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Honored Advisor

Big Bang of the Bull Market.

And on the first day the market was null and void...and then there was Light in the fall of 2006. 

Here is a transcript of Tom Pitzenmier on Market to Market with the great Mark Pearson...it`s forgever etched in my mind those words of "let your combine sit out, fill your bins and wagons and stick them in the machine shed, because higher prices are on the way.

http://www.iptv.org/mtom/story.cfm/marketanalysis/5803/mtom_20060922_3203_marketanalysis 

 

here is the Market Plus

http://www.iptv.org/mtom/story.cfm/marketplus/5800/mtom_20060922_3203_marketplus 

 

Later at President Bush`s State of the Union in 2007 he called for "35 billion gallons of alternative fuel".   At about 17 or 18 minutes, this isn`t the video that showed Senator Grassley, but I recall him almost falling out of his chair with excitement.

 

https://www.youtube.com/watch?v=wCDDzFJQO9M 

I just need to editorialize a bit here ...God I miss George W Bush!!!  We didn`t know how GOOD we had it!  I just want to rewatch all his state of the Union addresses to relive the better times...but I digress.

 

You know, in the fall of 2007 we got $3.50 hot off the combine?   Think back, Nitrogen 28% was  probably $160/T..half what it is now and dittos for MaP and Potash.  Seedcorn was half, probably $150.  Our expenses were basically half with about the same cash corn that we have now.

 

Back in those glorious months at the start of the Bull, I recall a couple gurus on WHO Big Show telling Mark Pearson and Ken Root that "Whatever your question is, the answer is ..Ethanol!"  and they were wagering if the government would open up the CRP acres at 1:00 today or 3:00 today, to produce the "14 billion bushel of corn DEMAND" that was apperently baked into the cake at that time.  Funny this is probably one of the few years we may hit 14 billion bushel of production and here the prices are tanking.

 

Anyway just a stroll down memory lane.

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28 Replies
Highlighted
Veteran Advisor

Re: Big Bang of the Bull Market.

Well, it might take until spring, but if prices stay similar to where they are right now, Fert, Chem, Seed, and Land WILL work their way down to 2006 levels as nobody has repealed the laws of supply and demand yet, and if you let the markets work, they will work. If you push your pencil and don't show a profit, you need to be patient.....unless you are doing everything wrong, and your competitors are doing everything right, they are in a similar boat, too.

 

Landlords are not deaf and dumb, and they can see the difference between $7 corn, and $400 rents, and $3 corn and $200 or less rents.Talk to them and show them the numbers. The same can be said for the seed, fert, and chem companies....they already know that they cannot sell their products for what the market was a year ago. If they don't, they are dumber than a box of rocks.

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Veteran Advisor

Re: Big Bang of the Bull Market.

2 comments.
As for "the law of supply and demand has
not been repealed" yes it has. The new
Marketing rule is, if you don't sell it,
Mark it up, because we have fixed cost
To cover, so we have to make more on
The few things we sell

The second comment is about the box of
Rocks......there are many boxes of rocks.

Things no long work the way they are
supposed to.

The laws of economics were written before
Corporation. America got so big and powerful.
Also the multinational part of corprtate operations.

Prime example. Example is the theory
Is prices should go down....it would if
It was a mom and pop store, they
Depended on the local economy ....with
Large corps they can offset by operations
in other locations, or even industries.

As for demand....we will still by fertilizer,
Buy chemical, and seed. There is a small
Finite supply of the "first generation" inputs.


They will still sell the expensive stuff....and
If you think that corn is 3 beans are 9
And wheat 4, they are going to cut the
Price, I think you need to crawl in the
Box with the rest of the rocks.




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Highlighted
Senior Contributor

Re: Big Bang of the Bull Market.

Wow, elcheapo....my head is spinning with things I want to say to that. Not sure where to start or if I should....I do believe however, that one can make a conscious choice not to let others control your life or livelihood.
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Veteran Contributor

Re: Big Bang of the Bull Market.


@Jameshh1964 wrote:
Wow, elcheapo....my head is spinning with things I want to say to that. Not sure where to start or if I should....I do believe however, that one can make a conscious choice not to let others control your life or livelihood.
So do you believe that corn seed will drop significantly?
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Highlighted
Senior Contributor

Re: Big Bang of the Bull Market.

No idea about the particulars of a given variety of seed. I know if my growers were asked to plant Strider barley and the seed was a dollar/lb., they would tell me justifiably to take a hike and then plant another barley.
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Highlighted
Veteran Contributor

Re: Big Bang of the Bull Market.

Barley?  I can grow my own barley seed! 

 

I asked about corn seed!  This is quite a different crop to grow....

 

Corporate seed companies control the seed business, and multi-nationals the fertilizer business for that matter.

 

They are not about to take a hair-cut, unless they absolutely have too.  That is what elcheapo is talking about.

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Highlighted
Advisor

Re: Big Bang of the Bull Market.

I think I need the smart stax traits cause I always get cutworms in the double pro versions.
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Highlighted
Honored Advisor

Re: Big Bang of the Bull Market.

Farmerguy, do you plant corn on corn?  I know a CoC guy that goes with conventional hybrids but fudges the label rate with Capture LFR and seems to get by.

 

Governor Terry Branstad, the best cheerleader that the farmer ever had, blames the EPA for messing with the Renewable Fuel Standard using outdated production figures.  I think the Ethanol usage percentage should be tied to the production that ProFarmer and USDA SAYS we will have.  I don`t know what the exact formula should be, but 15% Ethanol at this point should be mandatory.

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Highlighted
Senior Contributor

Re: Big Bang of the Bull Market.

I use a generic Bifenthrin (Capture). It has almost twice the active ingredient and a quarter of the cost. Mix it half and half with water before dumping it into starter fertilizer and it will stay suspended. No cutworms on any ground. One rough piece has been in corn for 8 years and doing well. I just swap varieties around every year on that field. Save that dollar!
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