Visit from the President

/ Visit from the President #21  
your are right, it was to control the prices but not for the farmer but the others. Your are also right it is not a free market but the farmer is a bystander in this fight also. I think the reason for this is that the government has turned independent people in to a bunch of beggers, the only thing that gets bigger is their mailbox for a bigger governemt check. Some farmers are out trying to try new ideas and doing things differently. My two brothers are prefect examples, one thinks everybody owns him something, the other is out doing new things, changing the way it has alway been and taking charge of his life. The amazing thing is the first brother is the oldest and the second is the youngest. If we stopped all the government programs for farmers, we would weed out the bad farmers and businessmen and the ones willing change will suceed. Lets let the chips fall where they may and the result will be a much stronger farm business. Just hink of the money they will save with smaller mailboxes.

Dan L
 
/ Visit from the President
  • Thread Starter
#22  
Dan,
I agree with letting the chips fall but we've got to even the playing field first. Let farmes have control over their prices again and break up the commodity and government cartels.
 
/ Visit from the President #23  
without government invovlement, don't we get rid of the cartels?? In other words the feed tough will get too small for the cartels to feed. I am not to sure about this, need to know more to know what you are talking about with cartels anyway.

Dan L
 
/ Visit from the President
  • Thread Starter
#24  
Well it's the govt. that has allowed these commodity brokers, the ones that buy the corn from the farmers and then freeze them out from selling to the mfg. There used to be a dozen or more companies that bought your product. Now with mergers it has come down to two or three brokers and they have sewn up the mfg. market, the market that farmers product goes to. The only way around this is to feed out livestock. This used to be a viable option and now the same thing has happened there. The govt. has allowed merging down to only a select few. So now the brokers have sewn up the farmer or rancher into only being able to sell to a select few. At the cattle sales there are a few independent buyers but ultimately even they have to sell to the big guys. Now there is about a 5% share of the market that is private. IE I raise a beef and sell it to you to have butchered. But you certainly aren't going to pay more than the going rate at the sales for the beef. Now some people will pay more because it isn't processed but that market is very small. Not many options for a small farmer, and a small farmer anymore is a couple of thousand acres.

When I say govt. and commodity cartels they are hand in hand. To get as small a number as are left there had to be govt. approval of the mergers. Govt. didn't bat an eye doing it. Now there's no longer competition. That's why I am shifting more and more to the horse market. I still have a chance there and can control more of my own market.

Perfect example here is the fertilizer market. There are two places left to buy your fertilizer from. A small company came in last year and tryed to undercut prices and get a business est. The big guys slashed prices below that and before the season was even barely begun the guy was out of business. The big guys have gotten so big that when a new company comes in and trys to compete they just force him out. Now it is the govt. that created this and this unfair business practice has to stop to est. a true market again.
 
/ Visit from the President #25  
I gotta jump in here.. if the entire farming community of the USA just STOPPED farming for ONE year.... put the land in cover crop/alfalfa or grass hay, what do ya'll think the commodity brokers, the 'futures' buyers and the giant ag companies would do? After all, even those farmer that have ironclad contracts with Archer Daniels, and so on, could in theory stop producing ... and without anyone to plow the corporate owned fields, drill, spray and harvest.. one year would see one HELL of a lot of change.

Sure, it's pissin up a rope, but Willie Nelson would LOVE it, and so would I.

Remember the PIK (Payment in Kind) programs of the 70s? Remember how the media portrayed all the 'rich' farmers getting paid for NOT producing ?

Simply put.. those ag companies are part of another conglomerate that has a subsidiary that sells you your Roundup, Rodeo, and so on.. and then buys your crop and pays you less than it cost you to plant it, as one said earlier.

I remember the Kansas signs I saw on I-70.. "One Kansas farmer feeds 71 people and YOU"

Ask someone who grew up in the big city... what they think.

Most of them never heard of Kansas, except as where Dorothy and Toto came from.
 
/ Visit from the President #26  
Sorry, KPP ... I'm on the "unpopular" side on that one. I was born and raised on a farm - back when a farm was a lifestyle ... not a licence to print money. We grew and raised enough to feed ourselves and have some to sell/trade for the stuff we didn't grow/raise.
Now, we have part-time farmers who raise wheat ... take vacations from their "real jobs" to plant and harvest ... and then buy new, un-needed, equipment every year to minimize their taxes.
My stepbrother has a fair sized ranch in Alberta ... he puts off selling stock, changes what stock he's raising, etc ... all to minimize the taxes he's paying.
Yes ... there are farmers who do not do as well .... but ... where is it written that you get to make all the choices and society gets to pay for your miscalculations?
Can't grow and sell for more than the cost of production? Is that "my fault" or your poor planning? Maybe that farmer should find another line of work.
If my business founders because I'm not selling what you want, or my price is too high, or I'm a terrible businessman ... does the government step in and help? Or does the IRS drive the final nail in the coffin?
When's the last time Willie held a benefit for small business owners?
I work pretty hard for my salary ... but I can't write off the equipment or expenses for getting to work. I spend thousands each year to make sure I'm staying at the top of my chosen profession ... how many farmers upgrade their education?
If you build a restaurant in a town that's already saturated with restaurants ... you've got a tough ride in front of you. Build a dairy in a location that's already saturated with unsold milk ... and we're supposed to feel sorry for you? Plant wheat when wheat has been selling under the cost of production ... and we're supposed to feel sorry for you?
OK ... enough venting ... I'll just end by saying I'd love to see the days of family farms returning ... you know - those places that were about a 1/4 section ... big ole horses pulling the plows and wagons ... no million dollar combines in the fields ... but it ain't gonna happen. People are not satisfied with a healthy lifestyle anymore .... they want all the toys and geegaws that the guys at GM and Ford can buy with their union wages.
 
/ Visit from the President #27  
<font color=blue>.....but it ain't gonna happen. People are not satisfied with a healthy lifestyle anymore</font color=blue>

Wingnut... never say never....if the economy were to seriously falter due to outside contaigens, continued terrorist activity and a Mideast unrest borne oil embargoe, you just might see some folks flee fearful city living with all its trouble for a more "healthy" country lifestyle. If that happens, I would still predict it will never be really en vogue (too much work for most!!),....which is a good thing 'cause country folk don't want to be bothered with that many "slickers" around anyhoo.

I, for one, work for attaining just such a shift towards healthier living (not that we live in a city, we have it pretty nice where we are) without undue prodding from such catalysts, but have no illusions about doing it without a tractor and or other such implements :) ....which is one reason I'm still on the treadmill working hard to gather the necessary funds to make the shift...such a circle...just hope to be alive, strong and kickin' enough to enjoy the lifestyle when we attain it!
 
/ Visit from the President
  • Thread Starter
#28  
Wingnut,
IT HAS NOTHING TO DO WITH SUPPLY!!!! It has to do with greed by the middleman and the govt. keeping food costs low at any cost. They have allowed the middlemen, Archer Daniels, Cargill, etc. to become basically monopolies. Now they can buy the grain for whatever they want to buy it for and believe me brother it's low!!! Well now what would happen is that all the farmers would go out of business. SOOOOOO the big middlemen get together and arrange for the big brother fed. govt. to give the farmers subisidies to keep them afloat so there can continue to be low cost food and astronomical profits from the middleman. Let me ask you. Do you see the price of your cornflakes or other favorite cereal decreasing in price? No sir you do not. Do you see the price of your processed feeds for your mini's decreasing? No sir you do not. What you see is moderate increases in prices on the food, further decreases in prices paid to the farmer. Pay them just enough to keep going and keep the subsidies coming.

It's not a fair market at all Wingnut. You won't hear the farmers saying they want more fed. govt. infl. In fact what you hear them saying is let's get together and form co-ops to get a better price and stabilize the market. Nope that won't work now because now the stupid feds. have allowed the middleman to make contracts with the producers so that they will not buy the product from the co-ops. If I tryed that with a group of physicians I would be in federal prison for the rest of my life. So would you in whatever business you are in as well.

No doubt it is a complete mess! But the feds and the middlemen have created it. It definitely isn't the farmers fault.
 
/ Visit from the President #29  
Wingnut, I too, was raised 'country', and have lived in large cities as well. Let me give a very simple example, perhaps not the best, but it will suffice for my purposes.

Farmer Brown raises Idaho potatoes, bushels and bushels of them. Sprays for the potato bug, and flea beetles, and so on.. finally harvesting them. Since he is a prudent fellow, he contracts for his crop well in advance, and does pretty much everything, within his power, of course, to increase his yield. After harvest, the trucks come round to pick up his crop, he receives on average, $.10/ lb ; thats a DIME per pound, of his potatoes.

Now, that broker he sold them to, sells some to this place, some to that place, all for a healthy profit of course (free market, as it were) and a huge portion to the fast food chain Mcdonalds.

Now, Mcdonalds skins the taters, deep fries them in vegetable oil (also an ag product) and then sells them for approximately $6.00/lb

Now thats a bit beyond the healthy profit and straight into obscene. Sure, there is a LOT of other costs, trucking, storage, many many things.. but dayum, somethin inside me says, now there has GOT to be a way that poor guy in Idaho could somehow get a lil more money for his taters.. but he cannot. He can sell to another broker, but hey, they ALL pay the same.. and if you don't like the pay, quit raisin taters.
Sure.. free market.. laws of supply and demand. I agree 100%.

Now, lets see.. if I remove the supply, by NOT growin a [censored] thing for anyone but myself and my family.. the demand oughta rise. After all, EVERYONE has to eat. And sure enough, if enough farmers stopped growing, the prices would SKYROCKET.. at the Chicago Board of Commodity Exchange. Do you actually think the poor SOB with the $350,000 combine, and $4,000,000 worth of land, who has a savings account of $1200 bucks, and barely keeps from bouncing checks is gonna see a DIME of that price increase?

Farming IS a business, and if my business model does not work, then I lose out, and go out of business. However, I know of NO other business, where the principals pay retail for all supplies, equipment and raw materials (seed) and then sell their product for less than wholesale.

Wholesale is what the broker charges the retailers of this product, to stock their grain bins, to fill their french fry machines...

As for "where is it written that I get to make all the choices, and society gets to pay for my miscalculations" ....

Do me a favor and ask the Fortune 500 company CEOs that. Ask the executive staff of Enron Oil Co. Ask the Chairman of the US Federal Reserve.

I choose to produce a product, and sell that product myself. Straight to consumers, fruits such as apples, pears, peaches, berries of many kinds, and so on. I choose, NOT to sell to some broker, but for someone with 10,000 apple trees, there very well may not BE such an option. Either sell to this guy, or this guy, both are going to pay the same. It's [censored] certain that apple farmer isn't going to open himself a roadside stand and sell 50,000 bushels of apples.

I do not know all the ins, and outs of the government price supports, and so on, but a very interesting question comes to my mind every time it is brought up... if we remove price supports, AND remove the artificial businesses that do nothing but act as a middleman for huge profits, not only would prices for those farmers go UP, but the prices at the check out stand of your local produce store would go DOWN.

I remember an in law of mine who raises apples in the Yakima valley of Washington state, telling me, if he could sell to grocery stores' central warehouses directly, he could DOUBLE his profits, and cut in HALF the cost of a Red Delicious apple at his local supermarket.

These artificial constructs DO serve a purpose, in that they make available nationally, the very best produce, and meat, that is available. There is a LOT of paychecks involved in the trucking, storage and other things.. which explains why there is such profit, since these brokers have to pay for a lot of this.

Oh and by the way.. if you don't think farmers are small business owners.. then perhaps I am actually wasting my typing. Farmers upgrade their education every year.. it's called experience. Remember that, next time, you buy some celery.

And yeah I would love to see the family farm 'return'. But let's NOT forget, the poor guy that runs that combine for Archer Daniels, HAS a family. He just couldn't compete, law of supply and demand, and free market, and all that...

So he got a job.
 
/ Visit from the President #30  
You hit the problem on the head!!!

I wonder how much Archer Daniels, etc... give in campaign contributions??? I bet they have their interests protected!

Joe R.
 
/ Visit from the President #31  
KPP ... "I" think that a farmer is definitely a small business owner. I just don't happen to think that they're treated as such. Non-farm business owners sink or swim - mostly on their own - with little sympathy from anyone ... not at all the way farmers are treated.
I hope I'm not appearing anti-farmer ... my point is that farming WAS a lifestyle ... but NOW it's a business ... but not treated completely like a business. When's the last benefit you saw for Joe mom-and-pop-shop who's losing the family store?
Yeah ... you have a point about what you're paid ... so does the rest of the crowd involved in the "you want fries with that?" crowd. The trucker also has expenses, so does the broker, the MickeyD owner has to pay MickeyD plus pay that youngster (or oldster) and still sell the fries for a loss (Biggee Size or Super Size or whatever). He's not selling your spuds ... he's selling your spuds that have been delivered, peeled, deepfried, seasoned, packaged and handed over with a plastic smile. Obscene profit? Maybe by MickeyD ... but how about the individual franchisee?
You want to make the $6.00 a pound that they're charging for your spuds? OK ... build a store, hire people, advertise to the degree that people equate orange with MickeyD instead of Kubota ... and maybe you'll make money ... or maybe not.

On your comments about the Fortune 500 companies. I happen to agree about the obscene salaries those guys make (more so, sicne I wotrk for one) ... but you think they're different? I remember wondering why we'd sell something under the cost of production myself ... terrible business model ... but somewhere, somehow, it is written that market share is worth something. I don't happen to believe it ... but then I don't happen to understand how you can sell a business and have a certain amount of proceeds based on "good-will". Of course, if a company keeps selling for under the cost of production - for whatever reason - they'll soon go the way of the Internet startups and the DoDo Bird ... extinction ... and Willie Nelson won't consider a benefit for them. Run a farm into the ground and your family suffers ... run Enron into the ground and, apparently a lot of families suffer.

You don't like middlemen? Well, neither do I, but they certainly abound ... and seem to serve a need. They aggragate when supply is fragmented, and also perform the reverse. You don't buy your fertilizer directly from Monsanto or whomever ... you buy it from a wholesaler or, more likely a retailer. You want to eliminate the middleman ... well, either you get big enough to completely supply Safeway ... or form a co-op so you're big enough to supply Safeway ...

Almost finally .... I get experience too .... but that doesn't help me stay ahead of my competition ... all those young guys getting out of college with all the new techniques and lots of book-larnin' ... so I gotta spend time and non-reimbursed money to keep myself better educated than my peers. Besides ... experience is just another way of saying "I served my time" .... "good experience" now (but who gets to define "good?). And I get to work 365 days/year minus whatever vacation I don't want to lose. Spend weeks away from my family whenever someone wants to meet in Holland or Brazil or Thailand ... all the while building up my little patch of ground so I can enjoy the farming lifestyle when I retire.

Finally (thought I'd never get here?) ... again ... I'm not anti-farmer by ANY stretch of the imagination ... I'm just in favor of balanced viewpoints. There are at least 4 sides to every story.
(ps ... nor anti-KPP !!)
 
/ Visit from the President #32  
KPP,

I agree with your theory but wonder if things would turn out as suggested. The lettuce shortage should be a small test to see if the grower really will benefit from a reduced supply and skyrocketing demand. Something tells me they won't.
 
/ Visit from the President #33  
Richard, Richard, Richard ...

Sorry I hit one of your sore spots ... I think we went around on this one once before.

I won't spend a lot of your time on this ... just throw out some food for thought.

Although the middleman certainly adds to the cost ... they do not control the market. Case in point ... lettuce prices have gone through the roof ... what happens? Well, me and my fellow lettuce eaters decide that we're not paying $3.50 for a head of lettuce no matter how short the supply is .... and suddently the price goes down as new production starts the meet the lower demand.

Greed? Hmm ... ok? But most are looking for a fair return on investment, as far as I've ever seen. Once that spud farmer sells his stuff for ten cents a pound .... what happens if the produce truck breaks down or the teamsters union goes on strike? Spuds spoil, farmers got his money ... teamsers settle for more money ... and the broker, middleman, whatever tries to collect insurance? Does he get $6 pound from the insurer? Not anywahere that I've ever seen.
I really have no idea what the average broker makes - profit wise - but I do know what big manufacturers consider a fair rate of return for production. "Better than the cost of investing meney". In other words, they'll only approve a project if the return is better than leaving the money in the bank (assuming they have any). It certainly isn't the profit that the real bad boys - the utilities that REALLY have the government in their back pocket - make.

Actually ... I don't know a lot about Cargill or any of the grain marketing here ... I'm more conversant with grain and beef marketing in Canada ... but I'll tell you what disturbs me a lot more than those guys .... and that's the companies that are eliminating the middleman ... AND the farmers ... by staring or buying farms themselves ... and usually using my tax dollars (via tax breaks and other cporporate welfair) to break the average farmer. To me ... there's the real bad guy!

Again, Richard, you know much more about the situation than I do .... you're closer to it and see more of it .... I can only go by my personal experience - which is with farmers that have made significant money over the years from set-asides, subsidies, insurance claims and other means . And by no means do I think they're the norm (or the only ones).

Me, as I said in my original message, I'm in favour of family farms and looking forward to - someday - spending most of my time on one.

Sorry again for tweaking you ... you should know by now I like discussion and dislike hurting people ....
 
/ Visit from the President
  • Thread Starter
#35  
Wingnut,
Oh gosh by no means did you tweak me. I was just presenting the other side of it.

Put this another way. What other company do you know of as a middleman that makes an average of about 600% profit margin from the wholesale product to the market? There is the problem. The farmer anymore has no control at all over his product. Like has been said you agree to the price or you don't. I was personally on hand when a friend of mine was talking to Pioneer for his seed corn. The guy came out gave him a price and Jack told him that's less than my costs even with the govt. money. The guy told him so what that's my price take it or leave it. If you don't like it Cargill will give you two cents less than we are. That's sad to me and completely unfair. The govt. has allowed the grain conglomerates to merge and form only a couple markets where there used to be dozens.

With regards to the govt. paying farmers I think that's a joke as well and I completely agree with you there as do most farmers. For the most part though what you see, or around here anyway, are family farms that are just trying to hang on. Yes there are your corp. but they are nowhere near the number of family farms left. The way things are going though there aren't going to be any left.
 
/ Visit from the President #36  
Wing, I wish to say, I never thought you were anti farmer at all.

Market share.. good point. Except, as far as the North American farmer is concerned, they HAVE the market cornered... a 'monopoly' if you will, on FOOD. Most everything sold for the basic foodstuff to stay alive, on this continent, was GROWN here. Yes, there are the odd rarities such as bananas, and of course, commercial fisheries... but farmers have market share sewn up.

I merely believe, if you speak to any person owning say, 200 acres, and using a figure I found elsewhere on this board, $4000.00 USD for one acre of tillable land, assuming decent fertility.. (thats $800,000 in assets for only his/her land btw) and ask them if they FEEL they are getting a fair shake for feeding all the USA/Canada/Mexico, that they would answer no. Most 'farmers' aren't farmers at all, anymore, they are employees of agribusiness, as you pointed out. But you see, farming as a lifestyle is NOT a suitable business model ! Not with the present systems in place... and the reason for this is, inheiretence taxes practically destroy the chances to keep a family farm in the family, so that land gets sold to cover the taxes.. property taxes for 'raw' land only cleared for cultivation that in some places are simply astronomical. Therefore, these agribusiness corps are doing QUITE well, and they MAKE the market move as they wish, since their conglomerate not only sells the seed, the herbicides, pesticides, but they also have interests in the buying of the harvest.. or perhaps another conglomerate has no land, but has interests in the seed company, the chemicals, and buys enormous amounts of crops.

Point being.. Intel can sell to whom it freakin pleases (yeah I saw the censored in my previous post.. all I typed was d*amned) and Dell, Gateway, and the other PC makers can go suck eggs. Farmer Brown is STUCK. He can't sell his taters/beef cattle/apples to anyone but the commodity brokers. THEY are the real wholesalers, NOT the producer of the actual crop.

Food is considered by most, to be one of the basic needs in life, for absolute survival. All that infrastructure needed by Mcdonalds merely contributes to the END price, not to the actual WORTH of the product, with the single exception of cookin it. Yes, there is a HUGE amount of jobs/employment and so on, to support that order of fries (would you like a hot apple pie with that?) So my question is.. what happens if we just cut OUT that middleman between Mcdonalds and the hypothetical Farmer Brown with 200 acres of taters... maybe Farmer Brown would be able to make a good living as an independent and family farmer, passing his land to his children along with the traditions and knowledge gained.. (assuming taxes are somehow lowered or made reasonable) as well as, Mcdonalds might be able to cut the cost of aquiring said taters, thereby reducing the price to the consumer. Of course, since we're doing this, we HAVE to eliminate all price supports, and govt friggin interference. Believe me, I have WORKED for the Fed gov.. we had a standing joke:

What is the single biggest lie ? "I'm from the govt, I'm here to help you"

Anytime you involve a bureaucracy, it tends towards self sustaining, self perpetuating, useless entropy. This is true whether we are speaking of a governmental entity, or a huge internal corporate structure. There WILL be people that will send your forms back, because you did not give an email address... whether or not you have a computer.

I think, Wing, we are on the same page.. but spouting different rhetoric. I want no part of govt subsidies, nor price supports nor protection. Hell, right now, China can grow, export and sell their apples all over the USA for less than what I spend to spray my apples with Surround during a season. I won't go into the obvious political ramifications, but one bite of MY apples, is all it normally takes to sell 5 lbs. However, for the vast majority of this continent.. or even my own living area, there is NO chance to compare.. the chinese apples are killing all the apple growers in Washington state.. so I make my entire crop, specialty apples that we remember from childhood. Cider, the RIGHT way, not the pasteurized homogenized, de-taste-ized crap they sell at Safeway. Heck, I even give lil bits of yeast for personal fermentation experiments, and vinegar mother acetobacter for apple cider vinegar.

My business model WORKS, because where I live, there is enough older folks to recall what real apples tasted like, what real cider was like, and letting cider turn hard, on that first frosty night when you let Mother Nature distill your cider into apple schnapps. I sell bakin apples (everything EXCEPT granny smith) because real dessert apples have that unmistakable tang... that granny smith lacks.

And you're right btw.. in order for you to keep up with these young people exiting college with their eager little smiles, you had best keep up your education.. just as a farmer dang well best keep up his experience in planting schedules, watching the weather, determining when is best to spray, watching his weed level, sprayin for critters.. maybe it does not sound equitable to you, but I assure you, each time he made a mistake, it cost him, and he WILL remember.

Farming IS a business, but no, it is NOT the same as designing software.. and the govt only cares about software if its Microsoft.. (ooops wait, Bush got rid of that lawsuit) whereas they have NO choice, regarding food. If the crutches are yanked out, from the farmers support, without a commensurate elimination of artificially low returns on investment, then we ALL starve.

Oh and yes.. that also means a hell of a lot of people lose jobs. This has been building to this final point, for more than 70 years, and has become exponential since the late 1960s.

So, Wing.. what do we do? We cannot lose the subsidies, unless we eliminate the low prices too. We cannot lose the low prices for harvested crops, without basically gutting several large multinational agri-conglomerates. Monsanto may not sell me the fertilizer.. but they make it.. and they own stock in the companies that would buy my apples. I asked, they do.

And finally (ditto your comment) I really agree with you.. I wish we COULD go back to family farms.. hard work gave good returns and we fed our kids and raised em right and pretty much ignored everything outside our community. Those days, however, are gone. Our population exploding, our tillable, arable land, shrinking, and thousands of family farms going to either real estate speculation, or agribusiness farms... I just don't see it happening, rather, the opposite. When I was very young, I recall my great aunt in Macomb Illinios getting a sign to put on her fence, *Heritage Farm 100 Years* for having a farm that was in the family for over 100 years. She threw it away and said, if I can't sell my cattle for what it cost to raise them, why even put the sign up?

Two years later she sold the majority of her acreage to Western Illinois University. Now, there are empty dorms where cattle used to grow along the crick.
 
/ Visit from the President #37  
That's just it Pitbull.. it probably won't. Too many folks would have to plant just to stay alive themselves. Sure, they could plant a garden and eat it, raise a calf for beef, but they still have to pay taxes and other stuff, insurance, gas for the truck.. just no way someone can simply STOP.

As for the lettuce situation, I doubt very seriously, whether the grower is gonna see a dime, but I will bet you a C note, you and I will pay more for it.

Wait.. I grow my own.. ok YOU will pay more for it :)
 
/ Visit from the President #38  
How much is too much profit? Especially, when these companies are forming a monopoly or duopoly, etc... If you can't compete you buy out your competition and control the market. Then the controlling party becomes politically influential and makes sure that the government does not interfere with their plans. If you can't buy out your competition, you sign an agreement with them and once again ensure you have control of your market. Reminds me of the drug gangs that take over street corners...


Joe R.
 
/ Visit from the President #39  
Richard ... it's so hard to separate content and emotion from a posting ... I did really think I'd annoyed you ... glad it wasn't so. No wonder these flame wars start, huh?

I guess my major problem with this topic - as presented so far - is I have never seen these figures before. Yeah, I'd certainly agree that 600% is "excess profits" ... but I have no way of validating the 600%. I can remember from my beginning-to-work days when I drove a forktruck in a Sears warehouse in Edmonton ...an d how horrified I was to see the 100% markup on the items I was moving around. 125% on the baby stuff like cribs.
It was a long time before I understood what a markup was and all of the inputs that went into it ... and finally realizing that Sears considered 5% profit a big deal.
Does the 600% profit already exlude the cost of those elevators, transport, etc, etc, etc.
My world is a little different ... I buy FOB and sell delivered due to regulations and to product stewardship issues ... so I have a bit of control over the transportation costs ... but man-oh-man ... do those costs ever increase the product price ... and all I sell is raw materials. And I have to deal with middlemen ... because the cost of selling to you would increase your cost to the point you'd be shopping elsewhere. The middleman stores my products, breaks the tankcar or tanker truck or truckload loads into consumer sized lots to sell. He has to track whom he sells to and report that to the government. He has to ensure that all the containers that he sold are accounted for so that the EPA doesn't shut him down. It's very seasonal ... and tied to both the economy and to the weather ... hmmm ... sorta sounds like farming.
Cargill ... well the only thing I know about them is they're competing with the Canadian Wheat Board, and other countries that more directly sponsor or subsidize grain sales. They spend an inordinate amount "advertising" and they sure have a huge budget for research .... I'm not raising my hand in favor of enhanced grains (nor am I against it) ... but the seed they're trying to perfect is not so they can own the world ... it's so that the product grown and harvested by the farmer is more likely saleable. It seems to me they're every bit as tied to good weather, bad insects, blight, rust, etc as the farmers are.
Finally ... I'd say that this is actually the worst crop we could be analyzing - KKF's apples might be far better. The reason I say that is that grain "farming" is so far away from ranching, mixed farming and small crop farming as it's possible to get. Yes, the price isn't always good ... but even with huge farms, the work involved is minimal ... and the risks are so often covered - in large part - by insurance. I know way too many grain farmers in Canada ... and my brother-in-law is a bank manager in a completely Ag area ....
 
/ Visit from the President #40  
The real numbers in these discussions <font color=blue>are</font color=blue> pretty hard to tie down. Does anyone see an analogous situation with gasoline prices? At least here in mid-Missouri, there appears to be absolutely no competition on gas price. Every station in my area makes price changes in lock step. What's this got to do with food prices, besides the obvious energy cost to produce food? Well, in our society, gasoline has become a necessity, just like food. This is true for energy in general, whether it be electric or natural gas, or whatever. Except for those few souls who have managed to live "off the grid", we are at the mercy of energy monopolies. In the case of farmers, the commodity purchasers have formed near monopolies, and now control the prices they will pay as well as what we pay for them. Food, energy, healthcare... the free market has trouble dealing with some of these, and governments can obviously screw up any "adjustments" they try to make to keep the masses supplied.

Chuck
 

Marketplace Items

JMR TREE BOOM (A61572)
JMR TREE BOOM (A61572)
PALLET OF TIRES & WHEELS (A63291)
PALLET OF TIRES &...
Snap-On Gold Medal Tribute to Excellence Limited Edition 3-Bay Tool Box (A63689)
Snap-On Gold Medal...
PT 1000 Gallon Supply Tank (A57149)
PT 1000 Gallon...
AMVAC SMART BOX PARTS (A63291)
AMVAC SMART BOX...
Flex King KM 7 Section V Plow (A63688)
Flex King KM 7...
 
Top