Posted by paul on March 20, 2018 at 07:19:49 from (66.60.223.229):
In Reply to: Re: Farm Problem posted by VADAVE on March 20, 2018 at 03:53:10:
The combination of different grains, and different harvest times around the globe, and using meat and milk as a giant buffer, does a very good job of buffering our food supplies and would carry us very well through several bad crop years.
Any grain 'shortage' is a projected one for 12 months from now, that is what the grain traders and importers use as a trading system. We really have a year supply of grain; prices dropped heavily yesterday because the guess is we will have even more than a year supply. Back when prices went up to $7 corn the fear was we might have less than a 12 month supply. We really are not living so much on the edge as it sounds.
Some people are working very hard to change that crop and livestock mix. Put us on just an organic plant only food source. That would eliminate a lot of the extra buffer time we have to react to bad weather. Cattle, hogs, poultry eat a lot of non-human feedstocks, and can be slaughtered faster than normal to make up for a food shortage, to get us by. You will notice in a real bad drought in the western USA beef prices get lower, as ranchers sell off cattle they can't feed. Then beef prices go up, as it rains finally and ranchers repopulate their pastures and feedlots. This is all part of the big buffering, where our food supply is very flexible and resilient with the big mix of food products with different growing conditions and regions and seasons.
What we have is pretty darn good food supply system. A lot of fools want to change it. Ack.
Now from our side, those of us who grow feed and food, we have been too successful, and the govt encourages it that way. So we would have a hard time getting off that treadmil, hard to band together and make any price changes. The govt and consumers reacted badly to that $7 corn, and that was caused by real, world events. If we tried to set our prices higher, that would be ended real quickly...... aside from the fact us farmers are pretty independent and don't band together anyhow. (I do believe vertical integration as General Mills is trying to do with 34,000 acre farm in Dakota will eventually consolidate farms production into the hands of a few giants, and then price controls will be the normal. For some reason consumers don't see that and are generally cheering such things on!)
Anyhow, as individual farmers the only thing we can do is control our costs. I think we shot ourselves in the foot with trying to lease/ rent everything, and farm 10x as much land as we used to. We no longer control our futures that way. Owning is -always- better than renting. Renting is a short term deal, it has no security, no future. I think that is on us, we failed ourselves.
Paying $300 rent for 175bu ground in these economics is silly too, as is paying $10,000 an acre. We have the big shots still doing this, and they will have an economic wreck in the future, taking us all down a notch again like the 1980s. It's a free country I don't have an answer for this, but I'm really, really mad at my CHS coop for lending one farmer $250,000,000 and then losing the money, hurting me and helping one person cause so much damage in the farm community. We need better regulations on lending, and on people avoiding their bad debt. Don't know how to fight that either. But it is clearly an issue in Ag.
The Farm Program told us we would have the Fredom to Farm years ago, and then started throwing money at us a year later? Never understood the direction it has taken since then. We need a farm program that offers support in a bad weather year, or when the govt uses food as a weapon and crashes our markets. The govt has tremendous power to change the value of our crops over night, and as such needs a safety net to fix the terrible mess they create. I would love zero govt Ag programs in this country; but when they mess with our markets, they have to have something in place. The govt does far less damage to other parts of the economy, and throws more money at them. Ag needs some protection. The current deal of crop insurance is a farce tho, it protects bankers and insurance companies, it is a subsidy to -them-, not to farmers. It also helps create the giant 89,000 acre farms that fail and walk away from their debt. It's a terrible deal, but govt doesn't listen to Ag any more, they are listening to bankers and insurance companies. We aren't even at the table. Most farmers would want some middle ground here; but non farmers want to throw out the baby with the bath water, they don't listen, they don't understand. They are so removed from Ag, even on this site, they don't get the point. We won't break through that. I don't know how?
Seed, iron, and energy are too high priced, and that is about all we can control, cut some expenses there.
If one was looking ahead and conservative and thinking about the future in the 1970s, one made it through the 1980s pretty good.
Likewise, now. The trouble is, how many do that? The govt programs and the bankers hustle everyone into the game they want to play. Now that the rules change, those that went whole hog are gonna hurt, and take all the rest of us down a notch with them.
Not planting for a year won't help. Holding grain off the market for a year won't help.
We need a fairer game to play.
Until then, cutting costs, having a conservative background, controlling the land you farm, all will get some people through in pretty good shape.
Technology is going to creep up on all of us, and that will be a game changer. All bets are off when that hits.
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