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rickgthf
Senior Advisor

SD56, I see below where you.....

SD56, I see below where you apologized for straying away from marketing into politics.  Do not apologize.  Some people don't understand the difference between politics and the effect politics has on economics.  We are currently living through a perfect example, the pandemic.  Politics has gotten in the way of our national response to coronavirus and it is a catastrophe.  My feelings about trump aside, it is clear that trump's politics has prevented him from exercising the leadership we needed to survive the virus. 

  Tonight as I write we have had three days of over 40,000 new cases of coronavirus each day.  There is an arc of states stretching all the way from California to North Carolina where coronavirus is simply exploding.  In states that opened too quickly and didn't take simple mitigation measures like wearing a mask and keeping the proper distance seriously.

For more than a week, while trump & his supporters were refusing to wear masks or distance or even begin to take the virus seriously, we have watched with alarm as daily new cases in these states climbed.  That was the lag phase, now we're in the log phase.

  Instead of openly ridiculing mask-wearing & distancing, trump should have been encouraging all those republican governors and their people to take the precautions seriously.  He should have insisted on it.  That would have been leadership but he didn't and tonight we as a nation are facing a very serious situation.

  Contrast trump's behavior to say for example Winston Churchill in 1940.  Churchill told the British people exactly what they were in for, what they needed to do, and why.

  And so, what's the marketing part of this post.  Namely, demand. It is almost certain that gasoline (& ethanol) demand will suffer a serious setback this summer.  Furthermore,  food prices particularly meat are already high and going higher even while prices to the livestock producers continue to fall and will undoubtedly fall further.  Why, because consumers have been buying on borrowed time and emergency unemployment handouts.  A fresh outbreak of coronavirus, this time across a much larger area of the country will almost certainly bring consumer spending to a halt.

  Now, maybe the Chinese will buy some soybeans this fall but on balance it isn't that important anymore.  Consumer demand and the domestic economy are.

   More personally, what's the virus resurgence mean to me.  In May when I planted, I thought maybe we were through the worst of it, that ethanol demand would gradually return, there might even be a little demand for livestock feed.   

    Boy, was I wrong. 

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7 Replies
sdholloway56
Senior Advisor

Re: SD56, I see below where you.....

Well, and of course there is dogwhistle and sayin' it out loud politics here constantly.

But saying what Everybody Just Knows ain't politics.

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sdholloway56
Senior Advisor

Re: SD56, I see below where you.....

BTW, I had the grave misfortune of getting chased off here for being too political in 2008 and ended up arguing with trolls over at Forum.

It was political to say that the mortgage derivative market was going to blow and take everything with it.

Corn only went from $7 to $3 coincidentally.

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BA Deere
Honored Advisor

Re: SD56, I see below where you.....

The cure for high prices is and always will be "high prices" and I was re-educated on that the last 5 years as much as anyone.  We had "peak oil" $150 and goin` higher! and a well placed 2012 drought.  Now the Baakens fracking and $2 gas and powers that be managing to keep Trillion$ of printed and borrowed money from creating inflation (on everything that the farmer does not have to buy).    Add in unprecedented 5 years of above trendline yields, shake well & stir ..voila! Corn in the $2`s ...I don`t care if there was a President Hillary or Joe Biden, until they shoot us farmers, we`ll swing for the upper deck on yields.

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sdholloway56
Senior Advisor

Re: SD56, I see below where you.....

Change the subject?

RFS has been gutted by back door bureaucratic sabotage.

The US is facing a possible depression, which probably even affects those who are accustomed to being at the front of the handout line.

Trade is “roiled.”

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sdholloway56
Senior Advisor

Re: SD56, I see below where you.....

There’s a remote argument for trade efforts.

The ‘rona would have been challenging for even a competent administration that was paying attention.

But there’s nothing you can say to defend the refinery exemptions.

Which is where Rick dug in and has continued the battle with apologist trolls.

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rickgthf
Senior Advisor

Re: "Shoot us farmers" or die from the coronavirus, what's the difference?

BA, when you blame our current price situation on the response to high oil prices and five years of above-average yields you're completely forgetting the loss of demand due to refinery exemptions and the mismanagement of the coronavirus.

  The refinery exemptions are nothing more than naked special interest politics but the mismanagement of the coronavirus is in a special class of incompetence all by itself.   A month ago, the southern and western states had by luck & prompt action managed to avoid the worst of the pandemic but very clearly we have seen how they have squandered their advantage.  

  Contrast that with how people in the East behave.  There isn't any of this cramming into bars, beaches, or restaurants.  When you stop at someone's house here, the first thing you do is put your mask on, the first thing they do is put on their mask and you both stand twenty feet apart in the dooryard to talk.   As a result, New York's percent positive coronavirus is less than 1% even while Arizona's is 23%, Texas & Florida is 12-15% and going up.  What we understand here, is that it doesn't take the draconian measures of the Chinese to bring the virus under control, it just takes serious effort by conscientious citizens. 

  But I digress.  My point is, that even with good yields and cheap gas we were still selling corn for close to $4 so don't try to divert blame from the real culprits.

  Meanwhile, as to soybean exports to China,  a few months ago you justified cutting off soybean exports to China on the basis of China's treatment of the Wiegers.  I admit that I was as trouble by the Wiegers' situation as you seem to be.  And it is reasonable to expound the principles of human rights even as we negotiate trade agreements but come to find out, trump had not so secretly traded American human rights principles for the promise of soybean exports. That was a total capitulation of principle for the rankest of political ends.  It's clear that as a trump supporter, you've lost the moral high ground here.

   My question now is,  how do we even begin to think about "marketing" in the face of such clear incompetence and malfeasance on the part of the government?   It seems to me that nothing short of a well-timed put option back in January would have saved me now.

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BA Deere
Honored Advisor

Re: "Shoot us farmers" or die from the coronavirus, what's the difference?

Rick as someone with socialist leanings you should appreciate the Karl Marx quote "Each according to his needs"  Smiley Happy 

If you want to say we are going to address the 30 year trade imbalance with China and that will affect the Chicago Board of Trade prices.. and due to oil being historically low, even having to pay $30 barrel to have someone take it at times (I know corn is cheap, but we`ve never had to pay anyone to take it...yet)  Smiley Happy  So to protect small refineries, if cutting them a break from their blending requirements, that would be for America`s "greater good".  

I remember "gasohol" 40 yrs ago and the ethanol industry has been subsidized and mandated into being a "success" A lot of new pickups were bought by those getting in on the ground floor of that pyramid.  We have to be practical, if after 40 yrs we still need mandates to buy our product?  Shouldn`t consumers be clamoring for our product by now? 

I`m pro ethanol and I`m pro fossil fuel, but do we have the only 2 choices of giving the baby to one mother or cutting the baby in half?  Can`t we go back to paying oil companies to blend ethanol instead of the cold mandate?  

And China, they are communist, I hate communism!  we shouldn`t do business with our enemies.  China only makes deals where they get the long end of the stick, they steal & lie and have done so every day China post Chiang Kai- Shek.

So, Biden is going to be tougher on China than Trump?  I actually think Trump is too easy on China the way it is, but look at you China fans frothing at the mouth at what little Trump is trying to do with China.  I don`t see your boy Biden doing anything other than the continuation of the 30 years of capitulation with that country. 

The Chinese Christians are extremely persecuted as are Tibetans and the Uyghurs ...that`s what communists do, surprised?

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