Posted by rrlund on February 17, 2023 at 13:41:06 from (173.225.203.213):
In Reply to: Re: price of farming posted by Stuart on February 17, 2023 at 12:42:39:
They borrowed money in the 70s planning on the price of milk continuing to increase semi annually. When that plan ended, they weren't in a financial position to pay back their loans with milk that was priced based on supply and demand. Since it didn't happen to me, I can only tell you what I know second hand, but from what I do know, there were so many of them in tough shape, FHA probably didn't even have the personnel to try to straighten them out and refinance. We can't re write history. I had a lot of friends who either had auctions because FHA ''let them'', or if not, trucks and trailers showed up to haul their stuff to another location where it was sold along with equipment from other farms. A few got in to the buyout. That buyout by the way, was in three phases so those cattle didn't all go to the packers at the same time. You'd bid based on which of the three six month periods you wanted to sell in.
The end didn't come in the 70s when the government subsidies were still in full bloom. There were so many new free stall barns, double four parlors and 20x70 silos built in the 70s, it changed the whole landscape. Many if not most were empty by the end of the 80s.
An edit for clarity, that buyout began in 86 and ran in to 87. It removed 12 billion pounds of milk annually from the supply at the time. 1985 and 86 were the height of forced liquidation auctions. The price did stabilize some for a while after the buyout, but with no supply management, supply and demand causes prices to ebb and flow, and when supply outpaces demand, profits rise or disappear.
This post was edited by rrlund on 02/17/2023 at 01:51 pm.
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