cancel
Showing results for 
Search instead for 
Did you mean: 
425Cat
Advisor

giant sucking sound

I 'm starting to hear the sound of equity being sucked of many farm operations coming down the road. Lets see 2 bl bu carryout plus 500bl less ethanol usage plus another 2bl carryout next year and we have 2.50 corn maybe less. Cost of tires parts new stuff ain't coming down fert maybe a little. I would short john deere
0 Kudos
3 Replies
BA Deere
Honored Advisor

Re: giant sucking sound

Hey Cat, just my opinion but water seeks it`s level, we may see a couple years of wild swings (and that might be all that some can handle).  But can $2.50 corn be irrigated? can ground that floods out or droughts out every other year be farmed with $2.50?  I know I know they have their tricks of buying cheap seed and planting 15k pop and stuff, but boy that $2.50 corn cuts right to the quick.

 

The Bigshot at Gulf was predicting "$50 oil by years end" http://cars.about.com/b/2013/07/19/gulf-ceo-oil-down-to-50barrel-by-end-of-year.htm   if that translated in lower input costs, but I doubt it.  That dirty Bakken stuff needs $70 oil to breakeven and without North Dakota can we have cheap oil?  without ethanol, depending on the cut gas prices could rise a buck.

 

Fer sure many of our machinery buying slush funds will be mighty skimpy the next couple yrs. 

0 Kudos
425Cat
Advisor

Re: giant sucking sound

Deere
Lot of new paint in my neighborhood. Sec 179 and bonus depreciation could turn out to be a noose around ones neck choking out needed capital that was spent to avoid paying taxes . Guys went absolutley nutso spending money. Govt is after ag now the only good segment left. Throw in a banking crisis and then boom. Should have a least one years operating capital in cash or grain at all times from here on out.
0 Kudos
ray h.
Senior Contributor

Re: giant sucking sound

     You guys have the opportunitie to keep the playing field level.You want a econ, crisis just feed the forieners more grain than you can imagine at any rediculous number below the cost of your production.Talk of corn with a two or a three in front of it is something that should reduce acres real fast,maybe some of the bto's will choke on this $500 crap (rent).Some of the non farm land investors having to go a few years with out any return.(Maybe the crp land was a better idea than thought.)Is it possible that a country like ----- could win an economic crisis (war) after they had a big enough stockpile of your cheap grain to simply last themselves through it!

0 Kudos