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10-02-2018 10:55 AM
Well good for you if you're doing well, from what I hear from most corn farmers here and elsewhere they need somewhere between $3.75 and $4.25 to breakeven. So of course you are the exception to the rule.
Daily price movements don't really concern me, I am interested in the trend, the bigger picture. The way I looked at yesterday's price action, it was more of the same. Low volume, decreasing open interest. The people who should be selling onto the market at these prices will sit back and wait for prices to start falling before they give up the hope of higher prices. I will wait for them to unload before I pay attention to the ups and downs of intraday price movements.
Bottom line is there's a huge crop that has not been placed yet but will need to be during the next several months. Instead of hedging their risk, the producers are hoping prices stay elevated until they come to market. What they don't realize is that the shrinking participation as evidenced by Volume and Open Interest during the last couple weeks of market activity has not created a need for market participants to buy. When the crop of these producers finally hits, the market, prices will be overwhelmed and we will see the typical case of corn farmers doing a great jpb of growing their crop only to miss out on the payday they should have had for it because they refuse to employ the methods designed for them to avoid such risk.
10-02-2018 11:23 AM
We could also apply your concept to other areas.
Many people cannot afford a home.
Perhaps the government can buy up homes and then rent it to them cheaply.
That should work, right?
10-02-2018 11:33 AM
now your back in a position talking markets, something you profess to know about.
This is where you can be of service and maybe a little help.
We are not here for your benefit. BUT you never know when you will pick up a gold nugget or two around here.
Your socialist ideas will play better down in the "cesspool" (forum section )
10-02-2018 12:00 PM
What rock have you been living under ? There's an entire Federal government agency that does just that, its called the Housing and Urban Development Agency. On top of that, most States and local governments have housing programs for lower income and elderly people. There are several government agencies that make mortgage loans less expensive by using the credit quality of the US government to borrow money as cheaply as possible and lend it to homebuyers of nearly every income bracket. Have you not heard of the Federal Home Loan Banks, Fannie Mae and Freddie Mac ?
The farm community seems to be the only group in America that doesn't get help in owning or leasing land. perhaps because you have a lot of mistaken ideas of the role of government. Or maybe because you need to use a stronger sun screen.
10-02-2018 12:18 PM
Remember that rubbish about socialist ideas when you collect your monthly Social Security check, or bill your doctor visits to Medicare. You're the kind of guy the government loves, spend your entire life sending them money and ask for none of it back. Who is the real socialist here, me for wanting the government to earn the money they take from working people, or you who is content to work for the State without asking for anything in return ?
You really would do well on the comedy circuit.
Believe me, from what I have seen from you, its costing me rather than benefiting me to be wasting my time here. I came here looking for insight and wind up with you.
10-02-2018 03:45 PM
I'm not telling them what to do with their money. I've simply suggested some policy initiatives that will finally stem the problem of contracting margins in their business. All I hear from corn farmers is how difficult it is to make a profit in a market where prices continue in a bear trend while costs remain constant. I've suggested several initiatives that would help widen those margins to ensure that America's vital interest in the agricultural industry will be supported by a stable community of farmers earning enough profit to continue their fine work.
Considering no one else in either the farm industry or government has done anything to help these producers as corn prices fell from $8.43 to $3.01, it seems like a reasonable thing to do to suggest new ideas to keep these people as successful financially as they are in their farming work.
So why does that bother you so much that you would offer your opinion on it ?
10-02-2018 07:15 PM
Why don't you try reading what I wrote before asking me questions that already have been answered ?
I did not give anyone advice on how to farm, in fact I wrote I don't know the first thing about it. I offered advice about how to make the financial part of their business more profitable in an age when their profit margins continue to shrink due to constant costs with failing prices.
One strategy I suggested was to find a proven market adviser who understands how to hedge some portion of future production to allow for maximization of revenue. Hardly a novel idea as most of the large farming enterprises already perform this function, but most of the small farms - which represent over 80% of the US farming industry - do not. Rather than roll the dice each year with the entire crop, use bounces in the multi-year bear market for corn to reduce risk by selling some of the coming harvest.
The second and third ideas were policy initiatives that I think farmers would be wise to take up with their elected representatives, in order to gain some price stability for their crops as well as to lower rent or ownership costs of the land they farm. One idea is to have a price stabilization mechanism similar to crop insurance., that would pay farmers when prices dive for reasons beyond their control, and also evaporate when prices rise. This initiative would ensure that farmers do not suffer catastrophic losses when Black Swan events reduce the value of the crop in the field by a substantial correction,
The second strategy is designed to provide farmers with land to farm through rental that takes the profit out of the landlord business and allows farmers to reduce input costs significantly as their resultant rents will be significantly lower. Its basically taking the government subsidy programs presently in effect and using the subsidy money much more wisely and in a way that the American taxpayer gets the money back and then some when capital gains are factored in.
I leave the farming to the farmer. But if they are right about the financial difficulties that come with farming in America today, then they need some good advice and even better programs to save their profitability and to keep them on the farms feeding America and the world. I offered my advice as that's a subject I know well.