Is the Second Farm Crisis Upon Us?
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Is the Second Farm Crisis Upon Us?
1–10 of 159 posts
Re: Is the Second Farm Crisis Upon Us?
#2 "A gallon of milk costs a farmer approximately $1.90 to produce, but in the last year, farmers have been receiving as little as $1.35 per gallon."
If it cost more to make it than they are getting, why are milk prices not higher?
Re: Is the Second Farm Crisis Upon Us?
#3"A gallon of milk costs a farmer approximately $1.90 to produce, but in the last year, farmers have been receiving as little as $1.35 per gallon." If it cost more to make it than they are getting, why are milk prices not higher?
Only thing I can think of is if the government sets price ceilings
Re: Is the Second Farm Crisis Upon Us?
#4The article only mentions land value once, and in my opinion this is a huge oversight. There's articles going back to 2010[0] that speculate that a land bubble had been going for a few years, and when that's coupled with quantitative easing it means that people had to borrow increasing amounts of money to buy an equivalent amount of land. Combine that with decreasing crop prices and additional debt load that was taken on as a result of buying/fixing equipment, and you have a perfect storm.
[0] https://www.tandfonline.com/doi/abs/10.1080/1350485080229797...
Re: Is the Second Farm Crisis Upon Us?
#5"A gallon of milk costs a farmer approximately $1.90 to produce, but in the last year, farmers have been receiving as little as $1.35 per gallon." If it cost more to make it than they are getting, why are milk prices not higher?
Milk is heavily subsidized in the US, to the tune of 73% of returns.
https://www.realagriculture.com/2018/02/u-s-dairy-subsidies-...
Re: Is the Second Farm Crisis Upon Us?
#6"A gallon of milk costs a farmer approximately $1.90 to produce, but in the last year, farmers have been receiving as little as $1.35 per gallon." If it cost more to make it than they are getting, why are milk prices not higher?
Agriculture subsidies. Farming in the US hasn't been a fundamentally profitable business for decades but the government provides a massive welfare program to ensure the survival of farmers, maintain a stable food supply, and keeping prices low for consumers.
Re: Is the Second Farm Crisis Upon Us?
#7This process of farm consolidation is inevitable. Agriculture benefits from economies of scale, even 2000 years ago the Roman latifundia fed an empire efficiently.
Re: Is the Second Farm Crisis Upon Us?
#8Are farmers not able to use financial instruments to hedge their costs? Simply borrowing money with no hedge seems VERY scary to me. I guess that's just the game?
Re: Is the Second Farm Crisis Upon Us?
#9"A gallon of milk costs a farmer approximately $1.90 to produce, but in the last year, farmers have been receiving as little as $1.35 per gallon." If it cost more to make it than they are getting, why are milk prices not higher?
Agriculture subsidies. Farming in the US hasn't been a fundamentally profitable business for decades but the government provides a massive welfare program to ensure the survival of farmers, maintain a stable food supply, and keeping prices low for consumers.
Yes and no. Some some farming is naturally profitable. But much is subsidized.
Re: Is the Second Farm Crisis Upon Us?
#10these aren't "farmers" these are big agricultural 4000 acres mega-farms. they took out huge loans and make ridiculous purchases ($400k tractors) and relied on pie in the sky subsidizes, some are to actually not to farm. if you have an oxygen machine and your power company threatens to turn it off, you can get a doctor's note to prevent this. They specifically go through this with you during collection and refer you to the program, which is a federal grant and state program. I helped my neighbor do this who is on an oxygen machine. She even got solar installed "just in case the rid went down"