President Donald Trump - J.D. Vance Administration

#40,076
#40,076
swampfoxfan said:
Of course, increasing productivity and improving equipment is a recipe for disaster.
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Going into debt, outstripping cash flow absolutely is a recipe for disaster.

Record high prices for xyz crop this year.
Farmer - Lets go buy/lease more land to plant more xyz which means buying seed, fertilizer and other supplies. Also will need more equipment to handle the increase in crops. So borrow the money for the seed/supplies, borrow the money for the equipment thinking next couple of years we'll be raking it in and pay it all off.
Rest of the farmers growing the same xyz crop do the same for the same reasons and guess what, the market is flooded and prices fall.
 
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#40,077
#40,077
hog88 said:
Going into debt, outstripping cash flow absolutely is a recipe for disaster.

Record high prices for xyz crop this year.
Farmer - Lets go buy/lease more land to plant more xyz which means buying seed, fertilizer and other supplies. Also will need more equipment to handle the increase in crops. So borrow the money for the seed/supplies, borrow the money for the equipment thinking next couple of years we'll be raking it in and pay it all off.
Rest of the farmers growing the same xyz crop do the same for the same reasons and guess what, the market is flooded and prices fall.
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should farmers form voluntary collectives where there is a lottery (not the best word, but more of an overall plan to divy up what is produced and how many acres can be devoted to it) on crop and livestock production?
 
#40,080
#40,080
McDad said:
should farmers form voluntary collectives where there is a lottery (not the best word, but more of an overall plan to divy up what is produced and how many acres can be devoted to it) on crop and livestock production?
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There are collectives/associations mostly identified as co-ops. On the dairy side DFA is probably the most successful but there isn't a way to effectively control their members. They try but if farmer Bob wants to expand his herd there's no real way to stop him. In VA dairy farmers used to buy "base" from the state, it was like a quota system. You buy X amount of base which allows you to sell that much milk at the highest price, anything over that and you got a reduced price per hundred weight. So when prices are high it was still profitable to over produce because there was no penalty but if you didn't meet your base you could lose it so the program sorta worked to limit supply. I think most states had the same program in some form or fashion. These state run "base' systems were scrapped in the late 90s into early 2000s and replaced by Federal Milk Marketing Orders Federal Milk Marketing Orders | Agricultural Marketing Service which in my opinion has been terrible.

DFA handles production with it's own "base" type system for it's members under FMMO but still doesn't prevent overproduction. It's actually illegal for the co-op to incentivize it's members to lower production to keep prices level. I'm pretty sure there are similar co-ops and programs for dirt (crop) farmers and their products.
 
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#40,091
#40,091
hog88 said:
LOL The bold is pure idiocy.

I would bet my house that most of those farmers facing financial problems went further into debt expanding production and invested in new/more equipment when the prices were high. Now with more of their commodities on the market prices are coming down and of course expenses never go down. It's a fight I'm having with my little brother now.

We stopped dairy farming in May, sold the herd but kept the beef. Right now beef is at an almost all time high and my brother desperately wants to spend the proceeds from the dairy herd buy more livestock to expand the beef. And of course him and my dad went ahead and planted about 150 acres of corn this spring that they don't need. It's rinse and repeat with farmers, most are just not good businessmen.
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Have they ever thought about raising ostriches? They are delicious, and I'll bet they can get a premium on that meat.
 
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