Software
Houzz Logo Print
gandle

We could get well this year.

20 years ago

Even though the drought has hurt the total corn yield, the price might just well make up for it. Last year the average cash price per bushel was $1:85, it has already hit $3:35 just last week. The cost of raising a bushel of corn is now near what the market brought last year Unfortunately, many farmers sold a lot of their crop on futures while it was still growing. You can always get more for it that way than the daily cash price but the gamble is, if the price goes up, as it has this year, you are committed to deliver x many bushels at the agreed on price. If you had a crop failure because of hail or other damage you still are bound to deliver x many bushels even if you have to buy them at another source for a higher price than than you will sell them for.

Fortunately, son only sold on futures enough to cover the cost of irrigation and seed and it so far looks like a very good year as far as yields and cash prices. Should make the banks happy.

I personally don't know many farmers that can finance their crop year without a loan from $100,000 to double that every year. When you pay back the loan and interest every year and the cost of raising the crop, there often isn't much left to put back in the operation or call net income.

The soybean crop was quite good and the price was favorable, maybe, just maybe, there will be a nice sum left over this year. Could use some new equipment, but you can't look at a new combine for undert $200,000.

Actually, I'm glad I'm on the sidelines critiqueing instead of actively involved except for helping out when they need a warm body to do some manual labor.

I have an old friend that says "that was about as clear as scummy puddle water" when he hears something like I just posted above. Hope it is at least as clear as that.

Comments (6)

  • 20 years ago

    Gandle, do you think the futures mkt. has helped or hindered the small farmer?

    What about government support programs? I know it's a complex situation with a lot of pros and cons, and a lot of programs have done a lot of good, but somethings just don't seem to make a lot of sense.

    I used to work in the Public School lunch program. We got tons of food for free from the Government buying up crops to support the poor farmer. Butter, peanut butter, Oat and wheat meal were amoung the main things. But we got gallons and gallons of ripe olives. Most of the kids wouldn't touch the things. Ripe Olives!! A real critical crop for the nation's economy, that's for sure. I've always wondered about that one. I would think it would be cheaper just to put the farmer on a monthly payroll and forget about harvesting and curing the things. Just the canning and distribution to the schools must have cost a bundle.

  • 20 years ago

    If the little farmer uses the futures market as an insurance policy it is probably a good thing. If on the other hand he uses it to gamble on the market it can ruin him. Every farmer I know wishes that there was actually a free market and let the prices stabilize where they may according to demand, BUT, since practically every country subsidizes farming, there would have to be universal cessation of subsidies to even the playing field.

    The farm subsidies were originally intended to help the small family farm but anymore, for the last 30 years or more, it has been the huge corporate farms that really reap the benefits, drawing millions of dollars.

    This certainly isn't meant to be a political diatribe. There is equal blame for the farmers themselves and both political parties for the mess the farm programs are in.

  • 20 years ago

    Farming is high finance. It's risky, scary business and I think our government treats the private or family owned incorporated farm (as opposed to factory farm) less than kindly. As the corporations control even more of the farming business........family farms will get even less consideration. Large corporation farming is under the conglomeration of companies who control the food chain of certain products from the seed to the table and all points in between and they have massive lobby power.

    I know corn prices are up because the cost of my animal feed has risen ....pow.......and continues to jump in regular increments. Poultry feed has doubled in price in the last ten years. But, eggs haven't, have they? I know there are exceptions, but I don't personally know one farmer who can afford health insurance without taking on some kind of additional job to get some semblance of coverage. The subsidies, or what is left of them seem to be going to those huge food processing corporations instead of the common farmer who could actually use some assistance in keeping our country's ability to feed itself a possibility into the future. I need to get off my soapbox and cool off. LOL. BTW, I don't even think the U.S. produces olives and wonder how ripe olives would be a price support strategy to our farmers.

  • 20 years ago

    I don't know about the rest of it, but I do know that California produces olives. Would that they'd have been a major part of our school lunches. I, for one, would have consumed my share! I do remember how we started to get little cups of peanuts in our school lunches... only after Jimmy Carter became president.

    Gandle, glad it's a good year for your son. It's might be an OK year for my BIL in spite of the severe drought in ND. Yes, his grass-fed calves didn't fatten up as much as they should have... but he moonlights as a liquid cattle feed supplement distributor. Normally he only sells the stuff in the winter when there's no fresh hay... this year that meant he sold it all summer long...

    It is disheartening that profitable farming has become as much about production as subsidy strategy. It's like we tried so hard to fix the system, we accidentally broke it in the process...

  • 20 years ago

    Continuing the rant, about 6 or 7 years ago an Agriculture Dept. agent stopped at the soybean extrusion plant and feed mill that son and his partner own and operate. He urged them to buy dried milk powder at a penny a pound, delivered. It was nearing the expiration date for use. It was to be used as an additional source of protein in the feed. This went on all over the country, urging feed mills to buy this almost out of date milk. You would think that the Ag. Dept. would know that cows have a lactose tolerance problem. When they are young, of course they need it. As they mature they become lactose intolerant or at least most of them do. They bought the powered milk and did mix it in at a very low rate after asking feeders if it was O.K.

    Wouldn't that have been so much better used to ship it to some African country where children are starving.

    They did buy and use 10,000 pounds. Just think of the millions of pounds of milk that could have gone to needy and starving kids.

  • 20 years ago

    Thanks Jazz.......just shows to go you what I know about farming in California. I know we are a net importer of olives and olive products and made a bad assumption. So, I looked up why we import olives and like so many other things, it's because imported olives (often subsidised in their country of origin, uh huh) are cheaper than eating our own. That's prolly because most European farm products are subsidised five or six times more highly than our own. I read somewhere that of the eighty percent of u.s. farm operations who even receive subsidies, most payouts are less than 900 dollars. That's even peanuts to my little operation and wouldn't buy me a decent heater. But, the top ten food producers recieve 80 percent of our subsidies. Subsidies do not help the family farm survive, they just make it harder for them to compete with the factory farms.

Sponsored