# Agricultural Civil War?



## Vol

Resolving Drought's Civil War.....the tension is beginning to wratchet up.

Regards, Mike

http://www.agriculture.com/news/crops/resolving-droughts-civil-war_2-ar25552


----------



## hayray

I read that article and it is interesting the perspective that the corn growers give you. Yes, blame it on mother nature, thats' a good twist. It sure doesn't help that goverment has given them handout, one after another - picking winners and loosers.


----------



## Nitram

Just love the short term solutions. Note sarcasm. Any time the government MANDATES as a solution that is where real problems arise. We are in deep do do!!! People have to eat to survive. If biofuel is a viable industry so be it but to mandate it's use is dictorial(spelling? ) Martin


----------



## steve in IN

Great article . One problem though Chris Hurt is very smart about numbers but I believe he is way out of touch with agriculture. Way too much ag biz money flowing into the land grant system. I am not sure what can be done. I grow corn and beans and alot of hay. I also raise cattle. If we truly plant 100 million corn acres then lookout. Japan announced today they are buying corn from Brazil because of the US price. I think alot of others will follow. We have to remember that we as farmers can grow a tremndous amount of grain. Our problem has always been getting rid of it. I got suckered into the "New Price Plateau" in 96 and am still paying off debt from that one. I will not fall for it again. Sub 4 dollar corn and $4oo dollar inputs and $200 rents dont pay many bills. That doesnt even include interest, equipment , drying or debt service. I have always felt we are headed for another "Farm Crisis". This time the government does not have the money to help. Just my opinion.


----------



## hayray

I had a person tell me the other day that the crisis could be a crash similar to the previous housing crash. Don't know if that makes sense, but is the ethanol mandate similar to the Fanie Mae/Fredie Mac situation?


----------



## mlappin

steve in IN said:


> Great article . One problem though Chris Hurt is very smart about numbers but I believe he is way out of touch with agriculture. Way too much ag biz money flowing into the land grant system. I am not sure what can be done. I grow corn and beans and alot of hay. I also raise cattle. If we truly plant 100 million corn acres then lookout. Japan announced today they are buying corn from Brazil because of the US price. I think alot of others will follow. We have to remember that we as farmers can grow a tremndous amount of grain. Our problem has always been getting rid of it. I got suckered into the "New Price Plateau" in 96 and am still paying off debt from that one. I will not fall for it again. Sub 4 dollar corn and $4oo dollar inputs and $200 rents dont pay many bills. That doesnt even include interest, equipment , drying or debt service. I have always felt we are headed for another "Farm Crisis". This time the government does not have the money to help. Just my opinion.


Can't remember the article, but they were interviewing a 10,000 acre guy, said he can still expand with a 10$/acre profit margin. To me 10 bucks an acre ain't worth wearing the equipment out on.


----------



## haybaler101

Yeah got a 6000 acre guy here renting on a 7 dollars profit margin. Haven't heard much out of them since corn went to zero here.


----------



## mlappin

haybaler101 said:


> Yeah got a 6000 acre guy here renting on a 7 dollars profit margin. Haven't heard much out of them since corn went to zero here.


Unless he also has ALL his expenses including living expenses, self employment tax, income tax, and property tax figured into that $7/acre profit sure doesn't seem like much of an incentive to farm 6000 acres to me.

I know what I make on lets say 1200 acres for an example, and I certainly wouldn't expect to make 5 times as much farming five times as much, but I would certainly expect to make a lot more than $42000 for taking five times the risk and working 5 times harder.

Spent Saturday hauling rock off the railroad right away, placed 4 or 5 loads in the cattle lane and a uncle was going to take another 2 loads for the pole barn he's building. Third load of rock I snapped the hydraulic pump drive belt on the skid steer, last load of rock Dad managed to get the front right tire on the backhoe plowing dirt and snapped the spindle. From experience if we can find a used spindle I know they are about $300 dollars used, am betting since I can only get that belt from Bobcat it will be at the bare minimum a $200 dollar belt more like $300, seems mighty hard to have figured an unexpected $600 in repairs into a rent bid last fall and still have that $7/acre profit.


----------



## haybaler101

mlappin said:


> Unless he also has ALL his expenses including living expenses, self employment tax, income tax, and property tax figured into that $7/acre profit sure doesn't seem like much of an incentive to farm 6000 acres to me.
> 
> I know what I make on lets say 1200 acres for an example, and I certainly wouldn't expect to make 5 times as much farming five times as much, but I would certainly expect to make a lot more than $42000 for taking five times the risk and working 5 times harder.
> 
> Spend Saturday hauling rock of the railroad right away, placed 4 or 5 loads in the cattle lane and a uncle was going to take another 2 loads for the pole barn he's building. Third load of rock I snapped the hydraulic pump drive belt on the skid steer, last load of rock Dad managed to get the front right tire on the backhoe plowing dirt and snapped the spindle. From experience if we can find a used spindle I know they are about $300 dollars used, am betting since I can only get that belt from Bobcat it will be at the bare minimum a $200 dollar belt more like $300, seems mighty hard to have figured an unexpected $600 in repairs into a rent bid last fall and still have that $7/acre profit.


Yeah, and that $7 was figured around "average" too. Probably 175 bu. corn @ $5.50. 25 bu. corn @ $8.50 or even $10 is not even going to get close, I don't care what kind of crop insurance they have.


----------



## mlappin

haybaler101 said:


> Yeah, and that $7 was figured around "average" too. Probably 175 bu. corn @ $5.50. 25 bu. corn @ $8.50 or even $10 is not even going to get close, I don't care what kind of crop insurance they have.


And there is the problem already, who honestly thinks $5.50 corn is the new norm? Even if it was, with increasing rent and input costs we are right back to the same profits as $2 corn. I haven't increased the promised amounts of rent in the leases, but I do give "bonus" checks at the end of the year if prices or yields justify it. That's also not wrote into the leases, it's just something I do.


----------



## mlappin

Really wonder what to do atm, haven't sold any fall corn yet. I didn't sell any earlier in the year as before it started raining didn't know if I would have any to sell. Haven't sold any now either as every report I see keeps dropping the expected yield.

What I'm wondering now is if the temporary waiver is granted and the ethanol mandate is dropped will the price of corn drop like a rock, or with the crop reports continuously lowering expected yields will whats left be enough to cover exports and domestic consumption even with none of it going to ethanol?


----------



## mlappin

Makes me wonder as well how many people did forward contract a lot of bushels at what might have been a very attractive price at the time and won't be able to even come close to delivering. haybalers $7/acre guy comes to mind. If your penciling your profit margin that close, you usually have at least a years worth of future production already sold.


----------

