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Veteran Advisor

A taste of their own medicine ?

 

saw this story this morning.......i'm not so sure what to make of it.  on one hand, as i put on the subject line, the grain

dealers are kind of getting a taste of their own medicine.......but on the other hand, what happens when the buyers

are direct users, and they want to max out their profits........they chased the competiation out, they are the only one's

left, and they can buy at what they want.

 

http://www.reuters.com/article/us-smithfield-foods-grains-analysis-idUSKBN14J0FA

 

somewhat concerning that a foreign country is becomming so "embedded" in our system.....

 

with china now starting to flex some of it's muscle........a stink with russia, and problem in the middle east........and his economic

people are even pealing some of the projections back.........donald might consider calling for a recount himself !!

 

 

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Honored Advisor

Re: A taste of their own medicine ?

Only because you injected Trump into your post, I think of all those running this year that Trump is most like ol` Trust Buster Teddy Roosevelt.  So if big hog setups owning elevators is some sort of a negative, well Trump is the guy you want looking out for your back.

 

But, I`m not sure it`s a negative, there`s hog intergrators around here that buy corn direct for their feed mill and they usually have at least a 10¢ better bid.   With all the elevator mergers we have coops with 40 and 80 different sites...if you get mad at one set of elevators, you have to haul a long way to go to their competitors Smiley Happy  

Advisor

Re: A taste of their own medicine ?

There are at least two more logical steps in the process.  

 

No practical reason to take them at this point.  Not until the state of the grower makes them seamless 

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Honored Advisor

Re: A taste of their own medicine ?

We will get there ...... it is the course we are on.  

 

Elcheapo I think that is the reason behind the large negative basis... 

the guys in the middle are getting less and less bushels so to survive they need a bigger margin per bushel.  

When you see a picture of piles of grain in sw ks,  very often it is owned by an end user.  The pictures are used to explain the negative basis.  But piles of grain here have been common since the 1940's when farmers piled grain at the end of the field and hauled it east and south to better markets.

 

Bruce, doesn't it seem bipolar or ironic or something odd...... The changes in agriculture that are so interesting and exciting and yet are probably changing agriculture into something we fear.  Or at least would not choose...if we saw the final picture?

 

Bruce what are the two steps you see as left for agriculture to take?

 

 

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Honored Advisor

Re: A taste of their own medicine ?

Old people resist change and young people thrive on it...I can say that because I`m old  Smiley Happy a little over a half century.   The 1980`s were my happy place I was young strong back, weak mind, didn`t know any better.  But the changes in farming in just the last 20 years has been a major shock, more so than those that went from horses to tractors in the 1920s.   I mean 20 years ago most farmers planted crooked rows and still had to cultivate as part of their weed control.  The genie is out of the bottle and 20 years from now the changes will be even more shocking, either robots will do all the farm labor or we`ll be back to oxen pulling a wooden plow through the sod.

 

The Hefty boys wrote a book on "hiring the $5/hr jobs and doing the $100/hr jobs yourself" ...well the $5/hr jobs are now $20/hr jobs and most of us don`t have the diagnostic equipment and expertise to do the $150/hr jobs that used to be $100/hr jobs. Autonomous  tractors will work 24/7 without complaining, sick days or payroll tax.

 

Young people don`t want to go back to the 80`s, they never knew the 80`s, the vertical intergration model doesn`t scare them like it does us oldtimers..that`s not saying that it is a good thing, but they`ll have to try it out and learn their own mistakes.   But this is what you get with people hired to sit around and dream up ways to make things more "efficient".

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Veteran Advisor

Business Before Pleasure

Most of us grew up with agriculture as a life style.  Agriculture is becoming more a business.  Many of us dont' like it because we want to have our cake and eat it too.

Agriculture as lfe-style will become a very small niche in the economy.  Just as the big grocery stores are killing the little organic shops by adding an organic section, the family farm will get sucked up by someone with economies of scale the little guy can't match.

And the little guy's wife won't accept that level of income.

And the little guy can't send his kids to a good college.

 

So, my concluscion is that the mindset of farming as a way of life is what is hampering many of us who are on the farm now and will continue to do so until we get aged or financed out of the game.

 

BTW, the two big hog feeders near me pay noticeably less than anyone else for corn.  It probablyl is a good deal if you are very near them and have no freight.  But for me, 20 miles away, I get more money nearly every time by going to a processor.  And local feeders can be a hassle for truckers with the bio-safety stuff.

 

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