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03-12-2019 10:43 AM - edited 03-12-2019 11:00 AM
Now, I'm reasonably well educated and I just cannot see how just
putting stuff under loan helps solve anything. It does not increase
demand, to the contrary, it would lower demand.
E11 is nice but does nothing but further delay a move to the
more scientific E15 approach. If you get E11, you will never get E15.
I just don't see how putting corn under loan helps anyone. It still
has to move before the next harvest to someone.
Crop ags economic challenges are 100% cost driven not grain
price driven. It is about 90% a land rental cost, or ownership cost,
driven problem. The other inputs have doubled since 2000, but
no one is forced to buy them either.
Forcing the government to subsidize land values and rental
rates assures that it never gets any better, and just increases the
rate of consolidation to those with deep land equity positions, namely
people like us.
03-12-2019 12:18 PM
For the corn belt where planting intentions never change but crop useage might..... Loan rate seems like a negative....
But what would it mean if Beans suddenly got a $9.50 loan rate and corn stayed at $2.50?? That would be a shift in acres. And a support to rent rates. And maybe a drop in Crop Insurance enrollment?? A drop in the use of multiperil anyway??
The senario is similar to giving the south a loan rate in cotton as it had in the last two years and claiming corn crop just keeps growing.
If that change was accompanied by an even bigger corn crop promotion from "Wa*****onie Phil". The corn belt might be able to see something beyond itself.
Grain is moving everywhere....... I just don't see the massive supply out there.
But I do see more red ink at Coops and more consolidations this winter.... That doesn't happen with bins full... that happens when the losses are realized.
Trends (like seasonals) are not there the last 4 years..... I have my doubts about trending supplies and yields also...
03-12-2019 12:22 PM
E-11 would probably be a reduction in use of ethanol.
My bigger concern is that E15 comes with a limiting factor..... of 15...... and we might learn how close we have been to 15 for a few years. It is just a matter of profit.
03-12-2019 03:02 PM
Terry Roggensack, The Hightower Report, made note today that there is talk of China agreeing to buy 7.0 million metric tons of U.S. corn, annually. Plus, China is considering making large purchases of U.S. ethanol, and so is Brazil, by the way.
And, to the E15 talk on this thread, here is the NCGA's response to the announcement today by EPA.
National Corn Growers Association President Lynn Chrisp made the below statement today following the Environmental Protection Agency’s (EPA) release of a proposed rule to allow for year-round sales of E15, according to the NCGA press release.
“Today’s proposed rule is great progress to getting the rulemaking completed by the start of the summer driving season, June 1. NCGA appreciates EPA’s efforts to meet this deadline and we look forward to fully reviewing the content of the proposed rule. We will be providing comments to EPA and urging our membership to provide input during the comment process as well.
“Allowing year-round sales of higher blends of ethanol not only grows a domestic market for farmers, but E15 gives consumers more choice at the pump, a lower price option and greater environmental benefits from a cleaner fuel. It’s time to remove the barrier to all of these benefits.”
What say you?
03-13-2019 02:30 PM
Time your accessment of grain loans is different in areas that are crop deficit areas and seasonal trends are most likely.
That being said we have watched coop after coop in a corn deficit area fall into big problems relying on that statement.
It was the truth for over 60 years....... 4 years of absent seasonals have hit most in this area pretty hard.