2007

[Corley5]

The increase in the cost of corn is going to lead to a dramatic increase in the price of milk and meat at the grocery store.  It's gonna have to be passed down the line.  We'll have high fuel and food costs  : :(

[Tom]

Well now.  Don't fear.  The Government might sell back some of those Dairy Farms they shut down when they were trying to manipulate prices the other way.  :D :D :D

[SwampDonkey]

Gary, I guess I never really rationalized what I wrote. But, you have to understand my uncle's thinking.  ;) If they looked contented, and they did, he was happy. Only had to call for the cows when it was time for milking and they came eagerly. He talked to his cows like they were puppies. ;D :D I don't know his rationale behind the corn thing and am not in a position to argue about it.

I'm sure someone worked out what cows need to maximize production, they needed to as costs go up and returns dwindle.

....some (hobby) farmers go for contentment and have never made a living at it, so I just take certain thinks with a grain of salt. Some uncle's have their ideas and their nephews won't attempt to alter them, just keep the peace. ;)  :D

[SwampDonkey]

Well now.  Don't fear.  The Government might sell back some of those Dairy Farms they shut down when they were trying to manipulate prices the other way.  :D :D :D

They don't even have to justify it that way. They finance the farm to a new immigrant as long as they have an Agricultural College degree of some kind. So what happens is the son of the old farmer in most cases can't get finances to purchase the farm unless they attend Ag college, so it gets sold to an immigrant who gets government purchasing subsidies. In most cases the next generation is not interested in farming. If there is interest there, the parents feel they will be dragged into a situation where they may loose their life savings to help out the son if there is a crisis. If it were me, and I know it would be hard to do this, but I'de hand over the keys after we worked out the legal financing of the farm purchase to the next generation and let the chips fall where they may. Go on with life, and let your son or daughter run it, sink or swim. Go to your workshop and make wood bowls or something. ;)

[Gary_C]

SD

Yes, I know exactly how your uncle felt and he was somewhat right in his thinking. Cows actually are healthier eating oats rather than corn and grass rather than alfalfa. Cows that are fed these newfangled "hot" rations have more health problems and can easily go off their feed and then it is hard to get them going again. Just like humans, you have to keep your forage (fiber) intake up or things don't come out right in the end.  ;D

[Norm]

We've had grain prices this high and much higher in the past. What gets passed on we'll see but keep in mind that corn is not the sole source of feed for most meat sources. Piggers and poultry use much of it but it is mixed with other proteins such as soybean meal. Cattle get fed much more roughage than you'd guess, corn is just part of their rations.

Around here there is much talk of more corn on corn acreage and plenty of other land that is either not producing or is in rotations of oats, alfalfa and pasture. Yields keep getting better also, we averaged 200 bu corn last year with some better areas getting 240 bu. Input costs for farming have been sky high the last couple of years with no real increase in grain prices. Nobody in my area is driving a Mercedes. :D

[pigman]

Nobody in my area is driving a Mercedes. :D

You are right Norm. ;D Most American farmers prefer Cadillacs and Lincolns. It the European farmers that like the Mercedes.   ;)

Bob

[OneWithWood]

I think things will be marginally better in 2007.  Sort of like the calm before the storm  :

The real impact and reasoning for pushing ethanol as a fuel additive was explained at a Indiana State Soil Conservation Board meeting by Chuck Conner, who if I remember correctly is the under secretary or assistant secretary for ag at the national level.  What he said in a nutshell is that the increased demand for corn to be used for ethanol production is expected to drive up the price of corn to a level that will cause the trigger for price supports to not be triggered.  If this comes to pass all the millions included in the farm bill for price supports will not be spent and will become available for conservation or budget balancing or whatever (read that as increases in military spending to rebuild what we have squandered).  Another bennie is that the hue and cry from some of our trading partners concerning our farm subsidies should subside.
I expect this will be a short term budget windfall that will gradually disappear as ethanol and other alcohols are distilled from bio mass.  As has been stated, corn is hard on the soil and requires large energy inputs to keep producing it on the same patch of ground.  It does provide a quick fix for now.  We are better at quick fixes than strategic planning but I see this as a step in the right direction.

[SwampDonkey]

Also, as far as acreage, there was a lot of land tied up as 'soil conservation' land. The farmer was given a subsidy to reduce his acreage. A lot of that land was let to grow back to woods. I see a lot of it in northern Maine, much of it grows back in aspen and birch and white spruce, just wild seed.

[Fla._Deadheader]

Stop paying farmers to NOT grow anything  >:( >:(

  Then watch the grain market. There are millions of acres laying fallow, and being paid to stay that way.

  There are other things to grow to convert to DIESEL Engine fuel, than Ethanol producing crops.  OWW, Buzz Sawyer, and several others on the forum are showing it CAN be done.  8) 8)  I'm trying to scrounge stuff right now.  ;)

[Ron Wenrich]

The only question I have about the grain markets, if they are putting as much acreage into corn as they can, doesn't that rob the other grain crops of land to grow on?  That, in effect, would drive up other grain values by lowering the amount of harvest due to less acreage.

[OneWithWood]

Kiss the CRP and other marginal land that has been converted into wetlands and wildlife areas good-bye  :(

Just before this push for ethanol there was a big push to get farmers to re up their CRP acreage.  Some are probably kicking themselves . . . .

[Gary_C]

Ron, you are right. In fact right now the price for soybeans is slowly climbing to "buy back acres from corn."

[SwampDonkey]

You guys are starting to remind me of the Mad Maxx movies. ;D

[Faron]

In my area a lot of that CRP land was pretty marginal, and never will produce much.

[Ed_K]

 "he talks to the cows as if they were puppies"
Now thats a farmer who LOVES his farm  ;) . A while ago we (Rita & I) tried to buy the family farm from her brothers. No bank or loan facility would loan us the money. But the FSA would have loaned 2.1 mil to my wife as a Women owned Business. Alas, they wouldn't sell to her.
Up here fsa won't let us plant corn on land with more than 6% grade, so a lot of land went into the land bank.

[SwampDonkey]

A while ago we (Rita & I) tried to buy the family farm from her brothers. No bank or loan facility would loan us the money. But the FSA would have loaned 2.1 mil to my wife as a Women owned Business. Alas, they wouldn't sell to her.

My father ran into a similar situation when he bought some family farm that was hiership. They wanted to sell to the big potato processor at first without giving dad the opportunity to buy. Then grandmother stepped in and set everyone straight. Some family folk sure are odd balls.  :

[timcosby]

the farmers problem is someone else sets the price he gets until that changes he is out of luck.

[Gary_C]

Yes, the best thing that could happen as far as the farmers are concerned would be if a tornado went thru Chicago and destroyed the Board of trade building and spread the ruble and traders all over Lake Michigan.  ;D

On Wednesday corn dropped 19 cents a bushel, not because of some supply/demand change, but because some large fund traders are taking their profits and backing off of some their huge long positions.  >:(

[Ron Wenrich]

But, if a farmer was happy with the price before the drop, he could ice in the sales price by selling a contract or so.  All of his harvest would have a guaranteed price before he even planted it.  If prices go higher, then just sell the contracts at a breakeven price. 

If you don't want to go the contract route, then buy puts where you can sell your crop at a certain price.  It acts as an insurance policy.  Its the same way your heating oil company can guarantee a certain price for oil all year long.  They can do it, so can farmers. 

[Gary_C]

Yes, the futures market is certainly a tool that can be used. However, there are very few times that prices have been OK and they are very fleeting. This year, all the ethanol plant start ups may change that.

The futures market generally is no place for farmers, the faint of heart, and the less well to do. The farmers tend to use their knowledge of supply and demand to make decisions, in other words they are too logical. Those large fund traders can and will react so much faster than ordinary buyers that trying to keep up can be very expensive. For example today the market recovered some of what it lost. That sell off may have been just checking to see if they could panic other traders and when it did not, it may start back up and even go higher. Or if the pension funds and large traders move their money into the stock market as I have heard they are going to, it may collapse again.

I think most farmers, myself included expect to see corn at $4.00 by spring when the barges start moving again. After all, they are not shutting down Ethanol plants, they are starting them up. But that thinking may be too logical.

If the farmers could just get stable markets at some reasonable price, they would be happy. However that wish is in direct conflict with the wishes of the traders that cannot make enough money with stable markets, regardless of where the price has settled. For example, two or three years ago in the spring, I was delivering my beans to the local bean meal plant. The dump station operator told me that beans just had to go higher because everyone was just about out and they may have to shut down the plant. I did not have any money to invest at that time, but I watched as a $10,000 investment in the options market rose to $30,000 in just six weeks. Its easy to see how those large fund traders can make so much money and will do anything to protect their control over those volatile markets. But you better have plenty of cash and plenty of reserve to play their game because it can just as easily go the other direction. And the traders have a million pat answers as to why it went the wrong way.

[TexasTimbers]

I'm just trying to figure out who the other guy on The Good Ship Optomistic is?

Ihere are only two of us. I'm wondering if he/she owns any cows. ???

[Rocky_Ranger]

I didn't know you could distill ethanol using a dry method.  Can somebody point me to a website that informs a reader or somebody here 'splain it to a country boy in words he can understand?  Can it work for wood residue too?

[Gary_C]

I am not sure about how they make the Ethanol but I do not believe it is a dry method. All the leftovers are very wet and they have to dry the distillers grains.

I do know they are working very hard and have made some Ethanol from switchgrass and next will the dry stover left in the fields like corn stalks. I do not know how fast that changeover will take as many of the Ethanol plants are coops owned by corn farmers.   ;D

[Norm]

DDG's Website

Here's a site that will give some info on ethanol production methods Rocky Ranger.

They are working on enzyemes that will break down fiberous material but it is still in the development stage.