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elcheapo
Veteran Advisor

Re: Can You Handle The Truth?

well, I'm going to try to repost what disappeared...........

BA........the butcher has freezers, and grain traders have grain bins.

 

BA I see the problem.........we must have the answer NOW

 

EVERY day I hear about the end user, the market people talk about it all the time, we are told we should "reward the market"...

we are told how the market works, we are told things like "the market is always right".........talk about a brain wash en mass !!!!

they have us dancing for a few pennys.....people we are grown men and women......are you serious....a penny or two ???

you can't even buy penny candy !!!!

 

here is the gods honest truth that we just can't get in our minds because we have been so conditioned not too........from the trading

firms on down...........

 

you are soo worried by those end users...........consider that.......we are so concerned what they will GIVE us..................

 

we are so fouled up it's not funny.........

 

we take what we are offered...............why, because we are told "we have to".......not true........

 

look at the seed dealer, fertilizer deal, fuel supplier, John Deere dealer.....they will pay what we want, because they (the farmers) have

to have it........

 

surprise..........so do the end users !!!!!!!!!!

 

go ahead and tell me about how much grain there is in the world....fine.....go ahead, you think it's so cheap there, do it......import it !!!!

 

as I stated in an earlier post, a bu of corn into western ks from south America is $7.39......I think it would be similar if

not more in other places.....

ok, scare me......."we're not going to pay you much because there is plenty of corn in the country".......

 

ever hear the saying "water water everywhere, but not a drop to drink".........well maybe that's about like the corn......yea there might

be piles, and a few bins full, but it you needed at a still site or feedlot.....you need it, but just because you need it, and there is plenty

around does not automatically (as we are told several times per day), that the price must not go down........no it doesn't, we

don't have to sell......you, the end user are the one needing it........

fire, scare me, tell me you are going to import it.........be my guest.

as someone said, we need to stop worrying about maxing out profits, but min our losses..........perhaps that's what the end users

will need to remember.....but we have been brainwashed so well, that we think that the end user must be taken care of.

you know, what's good for the goose is good for the gander.....let them start to worry for a while about profits......

 

lets look at it this way........the feedlots, and still.....the only way they can make money is if they get grain......they don't get grain, they

make nothing. they are in the business of making money......understand their business is upside scalable.......unlike ours...

they can raise their prices to their buyers, we can't........so, they have to have the product......so if the feedlots or still starts to

holler, just tell them, fine.........just import it......you keep telling me there is too much grain.......well, there could be too much grain,

but we're not going to sell due to the low prices.....we don't really care if there is a over supply, the cost to you is xxx..........

 

does that sound fimular ??   such things such as seed, fertilizer, checmicals, jd equipments and parts, etc.......

 

so, why is it ok for all of our people that sell to us, and the end users, can do that when there is a over supply......yet we can't

because we have had it beaten in our head....oh no it will not work........why not ??????

 

grain prices should be 50% higher........it its so much cheaper to import.......be my guest........you keep telling me why the

price is so low, but you will not import it, where they have such a huge supply.....they are not serious, because if they did it

would be twice as high....

 

now.........some will point to a year or two how grain was imported into the US.....yes it was......it it was "feed quality"......the initial price

was about 50% less than the class of grain we sell in the county.........it was good to scare some people.

 

you know steven Hawkins is scared silly of artificial intelligence.  the reason, that the robots will become smarter than we are, and will

see how wrong we are..........and they just might take care of that problem........

 

I think that is the same here, the grain industry, does not want the robots to figure out that the whole market is a joke, and all

the things they say, is not true.........the fear the day will come when the farmers will stand up and say, fine, you don't want

to pay our prices, import it.

 

so, what do you say Watson ?

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JimMeade
Veteran Advisor

Re: Can You Handle The Truth?

Elcheapo, I can't believe how complicated you make things just to pretend events are the way you wish they were.   It seems to me if you spent as much time marketing as you do dreaming up conspiracy theories you'd own the Board Of Trade.

elcheapo
Veteran Advisor

Re: Can You Handle The Truth?

Tell me where I lied or where I'm wrong.

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BA Deere
Honored Advisor

Re: Can You Handle The Truth?

ElCheapo, I`m not anymore worried about the endusers than they are about me...and that ain`t much.  Back in oh around 2010 corn was high and Sparboe had a letter up by their eggs in Hy-Vee "Boo hoo hoo we gotta charge you more for our eggs because corn is too high because of ethanol...don`t blame us, blame ethanol...boo hoo hoo write your congressman boo hoo hoo"   I look at it and laughed and said "suck it Sparboe!" 

 

 

But that`s the way it works, a dime`s worth of grain in a $2 loaf of bread or $4 box of cereal and if grain goes up a little they blame the farmer, not the fancy half empty cereal box.  Well even a feedlot if they have 70 bushel of corn in a steer a $1/bu extra`s only $70 and Pfitzenmair says they can lock in a $200 profit now.

 

But yeah, build bins and store and eventually you`ll be right, just store until the price goes where you want it...Uncle Sam`ll take half your big check but by golly you twisted the enduser`s short hairs.  Most of us have a stack of bills and can`t do that, so we have about a year window to market and we are teased with $10 beans in December before we`ve even ordered the seed ....and then they yank the rug out from under us!...end up giving it to `em for $8 off the combine in the fall.   Oh a carnival barker will promise us riches if we subscribe to his marketing advice, "All it takes is some puts and calls and margin calls and you`ll get your $10 beans back Sonny! I promise."

 

Farmers are like this I Love Lucy clip

 

https://www.youtube.com/watch?v=8NPzLBSBzPI

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rawhide
Advisor

Re: Can You Handle The Truth?

Bravo! BA. 

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JimMeade
Veteran Advisor

Re: Can You Handle The Truth?

BA, my experience is bins pay two ways.

1.  They make it much easier for me to harvest, as I store off the combine.  Faster and I retain flexibility as to where I sell them, as I don't have to pay an out charge to the storage facility.

2.  Bins let me take advantage of typical seasonality.  For example, I can pay for a bin (and more in most years) by storing from Sep/Oct until delivery at the river the end of Nov/first of Dec.  Corn seems to go better around planting time next year.

 

Bins pay most years in money and every year in convenience.

 

If a person uses bins as an excuse to not sell the crop, that is not what they are for and not their best use.

JimMeade
Veteran Advisor

Re: Can You Handle The Truth?

elcheapo, for one thing, you go on a diatribe about how it's not really cheaper to import corn into Kansas from Brazil (or whatever your example was).  People seldom are going to find it cheaper to do that. 

Corn goes to:

1.  Feed

2.  Ethanol (including DDG back into feed)

3.  Industrial uses

4.  Exports.

 

Exports is usually the place where the competition occurs, not in the first 3 for the most part.

 

Shipping corn to Kansas is not the issue.  Shipping corn from Iowa or Brazil to China or Egypt is the issue.  

 

Think of it like a household budget.

 

Feed pays the rent

Ethanol pays the utilities

Industrial uses pays the grocery bill

Exports are the profit or savings - the movies, the vacations, the new car

 

The first three are often (we hope) fairly predictable and more or less constant on the demand side.  The last one is the one that is subject to fluctuation on demand and that is where the price volatility comes home to roost.

 

Yes, this is a gross simplification but it is generally true.

 

You examples should reflect reality, not the threat of Brazilian corn in Kansas.

 

 

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elcheapo
Veteran Advisor

Re: Can You Handle The Truth?

Have you ever stopped and considered that MOST
Of our production is used here, and on average 20
Of it is exported....that 20% is usually setting the
Price.

Telling me "how things are" has nothing to do with it.
You keep missing the point

We are kept being told there is too much grain
In the world, or too much even local.

Ok then...you will not pay up, due to that
So called fact....fine, you think there is so
Much, bring it in.
You will find that so called surplus you keep
Telling me, is going to cost you....

They need the product...they have to have
It, just like we need seed, repairs, fertilizer.

Yes you think we should operate different.

It's starting to sound like all the companies are
Here to help you...we are told how much it costs
To develop a new hybrid or chemical, or how
Much the local fert company, elevator has "invested"

They do it to make money...

They know we need it, and how many times have
You gotten sticker shock from their prices, and
They freely tell you,. Well you can go somewhere
Else if you don't like like the price.

Yet, when I say well you don't like my price then
Import, I'm the fool ?

You tell me when importing Grain is "not done"

Why not ? It's legal, and we are told there are huge
Supplies of grain...just why don't you use them.
You think things are cheaper somewhere else
And you keep hitting me over the nose with
It, fine, go get it.

I can tell you something that's going to happen this
Year that will prove the point.

There are high odds that here wheat will be in short
Supply this year.....I want you to pay me $1 every
Time it will be broadcast that there are ample supplies of wheat in the world.

I'm so sure of that that I'll go to the dealership to
Get me a new pickup
I'm not that mean, they have a couple of carryovers
That will be cheaper for you to write the check
For....I'm not that mean I understand you have
To live
Unlike the seed, fert, chem, equip, and grain
Feels....they could care less that you are broke
Just as long as they get their money

What's good for the goose is good for the gander.

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clayton58
Veteran Advisor

Re: Can You Handle The Truth?

 as was mentioned earlier, most of us cannot hold crops indefinitely.  So its not South America that sets the price of corn in Finney Co, KS  Its the farmer down the road who needs to sell corn to make the land payment, or the tractor payment, or maybe the health insurance premium ( I just had to through that in)  or just to put groceries on the table.  Point is there are enough sellers of grain that no single person can set the asking price

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sw363535
Honored Advisor

Re: Can You Handle The Truth?

Jim & Clayton are right on.

Just recent I see a mention again of large volumes in bins owned by deep pocket farmers. I discount that comment every time.
It is a disconnect from reality.
More likely the last guy to sell is also one of the first to sell. The biggest return from bins is handling volume. Selling 300% of volume per year is profit.
Selling 50% of volume /yr is not good at any price.

Binsonly make marginal return.
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