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California farmers to destroy 420k peach trees following Del Monte bankruptcy

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Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#441

Post by s1artibartfast »

ToucanLoucan wrote: post #380
musicale wrote: post #358

Earlier quoted context omitted.

> Del Monte went out of business because there wasn't enough demand for the peaches They appear to have gone out of business because of massive debt from a leveraged buyout, combined with other issues. https://www.linkedin.com/pulse/when-private-equity-overcooke...

Somebody really good at the economy needs to explain to me how a PE firm buys a company using the company it’s buying as collateral for that financing, and then somehow, that acquired company is the entity that debt is attached to. Imagine if us poors could buy a Hummer EV financed against itself and then the truck had to self-drive for uber to pay its own payment, under penalty of being put in a crusher. Oh and you…

Yes, it is the same way you buy a home mortgage or get an auto loan.

You find a bank that thinks there it can make money from interest payments or collecting the asset.

it really is that simple. If self driving trucks were a good bet, banks would be happy to loan entrepreneurs money to buy them.

Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#442

Post by brailsafe »

co-ent wrote: post #198
brailsafe wrote: post #134

Earlier quoted context omitted.

You want BC Okanagan peaches. I've found them to be dramatically better than anything that's come out of the states for some reason. Granted, most of those would probably be coming from the western half of the country

I'll trade you for some Palisade peaches. Looking at year average temperatures the climates seem pretty similar, so I bet they are bomb!

Haven't heard of them, but I'll make a point to try!

Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#443

Post by IAmBroom »

AnthonyMouse wrote: post #394
happymellon wrote: post #392

Earlier quoted context omitted.

> Like if destroying the trees to grow something else was more profitable than continuing to sell the produce then why does it require a government subsidy? Because why pay for something when you can get someone else to pay for it?

"The industry has captured the government and is doing a corruption" is the thing consistent with the theory. The non-corruption/capture reason for the government to pay for it is supposed to be what?

An ideal solution, but not what is happening.

Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#444

Post by IAmBroom »

account42 wrote: post #437
gblargg wrote: post #423

Earlier quoted context omitted.

Yes, lower prices for a while, then very high prices and little availability for a long time. Think ahead.

Or just permanently lower prices because the previous prices were artificially high.

A glut is not permanent.

As for artificially high, when was the last time you heard someone complain about those awful, expensive canned peaches?

Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#445

Post by cogman10 »

jasomill wrote: post #353
nradov wrote: post #244

Earlier quoted context omitted.

Yes, I actually have farming experience. Farmers aren't naive about this stuff. They forecast future trends as best they can and will replace trees (or other crops) when it seems profitable. Newly planted fruit trees will generally start producing within a few years and output increases as the trees grow, then eventually levels off and declines as they age. A tree is just another capital asset with a limited lifespan…

People have this image of farmers as ignorant bumpkins, when owners of even small family farms are some of the most intelligent, objective, and economically-motivated businesspeople I've known. The first IBM PC I ever used was in the home office of a farmer who was using it for economic forecasting. And I grew up in the middle of a large city (for reference, I had an Atari 800 at home, regularly used Apple ][s at sch…

Who made the claim that farmers are ignorant bumpkins?

Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#446

Post by NotMichaelBay »

kelnos wrote: post #284
NotMichaelBay wrote: post #246

Earlier quoted context omitted.

It's definitely science, and it definitely doesn't work that way for most people. Also, "a few years" is a long time between deciding you want fruit and getting to eat it.

> Also, "a few years" is a long time between deciding you want fruit and getting to eat it. The best time to plant was a few years ago, the next-best time to plant is today. This feels like a weird argument; you can decide you want to grow your own fruit today, plant that tree, and continue to buy fruit for the next few years until it's ready. This isn't rocket science. For most people it's not particularly likely th…

I wasn't making an argument against growing your own fruit, I was just helping explain why a lot of people don't do it. Personally, I am trying to grow blueberries.

Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#447

Post by graeme »

musicale wrote: post #382
graeme wrote: post #364

Earlier quoted context omitted.

That doesn't change the fact that there isn't enough demand for canned peaches. If there were enough demand for peaches the farmers would sell the peaches, rather than destroy the peach trees.

The wholesale buyer is in bankruptcy, unable to pay the interest on debt inherited from the leveraged buyout.

I am confident that if a gold mine existed, and their wholesale purchaser went bankrupt, someone else would buy the gold.

Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#448

Post by dctoedt »

rayiner wrote: post #216
quotz wrote: post #82

Earlier quoted context omitted.

When I moved to the US from southern Europe I was so horrified by the lack of taste of any fruit I tried, particularly the peaches and plums. I moved back to Europe and not a small factor was the lack of good produce and food in general. Its just mind boggling how Americans dont revolt against this, stop buying shit produce and suppliers will notice.

> Its just mind boggling how Americans dont revolt against this, stop buying shit produce and suppliers will notice.m There’s a large swath of America that has a deeply ingrained mentality of “food is for fuel, not enjoyment.” It’s a Protestant idea that entered the culture and became ingrained to the point where nobody remembers the origins but are still influenced by it. I was in Iowa a few years ago, and the food…

> I was in Iowa a few years ago, and the food is awful. ... I suspect it’s always been awful, and people just don’t care about it very much as long as they get the calories they need.

Um: My dad grew up in Iowa, so I'd be there seeing family every so often. Years ago it struck me how many Iowans I saw there were ... not svelte.

Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#449

Post by quickthrowman »

AnthonyMouse wrote: post #366
Aurornis wrote: post #57

Earlier quoted context omitted.

A situation like this bring out many comments that reveal a very low understanding of basic economics (and a low rate of reading the article). Del Monte went out of business because there wasn't enough demand for the peaches. The company that purchased their assets is continuing to buy 24,000 tons of peaches, but the previous unsustainable business was buying a lot more. It's the excess fields that need to be repurpo…

> Del Monte went out of business because there wasn't enough demand for the peaches. Things are often more complicated than that. Del Monte was founded a long time ago and fruit trees take a long time to grow. As a result, as the originator of those trees, you're at a disadvantage because you have to pay for many years of maintenance and interest on capital before the trees bear fruit, and are then sitting on a load…

> Like if destroying the trees to grow something else was more profitable than continuing to sell the produce then why does it require a government subsidy?

Del Monte didn’t grow peaches, they contracted with farmers (long term, 20 year contracts) who grew peaches and then Del Monte canned the peaches. Del Monte was purchased with an LBO that loaded their books with debt.

Del Monte blew up and left farmers holding the bag. Paying the farmers to convert their land to grow something else prevents fire sales of the existing land.

Considering the market that Del Monte made for canned peaches, someone was going to grow peaches for them. The farmers may have mismanaged their risk, but I’m fine with compensating farmers that end up with worthless trees because of a leveraged buyout. If these farmers were forced to sell their land, some giant ag business would end up with the land.

Re: California farmers to destroy 420k peach trees following Del Monte bankruptcy

#450

Post by quickthrowman »

p1necone wrote: post #362
Aurornis wrote: post #288

Earlier quoted context omitted.

If you try to force production and sale hard enough, the sale price can even go negative. If your warehouse is full of peaches nobody wants, you might be forced to sell them for negative dollars to take them away. It's either that, or you pay to have the waste management company dispose of them. So the price effectively goes negative from trying too hard to force something to happen.

If you turn all them peaches into high proof alcohol they take up significantly less space...

There’s more than enough ethanol inputs already, corn.
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