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11-11-2018 02:41 PM
11-11-2018 03:22 PM
This is all very interesting information. Thank you. Its an interesting take on the government intervention in agriculture, they give with one hand and take back with the other. They pay subsidies to make sure farmers can stay in business, yet those same subsidies take away the profit potential for the farmer because they keep farmers in business who otherwise would have failed, which keeps the supply of crops high enough to keep prices from rising.
Its an interesting dynamic. In essence, by taking subsidies, the farm community gives away the ability to make more money in exchange for getting the insurance that they will not go out of business. Its a shrewd play by the government, the subsidies ensure that there will be enough farmers in the industry to keep supply high and prices stable at subsistence levels for the farmers. What's most interesting to me is why so many people go into the farming business, knowing that these government subsidy programs will prevent them from having the opportunity to improve their standards of living ?
The stories about the farmers having to pay for the advertising and promotional costs of the processors are another point of interest. I can understand why they ask the farmer or rancher to kick in money for this effort, as it benefits them to have the consumers buy the products they grow or raise. Its not fair if the farmers are assessed a much larger portion of those costs than the processors.
I have written several times about how I feel the farm community needs to work together to lobby the government for programs that will help farmers. Your idea of a grower's association to control supply is a good idea. Unfortunately it probably won't happen, because it will be hard to get a consensus about reducing supplies. And even if you were able to do so, the government then would walk in and say you are price fixing, and they will claim that is an illegal restraint of trade. But I think that there are other objectives that a grower's association or a farmer's union would be able to accomplish for the benefit of farmers.
But in the end, considering the difficulties of getting farmers to agree en masse with any proposal, I think the only way you have a chance to gain control of pricing back from the government is that you will need a real washout that puts a lot of farms out of business. The survivors then will have more reasons to work together, and the washout of the industry would give the survivors a good 20 year window where the number of working farms will be low enough for product supply to be reduced and crop prices to rise. Its always darkest before the dawn, and sometimes its the extreme near-death experiences that give rise to new ways of thinking.
I looked into that question about corn flakes. It turns out that the producers did bring the price back down when corn prices were cut in half. In fact, Corn Flakes today sell at a price not all that different from 10 or 15 years ago.
http://www.foodtimeline.org/foodfaq5.html#kelloggs provides an historical timeline for the price of Corn Flakes over the last hundred years. You have to scroll down almost to the middle of the page to see the table. In 2000, the 18 ounce box of Corn Flakes sold for $2.99, it rose to $4.19 in 2014 as a result of the higher corn prices from 2012, and now sell for $2.93 at Wall Mart.
This does not surprise me. When prices at the producer level have risen in America during the last 30 or so years, its rare to see the entire increase get passed through to the consumer. Retail competition is so fierce that the rise in inputs prices often is taken out of retail profit margins rather than passed on to consumers. On the other hand, when prices fall at the producer level, the competition at retail almost always forces consumer prices to fall in line with producer prices. Companies make money nowadays off the backs of their workers, not their customers. They export jobs to low wage countries, they reduce payrolls by increasing productivity with technology, the dictate wage increases at will because workers for the most part are not unionized and thus have no bargaining power.
Only in the last two years have wages begun rising at more than 3% per year, and last Tuesday half of America said they don't like the guy whose economic policies brought about those wage increases.
The American electorate is no different than the American farmer...there are enough of those who are willing to cut off their noses in spite of their faces to prevent progress for all. That's what America has de-evolved into...
11-13-2018 12:20 PM
Well, you give the half of the country a cut in their taxes, then the other half of the country that doesn`t pay taxes is mad because they see it as a indirect threat to their standard of living, so guess how they vote? Then some have what Dad used to call a "license to steal job"...you all know the one`s high 6 figures or 7 or 8 or 9 + for doing bupkis ...take away half their income by 50% in taxes and they still make 100 times what they`re worth, well, they feel guilty, so guess how they`re gonna vote?
Then the social warriors they want laws that they can force wedding cakes made in their honor and the "right" to terminate unviable tissue mass a hour before delivery, so guess how they`re gonna vote?
Cutting people`s taxes and giving them a job isn`t the vote getter it used to be....some even hope for an economic collapse because they aren`t happy with election results. Really? some people would rather roast a rat over a burning trash barrel then have it good with the only catch being it isn`t the political power that they prefer that`s running things.....hmmmmmm
11-13-2018 02:10 PM
The funny thing about all that is if you look at an electoral map, all of the losers all seem to live in a handful of cities.Little blue dots on a red map. This is where the Republicans really screwed up when they held both houses of Congress and the Presidency from 2002 to 2004 and from 2016 to 2018...they should cut off most of the funding that Washington gives to those cities, and make the losers suffer for their stupidity.