High Crop Prices are a Two-sided Coin

[DogPatch]

High Crop Prices are a Two-sided Coin

High crop prices are a two-sided coin - good for crop farmers, but not so good for producers who depend on the crops for livestock feed. Ron Gietz, pork specialist with Alberta Agriculture, says that livestock producers, in this case hog producers, will feel a direct financial impact from the tight global stocks.
Click here to listen to the interview. >

[ASRG]

If feed grain prices stay high it will create some major problems for feedlots and hog barns. At least a feedlot can choose to stay empty for a year, if they can afford to take the hit? Hog barns either produce through a loss or go bankrupt.
The cow herd is shrinking and the only hog barns left are the big guys. When the last cow guys get too old to carry on, what happens then?
Can we sell enough feed barley and feed wheat for export when all that hay and pasture land becomes crop land?

[Slapshot]

The end solution has to be increased food prices. To achieve this, supply must be temporarily reduced, so demand can drive the price up.

The consumer has had an easy ride for too long. In the fifties, a families food bill was a much higher percent of its disposable income than it is now.

[hobbyfrmr]

I agree with snapshot, it is time for food prices to
increase in order for end users to make enough
money to buy our feed grains at higher levels so
we can make a profit as well.
I am not trying to be mean or spiteful against
consumer, but farmers have been looking for
respectable profits for 20 years while our support
industry like machines, fuel,and fert, seed, wages
and herbicides have to go up.because, there are
real people working for that industry expecting
living wages from these companies.
I am selling my feed barley straight away. The last
time I saw these prices was just before the US
recession, then prices went to half the value. I am
not waiting around for drama. Sell for profit and
live to farm another year.

[hobbyfrmr]

(sp) Slapshot

[errolanderson]

Brazilian corn is now entering the U.S. at
a $55/MT ($1.50/bu) discount to American
corn. U.S. corn is highly uncompetitive
right now in global markets.

[jethro456]

Running a feedlot isn't something you can just quit.
The tax implications would be huge without the
ability to expense the purchase of cattle every year.
Its better to get out slow, which is what a lot of guys
are doing now. Just buying enough to avoid a
massive tax bill and hoping to break even

[ASRG]

jethro: Of course you are right! The tax situation is always a problem.

[TOM4CWB]

You guys are truly funny!

Massive TAX problems????

And you expect commercial grain farmers to feel sorry for you... when we had losses for years on our family grain farm?

[burnt]

Tom, I think you are not understanding something here. "Massive tax problems" as a result of liquidating a herd or downsizing too quickly is not the same as tax problems incurred by making large profits. Surely you can comprehend that.

A cattle farmer can be losing huge money and still be taxable if he sells out his inventory all at once, thus showing large income w/o any expense.

The best way is to do like a neighbor who slowly scaled down over a period of years, showing smaller income while maintaining some expense.

That, incidentally, triggered his AIDA payments year after year, much to the chagrin of his sons who were struggling to make a go of their farms and getting little or nothing out of the "rescue" programs. Money for nothing . . .

In fact, it kinda put him in the same league as a lot of grain farmers . . .

[sumdumguy]

A fellow I know hired some foreigners to
assemble some equipment. They were greatful
and invited my uncle and his wife over for dinner.

My uncle asked them how they were coping with
the grocery prices. They chearfully responded
that groceries are so cheap here and opened
their cupboard door which revealed shelves full
of dog food. See they thought dog food was dog
meat which they were accustomed to eating and
it is so cheap.

Also the bathtub had a layer of mung beans
sprouting. You see its all relative.

[Burbert]

I thought the cow guys/gals could feed
distillers grain ta their nags, hence
fattening them beyond belief. Why even
buy feed grain fer the beasts, talk to
local malty. I'm sure they'll come ta the
rescue, cousin theys all good guys/gals!
Er get some grain from Brazil, er the
Argentine, fu*k comedian growers, go off
shore fer some product...