Bred Cow Prices

[blackpowder]

Cash flowing their income tax. Thanks for the Sunday morning chuckle. I've heard that one before too.
I also know what 10 or 15000 hrs look like on a piece. There will be a hell of a lot less 'farmers' in this country when they need to start doing that.

[bucket]

As much as I hate seeing guys under utilizing their equipment, I need guys buying every year so good used equipment finds its way to my farm.

Drag this out 4 years and there won't be good equipment. Stuff has been getting wrecked for the past 5 because of the wetness.

Part of the reason dealers don't want it on their lots. Good for RBA.

[Klause]

The nice thing about older equipment is when you get to 9999.9 hours, in 1/10 you have a brand new tractor again






I kinda get a chuckle... In the patch we run rigs built in the 70s. They make hole as fast or faster than the new fancy ones with good guys on them.

My 1979 mf 4840 we picked up for 12K turned to 400 hp and a 1500 buck new market pump pulls a 57 ft air drill that we bought on auction time for 1600 bucks with 2 grand worth of openers on it.


Is it flashy... no... does it seed and grow a crop.... yes.

[wmoebis]

I wonder what has wrecked more equipment.
Wet ground?
Hrs of use?
Auto steer and text msg?

[blackpowder]

Besides, this high tech equipment would break you to fix anyway. Than God for the old Steiger and Versatile.




Now we start wanting "programs" again. That didn't take long. Back room planners in government long ago saw the number of viable farm units constantly shrinking to match economy of scale etc. we produce a raw commodity. A commodity that in the 20th century some govts starved many millions rather than secure more.
Sure I'll take program money too. But what makes you think you can design one anyway?

[Klause]

Pay every farmer 50 bucks an acre and see what rent and equipment does next year

[bucket]

I can. A premium based system similar to hail insurance.

On a per quarter basis, none of this whole farm crap.

Use historic data on a per quarter basis to develop a reasonable level of coverage.

Example. One quarter produces 50 bpa of canola peas wheat on average. That quarter should produce gross revenue of 350 an acre. You want to protect 80 percent of 350 so 280. You put wheat in but the market average price tanks to 4 bucks a bushel. You are short 80 buck an acre. Claim made and paid.

On another quarter canola goes 55 at 9 bucks but you are over both production and price no claim. Your average moves up when you want to change coverage.

Still thinking thru details but this whole farm average can't work anymore.

[bucket]

The price of the commodity is a market average. I think it should be off port prices because we pay the costs to get it to export position we should get export prices on insurance. So of covers us on that transportation issue as well.

"Market is always right until it comes to insurance coverage. " quote bucket Sept 21 2014. Lol.

[kato]

Whole farm programs are responsible for more problems than solutions, imho. All agstability has done is almost completely eliminated diversified farms. Now everyone either does one thing or the other. It used to be that when livestock were down, usually grain was up. They balanced, as long as you had both. A lot of farms did.

We had a few pigs when we were younger, and they kept the house going. Back then, if prices dropped, everyone kept a few less sows for a while, prices responded fairly quickly, and no one lost their farm. Now it's all million dollar barns that cannot run empty no matter what the market. The market response has disappeared, and it goes on until enough operations go broke before the supply responds.

When farms, no matter what they grow or raise become locked into the scenario of being too big to fail, heavily invested in a single product, and so invested in infrastructure, whether it be facilities or equipment that they can't respond to market signals they become very vulnerable. This is exactly the type of agriculture that has evolved over the past few years.

Agstability may give you one cheque worth cashing. After that, if things don't improve, as your margins fall, it quickly becomes worthless. It needs to be overhauled.

As for what the cattle producers will do now? We are still not spending money here. It's going in our pockets, after it goes on debt. We are sticking with the tightwad habits we developed since 2003. If something breaks, we will replace it, but we won't buy anything just because it would be nice to have. Agribusiness doesn't get a lot from this farm.

[farmaholic]

Bucket, when you have an Industry with their hands in your pocket and no way of compensating for it......!!! They will take enough of the "average" and leave you enough to keep you in the "game". If you can produce/market above average, good for you and if you're below, sucks to be you.

It will never matter whats in place when its capitalism on the input side and socialism on the income side.

[jensend]

So if farmers want more financial support from the taxpayer should they be willing to accept more regulation in farming practices? This is pretty much what has happened in other parts of the developed world. Environmental regulation like neonics, glyphosate and wetlands mgmt might become much more stringent.

[jensend]

So if farmers want more financial support from the taxpayer should they be willing to accept more regulation in farming practices? This is pretty much what has happened in other parts of the developed world. Environmental regulation like neonics, glyphosate and wetlands mgmt might become much more stringent.

[oneoff]

Why must we continue the paridyme of overproducing so the first bushel of excess causes every bushel to be worth less than its cost of production.

The answer is not in finding ways to insure, subsidize or give handouts. There needs to be at least some minimum "cost of production" baseline that doesn't stimulate producing apparently unwanted bushels; and yet produces all necessary food.

One way is to denature excess production so that it does not depress prices to obscene and ridiculous vales...or make sure it goes to uses that are not influencing ordinary markets....or dump it in the middle of the ocean. Given time, bucket could think of ways to make it work.

Can't everone agree that producing half a corn crop at $5.40 per bushel returns an equal amount as twice the yield at $2.70 per bushel (or more likely less than $2.00 bucks)

The fact is that the above example would require one heck of a lot less than $643.00 of inputs; every bushel would be in demand, you wouldn't be buying bins and in all likelihood be making a profit instead of $200 plus losses.

Its a fact that nothing makes sense; and all most see is trying to making up for losses by increasing produce some more.

[jensend]

Why offer to guarantee some level of cost to operators who are so intent on competing with each other that they deliberately increase their costs in order to gain an advantage? As has been pointed out every dollar of unearned money gets capitalized into rent, land prices or iron.

[ColevilleH2S]

Can't we just all agree that deliberately lowering production to gain higher prices is a complete and utter waste of time and effort. Quit bringing this tripe forward! It ain't gonna work. The year you all decide to fallow land, or skip the fertilizer, is the year I double down. She'd be wall to wall with all the groceries. And if I didn't do it, it would be Australia, or Ukraine or the US doing instead.

Smack your self in the head and acknowledge reality.