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Veteran Advisor

The 5% factor

Looking at all "the news" how agriculture economy
Is not looking good for at least 5 years, perhaps
We should impose what I call the 5 % factor.
Some will call it set aside, which might be very
Close.
Some how need to lower production (at least what we are told....remember we were told we were going
To run out of food. We have more people, but has
Happened to consumption ?)

Advantages
1. No cost outlay since no payment required
2. "Fringe acres" most likely taken out of production.
Thusly, some production reduction, and perhaps
Lesser loses on crop insurance (maybe lower
Rates ????---one can hope)

Disadvantages
1. Lower overall production (thusly higher grain
Prices.......but alast, some here view that as bad)
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15 Replies
Esteemed Advisor

Re: The 5% factor

Honestly El...dude... the carryouts are too tight for even a 5% setaside.

 

Plus it never works, it would get us $6 corn again, and then we would plant

100 mil acres and then we would have $3 corn again with 24 months. jmo

Contributor

Re: The 5% factor

I would support a set aside program. If I could lay out a percentage from intensive production in a rotation I could bring these areas back into production with much lower input costs through the use of multi species cover crops grown full season. It would also help break weed and pest management cycles.

 What the above comment mentions about the swing in prices is most likely true. But the real reason is the production of fertility through natural means and the control of weed species in the same manner does not fit into the plan of the large Agri giants business plan. Also it doesn't allow a way to pay high cash rents to off farm landowners. It would benefit society as a whole ,however. I believe

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Veteran Advisor

Re: The 5% factor

Oh, no. Government set a side...no, no, no.  

 

Another only the government could make this up:  Many farmers seeded, kept up and maintained waterways.  Some did not.  So those that did not, could enroll their waterways in the CRP program and get paid for each acre of waterways and the government helped pay for seed and seeding costs.  The guy that had always been taking care of his land and the waterways got ZERO!!!!!!!!!!!!!  The guy that did not and now has CRP income on those waterways was actually out of compliance on on his conservation plan and should not have been eligible for direct payments and crop ins. subsidies(since that rule changed).   But instead of being punished, as the law required, he was rewarded.  The good guy was punished.

 

Unbelievable.

Contributor

Re: The 5% factor

You are absolutely correct. I wish the government was not even involved at all. But they are in Agriculture and every other major industry from Oil to Wind Energy to Art Museums.  

  How would you motivate farmers to do the right thing and not over produce ? Maintain the land in a way that is sustainable? The NRCS  is certainly not accomplishing this with ridiculous one size fits all rules. Government is not going away.. 

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Honored Advisor

Re: The 5% factor

Well stated jec22

 

And think about it...........   Combine the two statements of fact presented from jec22 and Time.....

 

If a volunteer program reduced 5% or even 15% ....... Usda would never reflect it in the acre prognostications.  least not in the next 5 years.

If usda required a 5% or even a 15% set aside......... The usda prognostication would not change,  it will still be 91 billion acres of corn in 2018... and it will be explained away as more wheat acres went to corn, or some other excuse to maintain the expectations..... 

It would take 5-6 years for the world surplus to not weigh on the market with a sub 20% change in planting.

 

No ......... lets keep the current pattern............and soon it will suddenly change.  We have a better chance at this point, of reducing expenses extensively or seeing "real" reduced planting on our present course.  We really have no choice, because no one is actually verifying the numbers..... as far as acres and bushels........ but someone is actually counting the profits and losses.

 

JMO

 

 

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Veteran Advisor

Re: The 5% factor

There is a simple solution.  End crop insurance subsidies.  End direct payments.   Oh, but now the government even pays for every dead livestock I think....never ends..can fix stupid.

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Contributor

Re: The 5% factor

I hear you jec22. The status quo rules though . I cannot say that I don't cash my Government checks so I have no moral high ground to stand upon. I have paid a lot more for crop insurance than I have ever received even with subsidy and I am sure that most farmers that don't cheat the system would claim the same. Gotta pay the rent. Gotta make the bushels. So this subsidy goes to insurance companies and boards of directors.

 This market rule trickle broke notion that other commenter  suggests won't happen precisely because no one is counting the numbers in government. They just print more dollars and support more overproduction . I remember a Midwest with trees, barns pastures and rotated production . Long ago...

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Veteran Advisor

Re: The 5% factor

You play the hand you are dealt when it comes to the farm program.  Hope to never hear "Pick and Roll" again...but if you understood how to 'play that game' there was money to be made and still be totally in the rules. Unfortunately, my marketing lately would fall under the 'stupid' category also. Some great forward contracts made...just not near enough bushels.  I can just afford my stupidity more than others.....at least for now. 

Life is still good, and I am thankful for it.

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Honored Advisor

Re: The 5% factor

It is time. for the liberals to get their heads out of what ever dark place they normally keep it.

 

Any set aside we do will only directly help the South American, Black sea, etc farmers profitability.

 

As far as 5% that's fifty acres out of 1000, go ahead do the soil improvement one year crop. It'll only take twenty years to cover all 1000 acres, if that five percent is your potential profit margin, well all I can say is glad I'm not you.

 

Why should the taxpayer have to subsidize you doing the right thing for the land?

 

I'll  bet the gov't rules would be wrong for most areas. One year CRP program is what you want?

 

I'll sit this one out ...

 

"Pass the popcorn and hand me another Corona"

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