This Will Make Your Blood Boil

[sw363535]

If you think the tractorcade was a good event you may think Willy Nelson saved a lot of farms.

[ihtractortherap]

There is no farm crisis until land breaks 50%

[rayfcom]

Someone on the farmers' side has to stand up against these academic eggheads because in Washington the side that makes the most noise usually is the one that's listened to.

[sw363535]

hogwash...... your not able to see the obvious........ Did being loud and in your face block the senate appointment?

If anything it gave the supporting senators resolve to stand against the fools

Just as it does in every protest that is obviously irrational.

[sw363535]

Poor farmers can't afford to produce ----- not take two weeks to drive to DC at 20mph and buy fuel making 2 mpg. (with at least one support vehicle.) and burn off a set of tractor tires.  

It was just part of the entetainment involved in worshiping government and praying for favors. Like seeing your college student screeming at a senator for extra credit.

[BA Deere]

At the risk of sounding like a luddite (which I kinda am) the problem is yields and production outstrips population demand.   All of us "hermit crabs" are in competition with each other, if my yield monitor is pegged at 300 across the field, I`ll survive to farm another year, where the one with a 180 bushel yield won`t.

Some old axioms: "1% cut in production causes a 2% increase in prices" and you couple that with "yield trend increases are 2% higher each year"...well there you are.    The eggheads can send mailbox money, but I`ll continue buying the best seed, shovel fertilizer to it, keep it weed free and yield trends will continue to rise.  

All that happens is the deck chairs on the Titanic get rearranged.  IMO a farm program should be front loaded so everyone smaller than me gets a lot of "mailbox money" and everyone bigger than me gets nothing...and I`ll be the judge of who gets what   🙂    That would fix things.   However, most farmers wouldn`t want anything to do with it (yet) and the citidiots wouldn`t want to "add to the deficit sending money to Trump voters"  so, there you go, everyone might as well make themselves comfortable.

[rayfcom]

You're right about this, production is outstripping demand, and from what I have been told its because the only avenue most small farmers have to combat their rising costs is to plant more. What they lose in price they pick up in volume, that's the thinking.

Unfortunately it doesn't work that way, as you rightly note. The way to combat rising costs is to get them lowered. One way is bulk buying, the WalMart model...WalMart got soooo big they became the main buyer to most vendors, and at that point the comnp-any was able to dictate the prices it would pay for the goods it bought and the vendors had to go along with it because no one could afford to lose WalMart as a client. There are several books about this. 

Small farmers have little clout or capacity to pull of a WalMart model by themselves, but if they somehow could band together to pool their purchases through a cooperative buying agency, then perhaps they would have the clout to name their price rather than have prices dictated to them.

But that only tackles the problem at the fringes. The main cost to most small farmers is the cost of land. Its too high for many small farmers to make a decent living, whether they are paying a mortgage or rent. Individually they cannot do anything about that. But if the cost of land came interest free, either through a mortgage with a 0% interest rate or through reduced rents that strip out the cost of interest the owner is making through the rent, then farm land costs can go down. 

For example, if I buy a million dollars in farmland, and I put 20% down and take a 30 year mortgage for the other $800,000, I wind up paying about $1.2 million - or $40,000 per year - in interest over 30 years. On top of that, I am going to want to earn at least 5% on the land value per year through operations, which is another $50,000. So my rents have to provide me with $90,000 per year of income, which I charge to my land tenants. 

Now what if I was a benevolent rich guy who saw the need to have profitable farmers so as to ensure food on my table every day. The way I could help promote that cause is to rent out my million dollar farm for free every year, and perhaps take a cut of back end profits. After the farmer earns x dollars after his costs, then I get a share in his profits thereafter. The farmer gets the land rent free, and keeps a level of profits that keeps him financially sound before he has to start sharing some of those profits with me. Multiply that by the number of million dollar farms that are being rented every year, and I would bet it comes out to a lot of farmers making a lot more income than they are making now. Its a winning strategy to promote the financial health of the farming industry.

No company or wealthy individual is going to entertain this kind of venture. But government could do it easily. It already does it for residential housing, and for factories in targeted industries, Why not for the farm industry. Frankly, it would be far more productive than the $20 billion in subsidies handed out every year, because this investment of capital would build businesses that could expand with their new found profitability. There could ba all kinds of incentives built into the program to promote that end.

But it won't happen. Why ? Because there are farmers who own land and think its unfair that they had to pay for their land while others are getting it for free. Jealousy is a cruel motivator. There are others who think the government should not be involved in farming, better to cut off their nose and spite their face. Others think it would put downward pressure on farmland prices, which is silly since the government would be buying up huge amounts of farmland to bank this kind of program. And I'm sure there are a number of other excuses. 

And this plays right into the problem of production outstripping demand, The small farming industry has allowed itself to be divided and conquored, because they refuse to work together to create the political pressure needed to get these kinds of beneficial programs. Better to hold out your hands for the government crumbs that fall off the table with subsidies. You could get these kinds of programs passed in Washington, just stop selling food for a while, when the food markets have bare shelves for a week you'll see how fast Washington listens. Besides, Washington would love this plan, because they keep the land and as the land goes up in value they get repaid their costs for the program. 

But as I wrote above, its whistling past the cornfield for this, because the will to work together of the common good just does not seem to exist in the farm country. Better to cut each others' throats with competition than to work together to put all of your businesses on solid financial footing.

Eventually, the huge farm companies will do exactly what I am saying above, They have the capital to gobble up the failed small farms that go on the auction block, and as they get bigger they will employ the WalMart model. And they will make the profits on the land they took from the small farmers who thought they could overgrow their way to prosperity. 

It really is a shame.

[rayfcom]

If you are talking about the Senate appointment of the Supreme Court Justice, the lesson there is that being loud and in one's face without evidence is a recipe for failure in a country where most people still believe that a person is innocent until proven guilty.

But if you're loud and in someone's face and have the evidence to back it, then you will get what you want in Washington. And I can't think of a better weapon to use in that kind of fight than food. Give the farmers what they need or starve. Those millionaires in the Senate will not starve, I assure you on that.

I keep hearing this term "hogwash". Do pigs on the farm actually get washed, or do the farmers let the rain do the job for them ?

Another thing...they trade Pork Bellies on the CBOT, which I always assumed were turned into bacon. What about the rest of the hog, how are those parts sold ? Why do they only focus on the bellies when there's so much more of the pig that gets used for food ? Is there a cash exchange for pork chops and ribs ?

[jec22]

After reading that makes me wonder if anything on ZeroHedge is based on good science/fact. 

Those same Honda engines that they tell Americans ethanol will void the warranty,  are sold to Brazil with a warranty good when using E30.   How stupid American consumers are....Unless you are buying premium grade, unleaded gasoline these days is just a small step above crap.  Ethanol is SO much better than what they were using. Benzene is a known high cancer causing product.  That fact alone, along with the terrible stuff they were adding to gasoline, is a big reason to use Ethanol.  

So much B___ S___ these days.  Are there any people left that want to really solve problems, or just make money off their agendas.

[rayfcom]

Excellent points !