# 80's Creeping In?



## Vol (Jul 5, 2009)

Successful Farming.

Regards, Mike

http://www.agriculture.com/farm-management/finances-accounting/research-shows-the-80s-are-creeping-in-economists-says


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## rjmoses (Apr 4, 2010)

I've noticed all the way around that the economy seems to be slumping. Of course, this is in my unofficial roll as amateur economist.

Our horse related business has died over the last year.

Our farming related business has taken it in the shorts with prices.

Our interest income is less than 0.

The real inflation, not the revised non-food/non-energy CPI, has to be running at least 5%.

Please tell me again how quantitative easing and 0% interest rates for 8 years have saved me. I need a good fairy tale.

Ralph


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## JD3430 (Jan 1, 2012)

But Ralph,

Racial relations have never been better, right?
And all the poor children have "free" health care. 
And Obama lowered the ocean levels....

Now lace up your work boots, get out there and feed your worthless horses more of that low priced hay!!!

Yeah, I've noticed it, too. My wife and I were able to make a nice living and now the savings are dwindling. The kids are getting closer to college age and we are cutting back on a lot of the things we used to think would always be plentiful. 
Maybe I was showing too much of my "white privelage" and I need to adjust to the "new norm".


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## Swv.farmer (Jan 2, 2016)

I just hope we don't have another 4 year fairy tale.
I don't think I can stand all this great economy another term.
And I'm glade that white lives matter to me.


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## endrow (Dec 15, 2011)

Every acre is planted many areas are predicting a good crop. Every Dairy Barn is filled to capacity with cows. Seems every day in my area a new chicken house going up and record runs of feeders at the local auction. Why would anyone be expected to pay more for commodities when you can get all you want at this price.....
I have a good friend who's a pretty respected agronomist and investors he says for sure at this point going to take something catastrophic to break out of this current pricing


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## swmnhay (Jun 13, 2008)

I got a feeling when the crop comes in and gets sold and banker gets the money from $3 corn the party may be over for quite a few.Banker will say no more and cut his losses and not renew loans.Especially the ones that spent it all.They might have to sell the lake home to farm another yr.

All the EXPERTS said corn would never go back down.Where are they now?


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## rjmoses (Apr 4, 2010)

swmnhay said:


> All the EXPERTS said corn would never go back down.Where are they now?


Either rich, broke, or the same--depending on which side of the market they were on.

Knew a guy from Fowler, IN., back around 1986 when beans went through the roof. He would come into Chicago every once in a while and prance around the office, chanting Bbeans in the teens! Beans in the teens!"

He made $2 million that year going long beans. Next year--he gave it all back--and then some.

Ralph


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## r82230 (Mar 1, 2016)

swmnhay said:


> All the EXPERTS said corn would never go back down.Where are they now?


Swmn, forecasting the weather in MY area :lol: :lol: :lol:, you want me to send you a couple in your direction?

Larry


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## Farmerbrown2 (Sep 25, 2018)

I'm making half what I did ten years ago . Then on top of that working twice as hard and getting dirty to boot. Some of it is my decision to work close to home and family . I am really tired of the media telling me how great Hillary is anybody who lets there spouse repeatedly cheat on them ,lies , friends turn up dead just drives me nuts. I don't need to be rich I would just like to be able to survive. Something has got to change in this country hopefully sooner then later. Thanks for letting me rant even if off topic.


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## bbos2 (Mar 20, 2015)

I only lived one year in the 80s so I have no idea how tough things were then. Have several people around me that tell me about it but never lived it.

I hope we're not slipping into a decade like the 80s again. I do understand that history does repeat itself but doesn't replay itself. Hopefully things can benefit us this go around.

First I think many on this forum are very diversified. Which I believe can really help bottom lines in these lean years.

I know many on here probably view me as always very bullish... Well I'm sticking to it. Since 2012 we've had 3 (going on 4) huge crops. That is something that never happenes. Yet sub 160 national average on corn could leave us short handed with an empty pipeline . many say sub 160 could signal 5$ corn. That is still a very big number. Yes we probably will exceed that number yet again this year but my gosh we can't have the whole country be a garden state forever.

Positives for this years market... 
Hot hot hot south America. Below average bean year for them. China, may have to import more corn in 16. Hearing reports of corn being dented in Iowa and Illinois and it's only July . that has to affect kernel depth. More meat is being consumed worldwide . this is all great for demand.

I believe ag still has a lot going for it. Even for 16. We all knew the guys preaching that corn would stay at 6 bucks forever were wrong... I feel the same way about the analysts preaching a decade of low prices


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## somedevildawg (Jun 20, 2011)

swmnhay said:


> All the EXPERTS said corn would never go back down.Where are they now?


They are the same ones that wrote this report......them economist dudes


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## IHCman (Aug 27, 2011)

swmnhay said:


> I got a feeling when the crop comes in and gets sold and banker gets the money from $3 corn the party may be over for quite a few.Banker will say no more and cut his losses and not renew loans.Especially the ones that spent it all.They might have to sell the lake home to farm another yr.
> 
> All the EXPERTS said corn would never go back down.Where are they now?


I think those are the same Experts that told us cattlemen that we could expect 2 more years of good prices before the downturn.

I'm still making money with the prices of today, but I know of quite a few of my fellow ranchers that bought new tractors, equipment, pickups, and land thinking $1500 600 weight calves was the new norm. It'll certainly be an interesting couple of years ahead.


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## stack em up (Mar 7, 2013)

I was born in '82, so my memories of the 80's are from a different point of view. My parents both worked on the farm only, mom took care of us boys. Dad did the farming. I helped out when I could and how I could. I never knew anything different than eating garden vegetables, meat we butchered, and milk came in glass bottles we got at the grocery store. Eating out was literally a major event. We would order pizza when we finished walking beans or baling hay for the year.

Major equipment purchases were a well thought out plan. Is this _______ gonna make us more money, make life easier, or both? Dad needed another hay rake, cuz we were baling hay like absolute idiots. Instead of buying a new one, we went to my great-uncles farm, pulled an old Minnesota #5 rolabar rake out of the grove and rebuilt it. That's one of my earliest memories with my dad. Going over in his '69 C-10 and pulled it out with their Case 400. We got it hooked to the pickup and went in to talk to my great-uncles and my grandma and ate iced oatmeal cookies. It's funny the stuff you remember. I ate them like mad cuz Leonard told me they'd put hair on my chest.

Dad always planted good corn, never spent the big bucks in high dollar hybrids. O's Gold and Garst were his hybrids of choice. He would buy certified soybean seed, then we would save enough at harvest to plant half our bean acres the next year. We made extra money cleaning seed beans for other farmers, well, we made money from the guys who paid. Dad said if they couldn't pay us, they needed free seed cleaning worse than we needed a little extra cash. We cleaned seed oats too, that was a miserable dusty job.

Sorry to rant, but I kinda got lost in my memories. My point is, we didn't have much, but I didn't know any different. And those were literally the happiest days of my life. (Besides getting married and becoming a dad, but you get the idea)

It's hard to describe to my wife how little we had extra, but how happy we were. Her dad was (is) an electrical engineer and electrical supply salesman, so they always had plenty of money.


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## rjmoses (Apr 4, 2010)

As some of you might have gathered, I've been around for more than a few years and have enjoyed more than a fair share of governmental crapola.

But I think the worst I ever experienced was when Nixon floated the dollar in 1973. Gold went from $35/oz to over $800/oz, gas from $.30 to $1.30+, mortgage rates from 5% to 18%......

I was making $36,000/yr and living very well!! Three years later, I'm making $39,000 and we can't make ends meet!

But, a close second comes in as the market crash of 2008. I figure I have lost about 2/3rds of my retirement income because of that.

Ralph

"I mad as hell and I ain't going to take this anymore!"


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## carcajou (Jan 28, 2011)

Feels like the 80's for me now. I went to buy a combine for southern Alberta, and found out all i could afford is a 1987 Massey 860. I'm happy though because that's what i was looking for.


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## OhioHay (Jun 4, 2008)

Grandpa made it through the 80's milking fifty cows. He didn't have any debt. I don't really remember them days. Planted my first crop in 94. Did well, even though price was only a $1.90. Then $5 corn hit a year later and inputs went up dramatically. By 2000 price was down and inputs were still high. Raised a bumper crop and made very little. Kinda dejavu of today. Had 35 acres of hay that year that made good money. Decided to not listen to the experts who said to specialize in one thing. Now raise 450 acres of hay. 350 acres of row crops. Small cow calf operation. Small sheep herd. Also have two cage free layer barns. It would be nice to have a corn, beans, and Florida rotation and sometimes I envy those guys, but our diversity is how we weather these cycles and pass on to the next generation.


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## Vol (Jul 5, 2009)

OhioHay said:


> Grandpa made it through the 80's milking fifty cows. He didn't have any debt. I don't really remember them days. Planted my first crop in 94. Did well, even though price was only a $1.90. Then $5 corn hit a year later and inputs went up dramatically. By 2000 price was down and inputs were still high. Raised a bumper crop and made very little. Kinda dejavu of today. Had 35 acres of hay that year that made good money. Decided to not listen to the experts who said to specialize in one thing. Now raise 450 acres of hay. 350 acres of row crops. Small cow calf operation. Small sheep herd. Also have two cage free layer barns. It would be nice to have a corn, beans, and Florida rotation and sometimes I envy those guys, but our diversity is how we weather these cycles and pass on to the next generation.


Excellent diversity....you have come far since '94.

Regards, Mike


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## hog987 (Apr 5, 2011)

I had a great Uncle who put $50000 into a bank savings account in the 80's. Locked it in for five years at 20% intetest. More than doubled his money. So the 80's were good to some people like him. But than again he went through the 30's farming so it was time for him to have a break


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## OhioHay (Jun 4, 2008)

Vol said:


> Excellent diversity....you have come far since '94.
> 
> Regards, Mike


Thank you Mike. The Lord has taken us on quite a journey over the years. What a blessing it is to see three generations working together everyday doing what they love.

Tim


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## rjmoses (Apr 4, 2010)

hog987 said:


> I had a great Uncle who put $50000 into a bank savings account in the 80's. Locked it in for five years at 20% intetest. More than doubled his money. So the 80's were good to some people like him. But than again he went through the 30's farming so it was time for him to have a break


Following the Rule of 72, he should have ended up with about $150,000--that is excellent! But where did he find a 20% RoR?

Ralph


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## r82230 (Mar 1, 2016)

rjmoses said:


> Following the Rule of 72, he should have ended up with about $150,000--that is excellent! But where did he find a 20% RoR?
> 
> Ralph


Ralph, most likely he could not reinvest the earnings. Remember, the late 70's, early 80's we had double digit inflation (partly thanks to Jimmy Carter), which gave us double digit CD's, for a short period. Everyone that lock one of those CD's in long term were 'happy campers', for certain. I'm not certain if they ever hit 20%, but I know they were North of 17% (see chart). Larry

PS I couldn't paste right, here is a chart site.

http://www.forecast-chart.com/rate-cd-interest.html


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## rjmoses (Apr 4, 2010)

r82230 said:


> Ralph, most likely he could not reinvest the earnings. Remember, the late 70's, early 80's we had double digit inflation (partly thanks to Jimmy Carter), which gave us double digit CD's, for a short period. Everyone that lock one of those CD's in long term were 'happy campers', for certain. I'm not certain if they ever hit 20%, but I know they were North of 17% (see chart). Larry
> 
> PS I couldn't paste right, here is a chart site.
> 
> http://www.forecast-chart.com/rate-cd-interest.html


I remember those times (and they say you can't remember pain---HAH!) But, if he had a CD, they usually reinvest. Either way, he did good!

Great chart. Everybody should study it, especially the last few years. All of us baby boomers who scrimped, saved, invested, worked (now there's a four letter word), etc., are being robbed!

I always thought the way out of the retirement/Social Security boondoggle would be massive inflation. But I see that they changed the CPI calculation AND hold down the return rate doubles ups the effect.

Those who worked and saved are losing their retirement income by government policy.

Ralph

The only sure investment nowadays is ammunition.


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## r82230 (Mar 1, 2016)

rjmoses said:


> Ralph
> The only sure investment nowadays is ammunition.


The price on ammo is raising fast too. Best darn gun salesman is presently in the White House, is what a few people I know keep saying.

Larry


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## haybaler101 (Nov 30, 2008)

r82230 said:


> The price on ammo is raising fast too. Best darn gun salesman is presently in the White House, is what a few people I know keep saying.
> Larry


No doubt about that, Obummer has sold more guns than Mr. Colt ever dreamed of selling. In the last eight years, we have had a gun shop pop up on every corner and two in between.


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## luke strawwalker (Jul 31, 2014)

OhioHay said:


> Grandpa made it through the 80's milking fifty cows. He didn't have any debt. I don't really remember them days. Planted my first crop in 94. Did well, even though price was only a $1.90. Then $5 corn hit a year later and inputs went up dramatically. By 2000 price was down and inputs were still high. Raised a bumper crop and made very little. Kinda dejavu of today. Had 35 acres of hay that year that made good money. Decided to not listen to the experts who said to specialize in one thing. Now raise 450 acres of hay. 350 acres of row crops. Small cow calf operation. Small sheep herd. Also have two cage free layer barns. It would be nice to have a corn, beans, and Florida rotation and sometimes I envy those guys, but our diversity is how we weather these cycles and pass on to the next generation.


Don't underestimate the power of being DEBT-FREE.

When Grandpa finally paid off the debts back in the early 80's, Grandma said, "The day we have to borrow money again to farm is the day we hang it up."

She was right...

Later! OL J R


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## stack em up (Mar 7, 2013)

luke strawwalker said:


> Don't underestimate the power of being DEBT-FREE.
> 
> When Grandpa finally paid off the debts back in the early 80's, Grandma said, "The day we have to borrow money again to farm is the day we hang it up."
> 
> ...


Sounds like a grand plan, but I will never be that flush to farm with no operating loan. The cash outlay for row crops, hay, and cattle is just too much. We farm right at 1,000 acres, 800+ corn/soybeans, 80 acres alfalfa,(and another 97 leased), 60 acres of small grains, and have just over 160 cows and calves on the yard pretty much any given time. I'm not gonna disclose financials, but it's enough I dare say no one on this forum could do out of their own pocketbook. It sucks, but it's just the nature of the beast anymore.


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## swmnhay (Jun 13, 2008)

Debt can be a good thing.Hind sight is 20-20 but if I'd bought another farm 15 yrs ago it would of increased 600% in value in that time.My overly conservative banker thought I was in to deep already.My overly conservative banker thought he was keeping me from going broke but in hindsight he cost me millions.


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## Uphayman (Oct 31, 2014)

The 1980's were an eye opener regarding debt. 18% interest rates made your head spin. A lot of really good farmers went by the wayside. While I listen to and appreciate the efforts of Dave Ramsey, regarding debt......the business end of our operation utilizes some borrowed capital. Taking a cautious approach over the years , has allowed us to take advantage of opportunities that come up, (mainly land acquisition upon the passing of a landlord). Probably defining what an "opportunity" is, being the key. Sometimes the best deal is the one we passed.

"Men have to know their limitations" Clint Eastwood


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## JD3430 (Jan 1, 2012)

farmerbrown said:


> I'm making half what I did ten years ago . Then on top of that working twice as hard and getting dirty to boot. Some of it is my decision to work close to home and family . I am really tired of the media telling me how great Hillary is anybody who lets there spouse repeatedly cheat on them ,lies , friends turn up dead just drives me nuts. I don't need to be rich I would just like to be able to survive. Something has got to change in this country hopefully sooner then later. Thanks for letting me rant even if off topic.


Full confession: I'm making about 1/3rd what I did since Obama was sworn in. I took basically my life savings and threw it into my hay business. So far it's a mixed bag. I like it, but the money isn't quite there yet. I can see where it might be in a few more years. Need to become more profitable. 
Sometimes I look back and can't believe the risks I took. One tractor, one 15 acre field, a $1,500 baler and a vision....
Farmer Brown, I realized a long time ago the inside the DC beltway types loathe us as much as we loathe them. You don't see them settle these Syrian immigrants in Washington DC, do you? Nope, they're being settled near YOU. Then We give billions to a country that swears to destroy us. You know, I could go on and on....
The world really makes no sense. The natural order of things has been disrupted by a meddling, taxing, social changing, redistributing government.


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