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sdholloway56
Senior Advisor

Re: Lack of Marketing, OK, give us an example, why not?

Sonny was sort of the pathfinder on this. 

If your policies screw everything up you just shovel out money to keep 'em happy.

As they're now doing with real estate magnates, bondholders, corps etc.

While whining like crazy about people who haven't earned it getting a pittance.

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BA Deere
Honored Advisor

Re: Lack of Marketing, OK, give us an example, why not?

Okay, telling a Liberal what they don`t wanna hear results in crickets, but I`ll lay some facts on you.  It wasn`t all rosey before "Sonny`s policies".  This is a historic cash corn price in Iowa by month starting in 2016 when "Hillary was still a shoe in", sourced from Iowa State.

https://www.extension.iastate.edu/agdm/crops/pdf/a2-11.pdf

2016 3.55 3.48 3.46 3.52 3.60 3.75 3.55 3.08 3.08 3.30 3.20 3.27 3.40 3.30
2017 3.34 3.39 3.43 3.34 3.39 3.35 3.40 3.19 3.21 3.23 3.14 3.20 3.30 3.31
2018 3.24 3.33 3.43 3.52 3.57 3.54 3.41 3.27 3.29 3.40 3.40 3.52 3.41 3.59
2019 3.52 3.54 3.57 3.51 3.59 3.95 4.11 3.91 3.72 3.79 3.64 3.70 3.71 3.80
2020 3.78 3.74

--------------------------------

I wish someone would explain how you get to $5 corn or whatever your version of Nirvana with $20 oil and $2 gas...prize-winning bull ethanol has been turned into a steer, the rest of the world desperate for any source of cash plants any soil that holds up a plant from having a sip from the $7 corn punchbowl.  

The Russo-Saudi feud and US fracking boom has drown the "peak oil" conspiracy theories...you play the hand you`re dealt.  Do you suggest nuking our competition?  Anything short of that gets what we`ve got. 

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sdholloway56
Senior Advisor

Re: Lack of Marketing, OK, give us an example, why not?

The only way you can count "agriculture" as not a trainwreck is if you (probably correctly, based on history) assume that a) immediate generous compensation will be on offer and b) that the gubmint will put in a longer term fix.

 

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BA Deere
Honored Advisor

Re: Lack of Marketing, OK, give us an example, why not?

First we need to define what we want out of a "farm policy".  If all you want is "cheap food" to be "successful" then keep doing what we`re doing and export the surplus below our cost of production in exchange for importing items that we used to domestically manufacture.   

If it`s "save the family farm" well, first define "family farm", my definition of family farm it has been declining for the 50 years that I`ve paid attention.

 If you want to "save the family farm" have a price support, supply management program, this time with meaningful payment limitations and tariffs that would keep cheap Brazilian soybean meal out of Carolina ports.  As I`ve said many times kissing China`s butt by running a $400 billion trade deficit in hope they`ll buy $10 Billion worth of our soybeans produced below our cost of production makes no sense at all. 

If someone has a better idea, I am all ears.

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sdholloway56
Senior Advisor

Re: Lack of Marketing, OK, give us an example, why not?

I've been all ears for a couple of Farm Bill cycles as far as figuring what there's an appetite for among the participants.

Generally, it is "get the gubmint out" until "Please Mr. Wizard!"

I really don't have a concern that food will "get expensive" if a degree of financial stress was to be experienced across agriculture greater than what's been experienced in the last 20 years.

There's really not a great deal of "rural development" in supporting the current structure of agriculture, but there's some. So there's that, as far as the communities go.

As you know, the actual practice of meaningful payment limitations is tricky. Partly for real reasons- there are a great many different business structures and it is hard to allow for them in policy. And of course anything you'd do will produce an industry that devises ways around it.

Being an old Republican (meaning a conservative Democrat today- Republicans are all nuts) I'd suggest going back to F2F. Give 5 years of declining transition payments to 0 in the 6th and write into the legislation terms that make backtracking very hard. Change the rules to make 15b/g/y of ethanol hard and fast (you'll need to talk to the Kochs et al about that) and then let the chips fall where they may. If this year turns out at the far range of bad as far as carryout goes, might do a couple years of acreage reduction in order to make a transition less brutal.

Any additional payments would be for purposes of broad public interest- green things come to mind primarily.

Farmers would have several years to adjust to a freer market, which is only fair. 

 

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BA Deere
Honored Advisor

Re: Lack of Marketing, OK, give us an example, why not?

How about if we put it to a vote of producers that have been in the program 3 questions: "Do you want the gummitt outta farming?"   "Agriculture is a wreck so stay in farming?"   "Agriculture is wreck so git outta farming?".  And if over half say "git outta farming" then git outta farming and the issue is solved.   I don`t care either way, it`s just if there`s a majority that can farm at these prices on their own (and they are out there) well, maybe they should raise the food?  I`ll get by with whatever the majority decides.

Payment limitations is made unnecessarily complicated ...on purpose,.  Just have producers sign on the dotted line "My operation consists of only entity receiving payments.  Signing falsely will be subject to penalties of perjury and defrauding the United States Government.  Subject to spot audits" ....there, payment limitations are solved!

The argument can be made that when there`s a handful of producers that food will get more expensive.  The one farmer in Iowa will wink & nod with the one farmer in Illinois that the "crop doesn`t look so good this season" and they may be vertically integrated with processors.  Look at the beef situation 4 packers control 80% of beef and they make $600/head profit.  The cattle feeder and the consumer both take it in the shorts, that`s what happens when industry gets too consolidated.

 

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sdholloway56
Senior Advisor

Re: Lack of Marketing, OK, give us an example, why not?

It gets too concentrated you break it up with a combination of anti trust and inheritance tax.

Problem solved.

 

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BA Deere
Honored Advisor

Re: Lack of Marketing, OK, give us an example, why not?

Yup, I bet the heirs are just sitting around waiting for oldman Smithfield, oldman Tyson and oldman Hormel to croak, then we`ll go back to 100 independent packinghouses.  

Punishing the wealthy family with 1,000 acres isn`t going to accomplish anything.

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sdholloway56
Senior Advisor

Re: Lack of Marketing, OK, give us an example, why not?

That’s not what you were talking about.

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BA Deere
Honored Advisor

Re: Lack of Marketing, OK, give us an example, why not?

The reason food is cheap in the US now is because small farmers are willing to "burn equity" ..."making themselves a job" tending cattle raising crops.  The big guys or what`s known as "big" currently get by buying in volume and selling in volume and avoiding the middlemen.

There will come a point where the landlords won`t be in the driver`s seat and perhaps have to beg 1 of 2 area farmers to rent their ground.  Coop elevators won`t be every 10 miles, it may have be hauled 200 miles directly to a processor.  The producer/farmers that are left probably won`t bother with small parcels that aren`t pattern tiled and contiguous to their larger tracts. Contracts will be offered on only what`s needed and there will be little incentive to chase more acres and production.  As it is now, everything gets planted, there`s always a "greater fool".

Processors never run out, there`s always too many hogs (add a Saturday kill) too much corn (widen the basis) since the raw commodities are plentiful, the illusion of savings is "passed on to the consumer as the farmer`s expense". In the future the fewer farmer/producers will have more clout and that cost will be passed to the consumer. Anyway as I see it.

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