re: Farm group says ag in full blown crisis

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Then it is time to reduce prices. Economics 101

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Lowering price in the near term will bankrupt the farmers and price will go up pretty quickly as most of this stuff has high turnover rates. And farmers will stop growing unprofitable crops which will hit us down the road.

The time for a new group to establish is not insignificant.

Vegetable farmers are just like crawfish farmers and shrimpers. Complain there won't be good crop or they are going bankrupt to get money from the Govt.

The farmers have made millions of profit, but will complain about one bad year. Don't believe everything (anything) they say.

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Nor is growing Alfalfa in AZ to ship it to Saudi Arabia for their dairy production

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For sure.

I do NRI surveys in Kansas, Nebraska, and South Dakota.

I see first hand the nonstop irrigation to grow corn in what is basically desert. The aquifers in parts of Kansas are already starting to peter out or become too briny.

It is not sustainable.

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Eh, bankruptcy is a healthy thing. Poorly run businesses deserve to fail.

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No disagreement from me on that, and I have no idea why that graph trends how it does.

I do believe bankruptcy can result in further consolidation and understand that could be a concern in American ag. And I do feel bad for business that operate on thin margins in times of policy upheaval and uncertainty. A soy farmer that just lost a market wasn’t necessarily a poorly run business.

The vast majority of farm “subsidies” just go towards bringing crop insurance premiums down. I would actually argue this has been the bankroll that has allowed much of the consolidation to happen in the sector since there are no payment limits on crop insurance like there used to be in the old government programs.

Speaking of the old programs: direct payments and pop payments are all but a thing of the past since the U.S. lost that WTO case with Brazil back in 2014. The only one-offs have been due to trade wars and Covid.

Like any industry you have some bad actors, but I can assure you that most farmers are not looking to be welfare queens. We would like to have normal supply/demand dictate prices and plant accordingly. However we live in a world where major state actors (like China) can influence markets massively in an attempt to put themselves and their own on top. If our government doesn’t respond in kind we’ll all wind up beholden to them.

I fear that the American family farm is quickly becoming a thing of the past. Wall Street is gobbling up land and farming operations are scaling into massive corporations in an attempt to compete on the global stage in a race to the bottom. If something doesn’t give this year it’s highly likely many of the weak hands will be squeezed out. It’s as bad as the 80’s out there right now.

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Meanwhile, government forces refineries to make a certain amount of gasoline with corn

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The sad thing about ethanol is that it's net carbon positive, so it does nothing for the environment and also bad for your engine. Those laws simply transfer wealth from taxpayers to famers in Iowa (and probably some politician's pockets).

Honest question, is farming to sell internationally even possible to do without US government financial assistance? If it’s not, why are we doing it anyway? Why not concentrate on growing plenty for the domestic market and that’s it?

We shouldn’t be trying to compete with Brazil, their labor and restrictions are not comparable.

ETA: also, why is China buying this? To eat? They still have to eat. You can’t just not feed your people. So what’s the real play here? If it’s to feed their pigs in which they then sell back to the US, this is absurd. Pork farmers in the US can just benefit.

I would have no doubt we are subsidizing farmers here to sell soybeans to China to feed their pigs to then send back to the US. When we could just help our local pork farmers

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Ok so what needs to happen to protect the smaller family farms against the march of Corporate Agribusiness? Is it too late?

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IMO the single most important thing that could be done would be to put payment limits on crop insurance subsidies. They’re not going to scale past the point at which they have to pay what the actual unsubsidized rate of crop insurance is and no bank will give an operating loan to someone without crop insurance.

To stop the corporate land accumulation you’ve got to put guardrails on what banks/private equity are allowed to invest in OR decrease the constant capital injections into the banking system. It’s not as easy a problem to solve.

The last major stress in the system is coming from the equipment dealers like John Deere who’ve been allowed to get too big and anticompetitive. They need to be broken up. Right to repair needs to be enforced.

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Honest question, is farming to sell internationally even possible to do without US government financial assistance?

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In some crops, yes. Naturally it’s hard to be the best, lowest cost producer at everything. I think long-term if nothing changes we’ll see much of the soybean acres shift to Brazil. They’re simply the best at that. Corn will stay here as it’s largely a domestic market (and enough beans to fill domestic needs). Some marginal cotton acres will be lost, but not all. It’s simply the only viable crop in some areas. Wheat, rice, and peanuts may pick up the slack acres in some areas.

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also, why is China buying this? To eat?

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It’s always been my understanding that China buys the beans for their hog herd which I think is for their domestic consumption.

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I’m not a fan of farm subsidies but if we’re going to do it anyway why not for transitioning to selling their goods domestically and adjusting production to match domestic demand.

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I thought you guys were wanting to fix the trade "imbalance"?

What we do well is ag, energy and tech.

You are now calling for taking away the ag. I don't get it.