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Veteran Advisor

Re: who believes the usda?

Jim, who benefits?  The US government! How? By Using USDA's numbers to forecast what it will cost for food nutrition programs thereby skewing the numbers in favor of the US gov. by keeping their estimates lower for budgeting. If it doesn't turn out that way well it doesn't affect them at all.  Each person just makes their guess and the rest of us have to live in the reality.

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Senior Contributor

Re: who believes the usda?

JR, can you show me some data that supports your position?  If what you say is right, then we should have recurring instances of the government budgeting one number and then appropriating another, probably with not only an authorization but a subsequent emergency supplemental authorization.  Authorization and appropriation are two separate issues in our government.

 

One poster says the USDA doesn't use numbers from sources mentions, you say they use guesses.  Are they guessing or do they have a formula of some kind?

 

Does the USDA run the show no matter which administration is in, or do different administrations control the number behind the scenes in their own way?  It would seem weird if Republican and Democratic administrations would both cheat on the numbers in consistently the same way.

 

Who are the keepers of the kesy to the crooks you allege to be in USDA?  If they are guessing with the objective of shading estimates for their own good, they are surely crooks.  Is this some kind of club you get into with a secret handshake, a wink and a nod?

 

And, if there are a few people "in the know" on how the government is allegedly cooking the books, wouldn't it be reasonable to assume that over the years these crooks would want to leak or sell their information to various funds, processors and so forth?  Someone is missing out on making a killing.  It's kind of like body count in the war - you can inflate things for a bit but eventually some person, some individual stands up and spills their guts.  I haven't heard of the person who is 'fessing up yet.  If anyone has a name, post it so we can Google him and check him out.

 

 

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Veteran Advisor

Re: who believes the usda?

Jim I will take your challenge to prove this out to you. however I am going to be busy today. so it might take a couple days to get it altogether.

But here is anecdotal evidence of what I mean. This week USDA came out and said between now and 2020 the milk produced was going to increase by 3800 pounds per cow over that time period. They also said that the all milk price would average about 18 dollars over that time and the all corn price would average out to $4-5/bu.  They than calculated the cost of pmts. over that time in milc pmts. and then they used this price to determine the impact on the budget deficit over 10 years which gave this administration(just like all previous admins) the ability to forecast what the federal budget deficient would be cut by.  In doing this they used a fictitious number based on a none real world price because of a fictional number on feed costs. SO this is how the Gov. wins it isn't necessarily a this budget year impacting number until you figure that they really have no idea what they need for debt repayment so they never really budget what they need to for costs of borrowing but they fudge that by skewing food costs for future nutrition programs.

This is no different than the projections that they make for SS or medicaid or medicare. So I may have mislead you to believe I was talking about this years projection. but it is the long term forecast that can be the most misleading.

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Frequent Contributor

Re: who believes the usda?

If usda would have came out 13 months ago and said, "the second heaviest earweights ever didn't mature." and lowered 2009 production we wouldn't be sitting here today having to possibly ration down to the last kernel.   but they didn't, because they are a political entity, and have all the traits thereof.   this isn't the general accounting office.

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Senior Advisor

Re: who believes the usda?

One hears the gov.--stock market--cash flow projections--etc.  never did figure out a projected cash flow to secure a loan as gospel--everything has its" monday morning quarterback" syndrome !

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Advisor

Re: who believes the usda?

   Jim I believe the reports are used to keep people from getting rich, not to make people rich.  It's no secret active farmers are a small % of the population and getting smaller.   If food prices can be kept under control (low) the general population will have more money to spend on other things.  Houses, cars, boats, RV's, vacations, etc.  This policy worked pretty good until the CRP program and Chinese purchases came into play.  Now the reserves are mostly gone and we are basically living hand to mouth.   If one thinks about it, it's a wonder prices aren't higher than they are.

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Senior Contributor

Re: who believes the usda?

It's a little more complicated than just CRP and Chinese purchases.  In 1980, we had a 1.6 billion carryout for corn.  Yet, the price was near $4.00.  In 1985, we had just 677 million bushels of carryout for corn.  Yet, the price was around $2.20.  The value of U.S. dollars have a lot more to do with commodity prices than anything else.  Let's look at another commodity - crude oil.  Crude is setting records for stocks currently here in the U.S.  However, the price is in the mid-80's.  Gasoline stocks are the highest in a decade, yet we just set a February record for national gas prices. 

Here's a little blurb about crude stocks:  "A glut of oil at Cushing, Oklahoma, the delivery point for the U.S. futures, has weighed on New York prices relative to Brent. The difference between the April contracts in London and New York was at $13.90 a barrel today, compared with $13.75 yesterday.  Oil supplies at Cushing jumped to a record 38.3 million barrels in the week ended Jan. 28. Inventories were at 37.7 million in the seven days through Feb. 11, according to Energy Department data."

 

What all of this really points to is the objective of the Fed.  If they continue quantitative easing and pumping of "new" dollars, the U.S. dollar value will continue to erode causing all comodity prices to rise.  What I find is odd is the fact that Bernanke can't figure any of this out.  While they claim there is no inflation, they really don't break this figure into the two different categories.  For households, they have discretionary spending and nondiscretionary spending.  While discretionary spending is seeing little to no inflation, nondiscretionary inflation is spiraling out of control.  As said above, even though we have decade high gasoline stocks there has never been a February on record where gasoline prices were this high.  By continuing quantitative easing, the Fed is all but guaranteeing that home prices will continue to fall while food and energy prices continue to rise.   

 

 

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Advisor

Re: who believes the usda?

You're right, I forgot about the currency valuations.  With all that's going on in the world I am surprised oil isn't higher.   But CRP has probably taken 300 acres out of production within  3 miles of me.

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Senior Contributor

Re: who believes the usda?

The only excuse I can make for crude oil not being higher considering the rest of the commodities is the fact that both Goldman Sachs and JP Morgan have their smallest commodity positions in seven years.  Goldman has run that market the past few years.  I'd venture to guess we'll see a very nervous crude oil market as time moves on and more and more countries attempt to oust their leaders.  While I can't speak for your area, the ground in CRP here should have never been broke out anyway.    

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Veteran Advisor

Re: who believes the usda?

Many of the early CRP contracts took land that should not have been broken.  But much of what was enrolled in the last 10-12 years was good farmland.  It became a gov. funded retirement program.  Now with "food shortages", and "high food prices" causing riots, and unrest I see our gov. proposes to cut research and other funfing which would promote more productivity, but increase funding for CRP. (which produces nothing and takes money out of circulation in rural areas.  Go figure!!

FWIW, I am not totally against CRP. IMO it should target waterways, Buffers, wetlands, blow knobs, etc. instead of enrolling whole fields

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