster payments. It was never intended to guarantee a profit.
The more recent addition of the shallow-loss coverage thru FSA, and/or the ARC/PLC, have added another layer of costs, while increasing the potential producer coverage.
All of these things provide a more dependable safety net, while all of these things also make it harder to fail, as a farmer, and thus also represent a barrier to entry for newcomers. While dollar limits normally apply to all other USDA programs, including the previous disaster programs, there are currently no limits on the total premium subsidy dollars available to each farmer, it is solely determined by the acres insured at applicable guarantees,
04-12-2017 07:53 AM - edited 04-12-2017 10:51 AM
Silver...139 acres at 9k, you certainly can be committed! :-)
The dairy guys always amaze me. They are all going broke supposedly, but always bid land into the stratosphere. Maybe the gov support programs work better than all the complaining?
In the long run it really doesn't matter what you pay for the dirt, as long as, you never are forced to sell it at the wrong time. The currency is racing to zero, so if you just hold it 20 years, it will be at 20,000 just because the currency will decline another 50%, and that is WITH NO RESET.
The chart of the price of wheat in Rubles, or beans in Real, is very instructive about how currency declines shift the currency value of things. Beans made all time highs in Real's this winter. Wheat is right at all time highs in Rubles.
One of my initial reasons for the posting was to point out the ludicrous cost of production numbers they are using to drive the program. 4.40. A lot of our peers on the website are under 3.50. So, this program would guarantee them a 26% ROI. Nice if you can get it, but clearly the cost would be astronomical.