End of commodity boom real reason for national anger

[GDR]

I think the article makes lots of sense, granted there may be other factors at play also. Been stated many times on hear that farmers and resources are wealth creators and it trickles down the economy, that's exactly what the article is saying, that the well has been drying up.

If it had been wrote by someone other than the WP or posted by someone other than CC I bet the response on agriville would be different.

[TOM4CWB]

End of commodity boom real reason for national anger
By Ed White
Western Producer
Published: October 31, 2019

There’s an ugly feeling across Canada, apparent in the federal election and its results, but long-simmering beforehand.

Politicians have been horrible to each other. But so too have millions of Canadian citizens, these days often portraying each other as enemies rather than as fellow citizens with differing views. This is particularly true on social media, where insults and abuse are everywhere.

We have suggestions of secession from some in both Western Canada and Quebec. We have people of all provinces seemingly uncaring about the concerns and situations of their neighbours.

We have some citizens speaking in tones that can best be described as hateful.

What’s causing the outrage and fury?

Pipelines? Pro or con, those are a common provocation for many.

Carbon taxes? That’s another spur to angry talk from all sides.

Is it Justin Trudeau’s urbane, sleek, happy-socks-wearing demeanour?

Is it Andrew Scheer’s smug-seeming, dimpled countenance?

I suggest it’s from none of these causes, which are just the sparks for a pile of fuel built up from a much more mundane but far deeper source: the end of the commodity boom.

Since the boom subsided in 2014, Canada’s fortunes have markedly ebbed. Oil prices have fallen far beneath the prevailing range of 2006-14, when $100 per barrel oil was nothing special. (The differential between western Canadian crude and the world price, due to inadequate pipeline capacity, makes things much worse.) Metals and minerals have slumped and bring a far lower average price.

And crops, obviously to readers of this newspaper, have fallen into a much lower range of prices, one that offers meagre profitability in a good year.

This is life in the afterglow of the commodity bull market and it’s bad for most Canadians. Farmers and oilfield workers know that directly, finding it hard to cover operating costs, to find work, or to find the confidence to decide to reinvest in operations. That’s been the situation for five years now, and a lot of the bills that piled up during the good times have been coming due, and being put off, and the grind of working off the debt and optimism is wearing people down.

When everybody was preaching to us about peak oil theory, with its permanently high prices, and we were all buying into the idea of the world running out of food (nine billion people by 2050), being residents of a resource-producing region seemed like Honest John’s “easy road to success.”

Now all those assumptions seem dodgy, and there’s no reason to think anything is changing any time soon. Commodity booms usually come only every 15 to 20 years, so long-term commodity prices aren’t likely to substantially rebound for about another decade. That means farmers and other resource producers need to hunker down, achieve industry-leading costs of production, reduce risk and prepare for a long haul of weak returns.

That’s not a recipe for good will and bonhomie, especially after the dreamy future we thought we were moving into.

Urban people, too, are affected by this. But most don’t get it. They wonder why they can’t seem to get ahead these days. Why don’t their wages increase? Why can’t people afford houses? Why does life seem so challenging?

It’s the same cause. Canada lives off resource revenues, with everything from banks to construction firms to the arts industry benefitting when resource revenues are high and the money is flowing around the economy.

That money has been drying up in recent years, but most urban people are clueless about why. Most don’t realize how directly their situation and the situation of their children is dictated by how the resource-producers are doing. Some are slightly interested and some really couldn’t care less.

And some, seething about the frustrations in their lives, lash out at farmers and oilfield people, for WRECKING THE PLANET!

Cows belching methane. Oilsands operations exhaling carbon. The world is being punished, and it’s because of the resource-producers, they believe. That explains to them why everything seems so crappy these days.

Many Canadians have turned against each other in the last couple of years, forming tribes of outrage and finding joy in denunciation.

Others are just dispirited, especially after seeing such a gutter-level federal election campaign of insult and abuse.

Almost none of this would be happening if oil prices were $30 per barrel higher, or canola prices were $3 per bushel higher, or better prices were coming from the world market for aluminum, potash and wood. Everybody would be relatively happy, and Canadian society would be advancing.

Today’s outrages would be minor annoyances.

Instead we’re all mad at each other and looking for somebody to blame for our frustrations.

We might as well stop looking. There’s no politician or type of Canadian that’s causing this.

It’s the commodity cycle speaking, and we wish it wasn’t so.

https://www.producer.com/2019/10/end-of-commodity-boom-real-reason-for-national-anger/?module=under-carousel&pgtype=section&i=

Has this reporter heard of hedging and risk management of our farm products we grow!?

What a cop out... blame every one else. Grow crops people want. WHAT?

MARKETING. SELL WHEN PRICES ARE PROFITABLE, GROW PRODUCE THAT IS NEEDED!

[errolanderson]

Jazz quote

"And why would unrelated commodities boom and bust at the same time. You mean lentils and soft wood lumber are related? Natural gas and chick peas? Hmmm well how?"

Maybe ask Errol to explain why many commodities took off and then started to decline in price.

Do you think it had anything to do with exceptional economic growth in China and other parts of the world and then a decline in that growth and demand for all types of commodities?

Do you make business plans on your farm based on the highest income years? And then blame politicians when commodity prices and incomes fall?

chuckChuck . . . China's commodity boom lasted between 2008 to 2012 . . . it's been all downhill since then.

China's growth was skyrocketing around 14% annually in their heyday. Now China's growth is likely around 5%. China basically consumes 50% or more of global commodities. China's 2008 Olympics were their 'coming out party'. Inflation in commodities was brisk, times were good. That has now all changed . . . .

[bucket]

Has this reporter heard of hedging and risk management of our farm products we grow!?

What a cop out... blame every one else. Grow crops people want. WHAT?

MARKETING. SELL WHEN PRICES ARE PROFITABLE, GROW PRODUCE THAT IS NEEDED!

There is no way to hedge on a subsidized market that doesn't take into account regional issues like the drought in Australia and the horrible Western canadian harvest....couple that with the FSU investing in their infrastructure to basically absorb our markets by the fact our incompetent governments refuse to recognize agriculture in this country needs help...


You can hedge your loss using your farm's equity TOM or keep asking for the seed tax to make up for it...

[TOM4CWB]

chuckChuck . . . China's commodity boom lasted between 2008 to 2012 . . . it's been all downhill since then.

China's growth was skyrocketing around 14% annually in their heyday. Now China's growth is likely around 5%. China basically consumes 50% or more of global commodities. China's 2008 Olympics were their 'coming out party'. Inflation in commodities was brisk, times were good. That has now all changed . . . .

Drove 6 hours yesterday! huge piles of wet wheat on ground everywhere!!! No wonder prices have dropped!!! Twice as much wheat yield [[in many areas] as last year!!! Should no surprise!!! Blame elevator companies??? You guys... WAKE UP!!!

[GDR]

Has this reporter heard of hedging and risk management of our farm products we grow!?

What a cop out... blame every one else. Grow crops people want. WHAT?

MARKETING. SELL WHEN PRICES ARE PROFITABLE, GROW PRODUCE THAT IS NEEDED!

Change crops? To what? Last time I checked Oranges and Pineapples dont grow to well here. And hedging isnt gonna work for profitability if futures are already at or below production costs.

[bucket]

Drove 6 hours yesterday! huge piles of wet wheat on ground everywhere!!! No wonder prices have dropped!!! Twice as much wheat yield [[in many areas] as last year!!! Should no surprise!!! Blame elevator companies??? You guys... WAKE UP!!!

Must be those new varieties you want the seed tax on.....grow more make less ...
starting to sink in anyone...anyone?

[WiltonRanch]

Years ago dad seeded a lot of the poorer ground down to grass. Got more cows. He seen the decline of profitability in growing crops. That was mid to late 90’s. Then everything changed and we started shifting back to more grain less cows. Now I sit here thinking we might do the same again. It’s all a cycle. Cut out all the static of shitty leaders, competitors, declining purchasing power of foreign economies etc; it’s just a big merry go round. I did what I could at election time, and all else I can do is get my ship in order for the coming storm or maybe lack of wind that strands it in the dead horse latitude.
This article has got it right. Look around the world not only our situation here and see how divided and entrenched everyone has become in their camps. There is no middle ground, and that is alarming. Rash decisions are made by extremist leaders and extreme consequences result. Eventually it will change but what needs to result to cause the tipping point is for other discussion.

[errolanderson]

China has purchased just 6.32 million MT of U.S. soybeans year to date. This compared to 16 million MT purchased last year at this time . . . a 60% decline.

[GDR]

China has purchased just 6.32 million MT of U.S. soybeans year to date. This compared to 16 million MT purchased last year at this time . . . a 60% decline.

So is there any markets picking up the slack? What is happening on a farm level, my impression is that most US farmers dont have much storage capacity?