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Veteran Advisor

what is your solution to the problem(s)

soon it will be a new year....i guess i look at it as good bye bad year, hello maybe even worse year..........

 

There is a possibility that the farm bill may be opened and started to be worked in 2017.

 

As BA stated in a earlier post, the last time it was written was the worse time to write a farm bill....when things are "good".

 

Keep in mind the current waves in the ocean.......a number of oil (anti ethanol) oil people in several positions...and the

heritage commission (i believe that is the name), which are not in favor of farm program and crop insurance help.

 

so.........lets hear what you think we need.....something that will be in effect for several years.....come good or bad......

and then, what do you think of the chances that it will get passed........and lastly, can we have a good program,

or is there nothing left in the well.........

 

I'll start.........

 

1. Raise support prices to a "profitable level".  I think a formula could be figured out by some of our extension economisit.  I am thinking

     such a price would produce a 7 to 10 % return of investment, or more.

 

2. Continue crop insurance, but the guaranty level would be either a board price set as it now, or an "indexed cost of production"

     amount, such to the same way as suggestion #1, whichever is higher.

 

3.  Continuation of the ARC/PLC/Individual programs, with modifications.....i am leaning tward the idea of an "individual" program.

 

4.  an experimental "marketing program".......where there would be funds to help you do marketing, such as buy a put or call,

     within reason........no we would not buy you a $15 put on corn !!!....again based on my "indexed" price.

 

5.  continue with current conservation programs.....possible additional CRP program.

 

6.  Provisions for a disaster program

 

ok....some are now flipping out.....this could cost a little bit......yes, it can......but....i was told that for every dollar spent in the

rural economy, it rolls over 20 times or more.  This plan would also help our rural economy, help stabilize rural communities,

and help hold, and perhaps create new jobs. 

 

i think the farm  groups need to get together and stop acting like a bunch of kids.......quit fighting amoung themselvest.

our only chance will be united.

Also, we need to chnage our image.......i'm sorry, modern agriculture might be big combines, tractors, etc.....but how are you going

to sell that to the rank and file american people......you start to cry how a new combine costs $300,000.....most of the voting public

havent paid that much for a new house....they see tv ad's with farmers crawling into a new pickup...again, most of america does

not have a new pickup.

we must become "modest and humble"............

all the farm groups hire pr groups from either the east or west coast...they think this must be a good promo......because this

is the best pr firm...........

 

we need to step back, and take a big look at things........we have seen that the "average man" has "spoken".......he is not impressed

with the slick ads and the stuff we see on tv or mags.......he understands  hard times, he understands work, he understands living

in his means..............the minute you start to show fancy equipment, new pickups, etc........you've just turned him off......he has

nothing in common...no linkage.....so why should i care  ????

 

we are less than 2% of the population.......so we need every friend we can get.

 

ok............let the fun begin !!.

 

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18 Replies
Honored Advisor

Re: what is your solution to the problem(s)

If the goal is to keep the maximum number of farmers on the land, then the first step beyond anything else is a strict payment limitation.  As imperfect and as cussed as it was, the old set-aside and grain sealing was about the best that I can think of.  There just needs to have limits to avoid those gaming the system, something that wasn`t taken seriously in the past farm bills...I guess that the requirement of row crop cultivating was sort of a natural governor on getting crazy big, now there is so much outside money coming into farming that it`s kind of a virtual reality, ripe environment for scams if government money comes pouring in.

 

Just a rough draft of what I`d like to see is a voluntary set aside of 10% in exchange for the ablity to sell $4.50 corn and $10 beans and whatever equivalent on wheat.  With a 50,000 bushel limit on corn and 20,000 bushel on beans if the farmer wants to sell any more than those bushel limits, he or she is on their own at the total mercy of the market.  If they choose to not particpate at all, that is their "freedom to farm" right.  But that first 50,000 bu of corn the participating farmer gets his $4.50, if the elevator is paying $3, then the government cuts him a check for ($1.50/bu X 50,000) or $75,000 in exchange for a set aside of 10% of his program acres.

 

That would cut supply somewhat less than 10% ( not all would participate and acres beyond the 50,000 bu wouldn`t be subject to a set aside). Tariffs would have to be placed on imports or the livestock industry would just import Brazilian soybean meal and Argentinian corn for feed.   It wouldn`t be a tremendous cost to the government figure about 8 billion bu of corn ultimately subsidized @ $1.50/bu so about $12 bllion, maybe nothing on beans a little on wheat ...just guessing but throw in rice and cotton I`d say $25 billion total  taxpayer cost.  Because remember acres/production would be cut and the domestic livestock industry couldn`t bypass by importing because tariffs would counter their "savings".

 

I`d like to see a bone thrown to the livestock people too of the first $25,000 livestock sales for a individual farmer would not be subject to federal income taxes.

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Re: what is your solution to the problem(s)

We can't expect the government to guarantee us a profit. Some farms went bankrupt with $7.00 + corn.

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Honored Advisor

Re: what is your solution to the problem(s)

That is true, but the "$7" corn didn`t occur in a vacuum, all our inputs doubled and tripled in cost, it even affected the Amish Smiley Happy   If a percentage of each farmer`s opperation was given a modest amount of a neo-parity, whatever was beyond that would be his gambling bushels he would at least have a chance at survival.  As it is now, all 100% of our bushels are gambling bushels.

 

If that is the path we choose to go down, that is fine, I can probably float over the bust cycles and catch a gasp of air at the boom cycles for the next 15 years and then hang up my hat and climb in the Winnebago and drive into the sunset, but this ain`t no way to run a railroad.

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Esteemed Advisor

Re: what is your solution to the problem(s)

Your #1 has me chuckling. Guarantee everyone 7% return while the interest rate is .1%. Those industries exist, they are called utilities. Sell out and buy some stock if you want a guaranteed return. (A declining standard of living as inflation crushes your return over time).

 

Still on my meds, but a great many in this business have averaged WAY above 7% returns over their lifetime. In our benchmarking studies of peers, many are over 18% for their lifetime. (Simple ROE not compounded and not inflation adjusted fwiw). 

 

For your plan to work, you also have to cap profits at 7%, meaning any time wheat goes above $8 the gov gets it all. It is the way utilities work and also why we have one utility per area. We'd end up with one farm per county doing it your way I suspect.

 

I am sorry it rained in Kansas last year and sorry you have to endure the outcomes of bumper crops in an area with very limited demand elasticity. Hang on, KA is drying out, sometime soon KA will have a KA sized crop, crop insurance will kick in, price will go up, and a great many will profit handsomely again.

 

This is farming, the return is almost never in growing a crop. Everyone can do that. It is all in managing the business side in a purely competitive industry. (meaning the average cost will always be too high for many with or without gov support)

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Veteran Advisor

Re: what is your solution to the problem(s)

BA  -  You have put up a plan that is    '' WAY 2 commononsencical ''  - - -    

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Honored Advisor

Re: what is your solution to the problem(s)

Sorry elcheapo, I disagree with so much of your socialist post hard to know where to start.

 

Way too many flaws in your cooking. 

 

It's not up to everybody else to keep you in business.

 

The wife's got us packed up here in the motel room...gotta get down the road and pick up my new to me semi tractor, not up to the coop to come get my grain...

 

 

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Veteran Advisor

Re: what is your solution to the problem(s)

BA   -  '''  NEWS FLASH 12-29-2016 '''   according  to the  USDA  Economic  Research Service that dairy exports more than ''' Quadrupled '''' between  2004  &  2014  ---

 

Feeling better already   arentcuh  ---

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Senior Contributor

Re: what is your solution to the problem(s)

Don't have a solution. Most just pick winners and losers. The set aside idea, although good in theory, will just be taken advantage of by other countries. They will simply profit from our policies by producing more. I guess they will do that regardless. One problem I have always had is minor crops ALWAYS get the short end of the stick. Due to geography and climate I don't raise corn. Raise flax, canola, oil sunflowers, hard red spring wheat and malting barley(if it makes grade, otherwise feed). Crop insurance isn't real effective with these crops either. Guess the government wants ethanol, tortilla chips and tofu.
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Veteran Advisor

Re: what is your solution to the problem(s)

"feeling butter already"

 

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