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wrightcattle
Veteran Advisor

Re: Stock cows are well headed To $10,000 and $14,000 per cow

range simply to hold farms together in the Midwest.

 

folks there did not diversify before,

Global Meats are headed way Higher.

 

keep in mind, if your a banker and that corn farmer has started running cows and dropping some corn...she/he looks a Hell of a Lot smarter.

btw, so does their cash flow and balance sheets.

 

 

it IS NOT like the 80's.

interest rates are Way Cheap...Globally 

 

Everyone ELSE has cheap money now, IF they want or need such...so do some famers.

 

If your industry segment ( corn for example ) becomes Non Viable....why loan em Anything?

 

btw, the main reason money is cheap in places like the usa...is very Few qualify for a loan.

 the supposed usa Government Needs thus Borrows MOST EVERY Penney...simply by using supposed bank regulatry rules in place since 2009.

 

just gotta laugh...heck borrow it in the pac basin ( btw, they love usa farm loans ). 

it's 1 of thee best deals there exists to establish an offshore financial and trade entity into the usa. 

 

 

 

 

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Slim123
Senior Contributor

Re: Stock cows are well headed To $10,000 and $14,000 per cow

Cattle prices will go the way of grain prices.  

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WCMO
Senior Advisor

Re: Stock cows are well headed To $10,000 and $14,000 per cow

The end-user (consumer) beef price implied by stock cows at $10-$14,000 will not allow that to happen, at least not for long, assuming inflation has not elevated the prices/wages across the board to make that stock cow price seem reasonable.  Sounds like a bubble ready to pop -- at what point do the "willing buyers" disappear?

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timetippingpt
Honored Advisor

Re: Stock cows are well headed To $10,000 and $14,000 per cow

WRONGcattle strikes again...

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timetippingpt
Honored Advisor

Re: Impending liquidity crunch coming to Farmville.

Just to offer some balance, I see no reason or even likelihood that we have a near term liquidity crisis in crop ag. A huge portion of the land base is paid for, thus generating huge free cashflow. Almost every one is prepaid/deferred sale to the max, which we can unwind for quite a few years to smooth cashflow needs. Yes, there will be opportunities for well managed businesses to add to operational size, because a few folks get out of position, but that is hardly a crisis.

 

The math, and the demographics, and crop insurance, and the ARC, and interest rate policy, and the tax code, just are not alligned to create a crisis for crop ag. Probably won't even force enough guys out to allow for a normal 5% growth rate for existing operations. jmo but there is alot of free cashflow for lots of folks, especially if they go cold turkey on updating the new paint they already have in place.

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Red Steele
Veteran Advisor

Re: Impending liquidity crunch coming to Farmville.

I agree with the "near term" prognosis, but from what I have observed over the years is that when finances take a turn south, most managers are slow to change with the times, and their spending at a higher plateau gets them into trouble eventually. Those that stayed conservative in their spending are going to be just fine, but the current crop of "tigers" will probably find out about the rules of the jungle.

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roarintiger1
Honored Advisor

Re: Impending liquidity crunch coming to Farmville.

I have just one goal in all of this............Not to be the last guy to have a farm sale.  Smiley Wink

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sw363535
Honored Advisor

Re: Impending liquidity crunch coming to Farmville.

Time for some it is a crisis,  Problem in many areas is that many did not raise much crop the last 5-6 years.  That is what $7 corn is all about.  $7 corn just held it together for a fairly large number of producers dealing with low yields from weather extremes while at the same time costs went up as dramatically as any time in my lifetime.

 

Less than half of the crop is raised in the "heart of the cornbelt".  Yet we talk about it like everybody had a normal crop to sell in 2012.  And we all got to take full advantage of that $7 price....... In 2012 I don't think I realized $3.80 based on normal production...

And I marketed extremely well.

 

Well we all probably did market pretty well the last 4 years.  So what......  Did we produce well.  Obviously not.

 

It is very hard to go broke with poor marketing, but it is nearly a sure outcome if you don't produce.

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wrightcattle
Veteran Advisor

Re: WCMO, if cattle double UP

the cost of beef in your 1/4 pounder then becomes a whole $2.20 per burger.

 

There Is a LOT of Room in beef products B 4 consumers might think things is high.

 

btw, thee main consumer is not even in the USA,   they are in the Pacific Basin.

 

cripes stop at a stoplight in say bejing, and there are 5 to 15 Bentleys waiting for the light 2.

 

NO WHERE in the usa does 1 see THAT. MO

 

,

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timetippingpt
Honored Advisor

Re: Impending liquidity crunch coming to Farmville.

sw..I'll not disagree with your reality...but I will ask a few touchy questions...

 

1) Didn't crop insurance cover most of the production shortfall?

 

2) In areas outside the "heart" of the belt, land values have not raced skyward, thus land cost hasn't increased for you like it has the rest of us...is that true for you? MT likes to point this out to me on occassion.

 

3) What is your product mix? If only growing one or two crops outside the "heart" of the belt, is that what creation intends? We have some good friends in sw KA that have quite a mix of revenue sources that have done very well the last few 5 years. If only dryland crops, what do the neighbors do the other 80% of the year?

 

Again, not trying to disagree, or even ask about your own farm, but trying to ask questions to deepen my knowledge of the situation in your part of the world. Your post would indicate that my thoughts about PLC/ARC and crop insurance are not accurate.

 

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