Friday, November 21, 2008

Now it is US land prices falling, farmers in trouble

Fields of Grain and Losses

David Kanable at the Oregon Farm Center, a mill near Madison, Wis., was paying $7.25 a bushel for corn in June. “We never had a farmer lock in at that price. They wanted $8,” Mr. Kanable said. Now this Thursday, the mill was paying $3.17 a bushel. When commodity prices were feverish, the price of good farmland exploded, too. Cropland values rose about 20 percent in the Midwest farm belt last year, capping a multiyear rise. The market for land is definitely weakening. One reason is that the investors and part-time farmers are once again dropping away. " Farmers are trying to survive by cutting costs, planting less, using less fertilizer, owning cattle instead etc. Plan for food shortages ahead I recon, unless the dollar drops and US farmers can be profitable again.

Posted by mountain goat @ 11:35 AM (1025 views)
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10 thoughts on “Now it is US land prices falling, farmers in trouble

  • planning4acrash says:

    This could happen two ways, you could get Congress enforcing contract on unconstitutional fiat and let China, et al. buy the land and get guaranteed delivery. How did the Irish famine occur? Mainly because the British were taking all of the crop, via fiat. Alternatively, we could get all the latent family farmers buying small holdings and meeting local needs, alongside a much less dominant corporate export sector.

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  • planning4acrash says:

    Woodland for sale – Already some bargains for productive land! Much more productive than a shoebox in London!

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  • P4C @1. did you read this? “South Korean company takes over part of Madagascar to grow biofuels
    The African island state of Madagascar has agreed to allow a South Korean company to take over huge tracts of its territory for farmland in a deal showing the worldwide scramble for resources across the continent..” Telegraph

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  • planning4acrash says:

    Yup, its a fascist public-private takeover of THE WORLD!!!

    Get out of debt, n strap yourselves in.

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  • read a book (I think called 5 acres enough) about a canny fella in the 1920s who went self sufficient at the time of the depression. I posted it on here before – the comment from the book that most struck me was his description of what happened as the depression took hold. Debts going unpaid (don’t have anyone owing you money!) unemployment rising, migration from rural to urban (in search of jobs) and subsequently falling land values – particularly rural. The effect is probably not going to be so great this time, cos I guess back then it was all smallholdings rather than big agri-business, but since reading it I have been waiting for my chance to go self sufficient. I’m hoping this is the first signs…

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  • There’s no worldwide scramble for resources in Africa. As far as I know it has been informally agreed that China and the far east have already been ‘allocated’ Africa, while the US concentrate on the Middle East. This can be seen in where the various countries choose to intervene and stay away from.

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  • inbreda – would be most appreciative if you could find the exact title of that book – could not find one fitting your description on Amazon.

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  • The problem with US farming is it is heavily subsidized. No encouragement for efficiency or diversification. Since the US has no spare money funded by other economic sectors to fund the subsidies, the US farmers will have to become cheaper and more efficient.

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  • Wheat futures market is responsible: unregulated trading by speculators caused a boom, then a bust. The chart follows much the same parameters as the oil futures market because they were and are linked through commodities indexes, and some speculators were just apportioning their trades through the index weights.

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  • @8 – The subsidies go predominantly to corn, wheat, soya, rice and cotton. These subsidies are still very much in place but the beneficiaries are not small- and medium-sized farmers. They are corporate farms, big processors and export companies, and all three are often under the same ownership and control. These companies have bought up large amounts of farmland in the US because they know that the subsidies they will collect will make such purchases viable.

    The companies which benefit from these subsidies have grown enormously on the back of them. Since the Marshall Plan the exports of these subsidised crops has opened markets around the world to American food and influence – the same kind of imperialism that European agricultural subsidies have also made possible. Many of the ingredients of processed foods are derived largely from these crops, and three or four companies, mainly American, have gained massive oligopolistic positions in the world food chain, all based on these US subsidies.

    These companies are privately owned and few people even know their names, but their power over governments is immense and it’s unlikely that the subsidies will end any time soon. One of them, Cargill, illustrates how influential it is in its brochure – “We are the flour in your bread, the wheat in your noodles,, the salt on your fries, the corn in your tortillas, the chocolate in your dessert,, the sweetener in your soft drink, the oil in your salad dressing and the beef, pork and chicken you eat for dinner. We are the cotton in your clothing, the backing on your carpet and the fertilizer in your field. They are also the animal feed in your cows’ milk, the emulsifier in the fat in your ready meal, the sterols in your margarine, the soya proteins in your veggieburger, the frying medium in your fried snack etc. It’s also a major commodity broker, banker and derivatives trader. Its unofficial biographer says ‘It is the undisputed ruler of the global grain trade and extends its tentacles into every aspect of the global food system’.

    It is also responsible for much of the deforestation of the Amazon rainforest – its soya latifundia in Brazil clear the forest rapidly because without leaf-fall biomass the soil is quickly depleted and, hey, it doesn’t cost much (if anything) to take over a new area of forest and clear it – in many cases with (literally) slaves (although Cargill of course doesn’t use slaves directly and is, of course, against the use of slaves in the same way that clothes retailers are against Asian child labour).

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