Saturday, May 7, 2016

Your Daily Bread

As another Lame Cherry exclusive in matter anti matter.

As I write this on the first part of April, I am watching how the commodity traders are under orders to steer farmers away from planting wheat in marginal areas, and out of corn, and into soybean production in the futures, and this is important as you follow the world supply of cereal type grains, as no one wants American wheat, and it is a matter of sales from Eastern Europe and Russia which are non Monsanto types.

My neighbor happened to mention in passing that it cost 425 dollars per acre to put in a crop. I did not ask him if this was including land rental or was the base price, but that price means it costs 425 to 625 dollars an acre to put in a crop.

This will mean nothing to non agrarians, but you can factor all of this out, in if you have 1000 acres of land in production, that means it will cost you 500,000 dollars to put in your crop. That is a half a million dollars invested without any return.
Yes there are Farm Bill insurances in this built in, that farmers will receive like 80% of crop value on average to cover a disaster like a drought, but I want you to focus on if you had a 500,000 dollar bill in March, and it depended upon your getting a crop by September to pay this off.

Now let us look at this, in just say that you get 150 bushels an acre, so that is 150,000 bushels.  Corn is not 4 dollars a bushel, but around 3.80, but to be simple, let us go with 4 dollars a bushel, or 600,000 dollars you will get for your crop, that leaves you 100,000 dollars, but you have still the costs of harvest and know like you like to eat, and remember the regime has all sorts of conglomerates selling you cell phone, electric, dish tv and whatever, so after you pay off your 250,000 dollar tractor, your land payments to FmHA and other things, you find you have been working for slave wages, although you do indeed have a nice vehicle and house which you do not own, to make you feel rich.

I was running the numbers on this, and with non Monsanto crops at less yield of 100 bushels, minus the costs of Big Ag, you actually would do just as much profit as with high tech farming.

Literally, nothing has changed in farming. Farmers are morons who get paid a few inflated years, so they can drive up land prices, have farmers buy new conglomerate machines and the next thing you know farmers are locked into the Soviet slave labor farms just like they were in the 1970's, except now they have cell phones and computers to make them feel like they are in control.
They even stopped having kids as labor, as who needs children with John Deere doing the work, or Mexicans doing the milking.

The reality is though the low end of worthless places like South Dakota to the high end of productive farmland as Illinois, each factor in the same costs. South Dakota will have less average land rent cost, and Illinois more costs per land rent, so in the end, the same average of "profit" occurs.
The last real stats out of Illinois, were when corn was a dollar more per bushel than the current price, meaning they were factoring in that farmers there were netting 50 dollars per acre. That might sound great, but if that 1000 acres only nets you 50,000 dollars a year, and you have business expenses in machinery and interest in the hundreds of thousands, it is akin to your having a 30,000 dollar a year job and finding out that you have to make payments on 500,000 dollars in vehicle and interest payments. Sort of makes a perpetual diet of crackers and dirt not look so appealing.

Farming is akin to 1849 gold mining. The merchants who sold the miners the tents and shovels got the millions like John Deere and Monsanto do, and you end up paying for the gold of your chains or of being poisoned by your daily bread.

All of this becomes more and more vital as the crop structure and curses the world has brought upon themselves begin the penalty phase. I think of the 50,000 dollars in debt my dad had which terrified me as a child, so I will never go into debt ever, and these farmers are running that on one field and think nothing of it. For that matter there are those of you reading this, who have 50 thousand in credit card debt and it does not bother you either.

I listen to my neighbors, and I noticed when he left his shrug of, "Well I ain't bankrupt yet", as it is biting all of them. Now if they make a profit the IRS gouges them, and if they play the game of debt deductions, that is not so amusing in years when the crops do not produce, as for some reason the conglomerates, banks and regime still demand their payments and .........well you can eat dirt and crackers as what does that matter to those in power.