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Veteran Advisor
Posts: 1,504
Registered: ‎06-30-2010

Re: Harvest Report October 22

[ Edited ]

"That is a staggering number, nearly 30% of all business failures per year coming from the farm industry."

 

 

One more time --

 

- 500 farm business bankruptcies

- 25,000+ total business bankruptcies

- 500/25,000 = 2%

- Therefore, farm business bankruptcies around 2% of total business bankruptcies, NOT 30%.

 

- 500 farm business bankruptcies

- 2,000,0000 farms

- 500/2,000,000 = 2.5/10,000 = 0.025%

- Therefore, farm business failures around 0.025% of farm businesses, 1/10th of 1/4 of 1%

 

- 24,700+ business bankruptcies (25230 - 500 = 24730)

- 28,000,000 nonfarm businesses (30,000,000 - 2,000,000)

- 24700/28,000,000 = 8.8/10,000 = 0.088%

- 8.8/2.5 = 3.5

- Therefore, nonfarm businesses fail at a rate of around 3.5 times the rate of farm businesses

 

At least to me, this describes a much different perspective than you have presented.

 

[Added -- and "farm businesses" include a multitude of not really comparable individual businesses, large and small, crop and non-crop, animal and non-animal, diversified and non-diversified, inputs and production, producers and buyers, commercial and subsistence, organic and non-organic, food and feed, price-setters and price-takers, etc., along with various overlaps, integrations, etc.]

 

 

 

 

Honored Advisor
Posts: 8,647
Registered: ‎07-18-2011
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Re: Harvest Report October 22

A knot head
Veteran Contributor
Posts: 485
Registered: ‎09-20-2018
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Re: Harvest Report October 22

Your math is wrong because you are not comparing equal sample sizes and that is distorting your division and percentage. When you compare the rate of farm failures relative to the number of farms against the rate of overall business failures relative to the number of businesses in America, the failure rate of farms is about 30% of the rate of all business failures. There is no industry I know of that has as high a failure rate as farming. 

 

Just look at the number of farms today as compared with any time in the last 70 years. Its much lower, and not because some developers walked in and made farmers millionaires to develop their lands for residential or commercial building. Huge numbers of farms failed and either went into foreclosure/bankruptcy or sold out to the larger and better capitalized farm businesses. This does not happen to anywhere near the same degree in any other industry. So its not like these farm bankruptcies have been occurring in tangential parts of the industry.

 

Its the same perspective as I have been saying from the start, the fact remains that the farm industry has a higher rate of bankruptcies than most if not all other industries in America. And the small farming community should work together to do something about it rather than deny the problem exists until it happens to them.

Veteran Advisor
Posts: 1,504
Registered: ‎06-30-2010

Re: Harvest Report October 22

I'll call it a truce.  Your post speaks for itself.

Honored Advisor
Posts: 8,647
Registered: ‎07-18-2011
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Re: Harvest Report October 22

14 yrs old that’s my guess.
Veteran Contributor
Posts: 485
Registered: ‎09-20-2018
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Re: Harvest Report October 22

What's the damn difference about the exact number or rate of bankruptcies. The bottom line is they are too high and something needs to be done about it or in 30 years farming will be a monopoly controlled by only wealthy companies who will use it as a financial weapon, with consumers paying the price. 

 

Why not focus on that, which was the original point I was trying to make, rather than on me wasting time defining statistical analysis ?

Veteran Contributor
Posts: 485
Registered: ‎09-20-2018
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Re: Harvest Report October 22

You know what, when I was 14 I knew more about math and finance then you know today. You are long on mouth and short on brain, and that's not a good thing to be if you want to stay in business when times get bad. You know, I never criticized you or told you that you were an imbecile or told you how to run your business. I've given you the advantage of my experience on the financial side of the corn market and my investment banking experience in building up failing companies back to health. If you don't agree with what I think, don't do it. Why do you feel like you always have to try and criticize what I write, do you feel inferior in life so that you have to prove yourself to yourself or something ?

 

If you don't agree with my ideas, don't do them and be a man about it at least, rather than some kid playing tit for tat. My experience has taught me that the successful business owner never criticizes ideas. He may try some and may not, but he knows well enough that he cannot know everything so anything in the way of ideas he can receive he is grateful for. And he expresses that gratitude so as to ensure a continuing flow of ideas in the future from any source, because all it takes is one that he agrees with and he could turn that into a very profitable outcome. 

 

It would be a good idea for you to learn from that example and stop acting like the kind of business owner who always complains but never even tries to improve. Those are the ones who wind up in bankruptcy court,

Honored Advisor
Posts: 8,647
Registered: ‎07-18-2011

Re: Harvest Report October 22

It allows him to talk down to you and feeds his ego.

 

Like his assumption that a producer might not have indoor plumbing.

Veteran Contributor
Posts: 485
Registered: ‎09-20-2018
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Re: Harvest Report October 22

If you are that dumb that you did not realize that my comment about indoor plumbing was a joke, then yes, you deserve to be talked down to. 

 

And I don't feed an ego, just a brokerage account and an occasional beautiful woman. 

Contributor
Posts: 18
Registered: ‎05-15-2010

Re: Harvest Report October 22

Ray,

Please remember that I am the guy that posted a short, positive post (at least I thought so when you thanked me) regarding one of your first technical analysis of the corn market. And I would like to point out that subsequent corn market observations have been equally appreciated by me. So, keeping that in mind, I am going to ask you to revisit all of the posts about the bankruptcy rates of farm businesses versus the bankruptcy rates of all businesses. I believe you are incorrect in your assertion that farm businesses have a high bankruptcy rate as compared to all business bankruptcys. According to figures cited during the discussion,the farm rate is about 2.5 per 10,000, while the nonfarm rate is around 8.4 per 10,000. Obviously, the nonfarm rate is over 3 times higher than the farm rate. This was pointed out to you, but to date, you seem to have missed the point. I normally do not like to call out people in internet discussions, but you need to get this fact correct, and when you do, you should realize that the real truth is that farming enjoys a LOWER bankruptcy rate than the average American business. So yeah, right now things are not looking great in the farm sector, but things are a helluva lot better than during the 80's. 

 

Ray, this could be a defining moment. Hopefully, you will reread the discussion and realize that you are mistaken about this. Your realization and subsequent admission of your mistake will be appreciated by me.  Keep up the good work on the corn market analysis.