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marketeye
Veteran Advisor

Will Farmers See Things Get Better First

Everybody is talking about the low price environment and how long might it last. One of the things I walked away with from the Commodity Classic is that some folks are seeing an end, finally. Now, that end may not be next month, but I took that topic and tried to expand it with this story.

 

Full Story:  Will Farmers See This Farm Economy Turn First?

 

 

What say you?

 

Mike

 

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12 Replies
BA Deere
Honored Advisor

Re: Will Farmers See Things Get Better First

Well, 3 ft scrap iron is  + $85, oil up, maybe negative % interest rates will scare investors to safety and grains will go along for the ride?   The weather this late winter seems "weird" El nino might still be is place and stay so though alot of the summer, but who is to say there can`t be a drought in an el nino?   Don`t know if a rally would translate into $4 corn and $10 beans (our survival ration), but with my fingers crossed maybe we`ve seen the bottom?

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marketeye
Veteran Advisor

Re: Will Farmers See Things Get Better First

It seems like a recovery in 6-months would be something that sounds too good to be true, but we'l take it. I thought it was interesting that the Rabo Agrifinance source in the story mentioned that the ag businesses will continue to consolidate. And then Monday, it has been announced that BASF is trying to merge with DuPont, wedging itself in between Dow and DuPont's merger plans.

What impact do you think these ag business mergers will have on you, as a farmer? I would be interested to hear your take.

 

Thanks,

 

Mike

 

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roarintiger1
Honored Advisor

Re: Will Farmers See Things Get Better First

Mike, is case you forgot,     Farmers are the FIRST ones to feel the effects of a "down" market. And farmers are the LAST ones to feel the effects when it recovers. 

marketeye
Veteran Advisor

Re: Will Farmers See Things Get Better First

roarintiger1,

 

That's exactly why I pointed it out in this story. Like you, I was surprised to hear from my source that farmers would see a turnaround first. But, predicting the future may be like a monkey throwing darts at a dart board. Somebody said that once, I don't know whom. But, I'm borrowing that phrase.

 

Mike

 

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OKdon
Senior Contributor

Re: Will Farmers See Things Get Better First

BA  I think negative interest rates may take hold and banks will pay ou to borrow money. Thus if you buy a $9000 per acre farm the banks wil lpay you Interest on money borrowed.. An extra $450 interest payment fromthe bank will help any farm  to cash flow.

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BA Deere
Honored Advisor

Re: Will Farmers See Things Get Better First

Don, I can`t see there ever being free money for borrowers.  But, there must be a few depositors that have $100`s of thousands sitting in the bank waiting for a "buying opportunity".  With negative rates deposits over say $100K would be charged  1/32%, it wouldn`t amount to much some would be enticed to pull it out and buy stocks or commods or anything but give that &#@*8*  Bank a "storage fee", some would just pay it because it would be safer than a materess. 

 

It would be a revenue source for the bank and shake some loose to circulate in the economy.   And that being the case grain is cheap now, so maybe some are starting to sidle to the exit door of their shorts.

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OKdon
Senior Contributor

Re: Will Farmers See Things Get Better First

Just so they don't charge drying costs or dock us for damage, wrinkles and such.

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bruce MN
Advisor

Re: Will Farmers See Things Get Better First

That speculation is remindful of a guy around here who had never been far from home but suddenly had one married daughter in New Jersey and another near Pheonix in the mid-80s who went on trips  to visit both of them, after they had sent the fare. 

 

Came back and became like a tent evangelist telling everybody he ran into, presuming the were as big a rube as he'd been before going on those grand adventures, "You have no XXX XXXX idea how XXXXXXX much money people are making everywhere else!"

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OKdon
Senior Contributor

Re: Will Farmers See Things Get Better First

Aint that the truth. They are building $450K houses as if they were $10 a piece. 50 of them a quarter mile away and room for 50 more in a short time. The next two miles east of us has two large developments being platted and graded some with streets and lots all mapped out. They are putting in more 4 lane streets to handle the traffic. My son in law just bought an acreage and the city is gonna claim eminant domain on part of it to make a 4 lane out of a two lane.

 

His property is 2& 1/2 acres which he planned on building a new house on.  It's got a couple of sheds a house and a chicken house. He has owned the property one month and he already has two of the  sheds and the house rented out.  He is remodeling the chicken house to rent to a single person. Rentals will probably pay for his new house.

 

Amazing ability to see a diamond in the rough!

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