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Senior Contributor

American farmers need to remember ...

It’s Monday afternoon here in Korea, and after a week touring Korea I’m being reminded again after a few years of an important lesson, namely, there are millions, billions of people in the world, intelligent well educated highly productive people living in modern cities, working in modern agriculture who can very easily get along just fine without the United States or its agricultural production.

  Americans make big mistake if they think for one second, the world can’t get along without us.

  And this trade war is going to prove it.

19 Replies
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Senior Contributor

Re: We need to start thinking about what’s coming.

We need to start thinking about what’s got to happen in the next few years in order to get supply & demand back into balance.

First we need to lose 22-25 million acres of soybean production to account for the loss of the Chinese market.

Second, we need to lose upwards of 10 millio acres of corn to account for the loss of a billion gallons or more of ethanol demand.

Third, we need to lose a considerable amount of milk production.  And apples, and nut crops, etc, etc.

  The attrition is going to be extensive and painful.  It makes you wonder who it will be, the low cost producer who doesn’t have debt or  the high acres operation with big new machinery.

  

Honored Advisor

Re: We need to start thinking about what’s coming.

Sure just go back to the road to China serfdom for the larger US economy buy $400 Billion MORE  trade deficit in Walmart crap and MAYBE or maybe not depending on price, China will buy 1 billion bushel of beans ($10 Billion worth total).   I don`t recall if it was 3rd or 4th grade math this stuff was taught, but most first graders understand $400 Billion is alot more than $10 Billion. 

China is in really tough shape, some "gold bugs" are in bed with the American Left hoping China will crush the US economy so their yellow metal will increase in price...I`m thinking "firing squad!".   I`m a "gold bug" but I`m an American first!

One example of desperation is the Chinese government shutdown the trick of wealthy families moving wealth out of China by sending it to their exchange student in Vancouver, who would purchase investment properties, buoying the housing market.  Cant` do that anymore, no more wealth flight from that "ghost city country", all hands on deck to prop up the crashing Renminbi.   

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Senior Contributor

Re: We need to start thinking about what’s coming.

Isn't it any wonder that some of this demand destruction comes from a president that is and always has been a liberal democrat and implements policy that Bernie Sanders would be proud of?  How about we go back to free trade?  Admitting it is sometimes one sided.  China not abiding by contract law! But it is not an industry(agriculture)that is causing the problem.  Why should we be forced to suffer for it? Not sure what the answer is.  Democrats are worse yet.  But his fawning of an idea(tariffs), that will maga, and we should go, fight, win, is delusion on a grand scale, and shows how dumbed down the electorate really is.  The voter can be manipulated by the press and powers that be, very easily. But I digress.  We need to end the tariffs, and tell trump to take a hike!  Only then can we start to deal with what is coming.  Sorry to make this political, but politics is what is causing it!

Honored Advisor

Re: We need to start thinking about what’s coming.

China is the one that is weaponizing food, their economy is crashing and are looking at another Tiananmen Square if Hong Kong protests spread. Food prices rising in China, pretty soon  Chairman Xi will be asked "A tariff on cheap US soybeans, why???".   Xi`s gamble of a "Democrat rolling back trade policy" isn`t a sure thing, most Dems are not exactly critical of what Trump is doing,  (non are campaigning on flat out ending tariffs) .  Trump actually stole a Democrat issue on standing up to China, it`s just Bill Clinton and Obama were too much "republican" on the issue. 

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Senior Contributor

Re: All that tough talk isn’t going to ...

All that tough talk isn’t going to do anyone any good when bankers start calling in their loans.

And it isn’t just China; Japan, Korea, the EU, India, etc are getting sick of Trump’s bullying talk.

All trump has succeeding in doing is to make the US the completely dispensable nation as opposed to the indispensable nation.

But don’t listen to me, more than a year ago I saw this coming because trump’s policies are based on a fundamental disrespect for people, particularly people from other cultures.

Honored Advisor

Re: All that tough talk isn’t going to ...

China never did respect us, it`s time they fear us.   All this because of their "save face" crap because unless they take advantage of us to the 10th power they throw a hissy fit and "show us" by what will probably result in starving their people.  I really feel sorry for the Chinese people, they are the pawns in all of this, all because of Xi`s ego....yeah yeah yeah "trump`s ego!", Trump brought up a imbalance of trade that Ronny Milsap and Stevie Wonder could see, if China was reasonable there is much much room for negotiation and they would still be a winner by a factor of 3.  

Image result for all the friends money can buy

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Veteran Advisor

Re: We need to start thinking about what’s coming.

It’s not so much who it will be as where it will be, and what will the acres transition into?  Here traditional wheat acres are moving to corn or milo (dry land) while declining water tables are leading to less irrigated corn. The irrigation outyields dryland 3 or 4 times so I don’t know the net effect on production here. Each area will have its own story 

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Frequent Contributor

Re: We need to start thinking about what’s coming.

There's some talk of a return to supply management by some of the primary campaigns.

For this administration I assume nothing much is going to change-  expect continued Stormy payments, though.

I think that it would be a mistake to give farmers anything without something in return of a green nature. Which I think farmers could easily live with.

Or could just let "the market" play out. After all, farmers are victims of their own folly.

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Senior Contributor

Re: All that tough talk isn’t going to ...

Rick,

Totally agree with you!

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