Aug 29, 2014
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U.S. Farm Report Mailbag

RSS By: U.S. Farm Report, US Farm Report

Comments, questions, opinions...this is your chance to speak out regarding anything and everything reported on U.S. Farm Report. Viewer feedback updated regularly.

Viewers Speak: Input Prices, EPA & Storage

Apr 02, 2014

 ***Editor’s Note:  The following comments were received in response to the March 29-30, 2014 edition of U.S. Farm Report…

 

#1:  Dear Mr. Phipps, A year or so ago I made the comment to U.S. Farm Report that the farmer was nothing but a pawn between large conglomerates that supply farm products and large conglomerates that purchase farm commodities. You disagreed with my comments and told your audience that all I had to do was look at your tax return and see your profits to disprove my comments. I am in shock today (March 30, 2014) because it sounded like you said in your USFR commentary that the farmer was a pawn to large conglomerates that supply farm products. I realize this large farm conglomerates fund your USFR program so I don’t expect you to agree with me. Mark Lenertz

#2:  I am now "retired", but in the past worked for USDA SCS, Fortune 500 companies, co-ops and family owned business involving agriculture.  The greatest and most disappointing challenge came in 1980 when I could not convince several of the co-op customers to sell grain and liquidate debt before incurring more debt for land acquisition.  One of my biggest obstacles was overcoming lenders advice that "the land will always stand good for the debt".  Well, it didn't and in the farm crisis of the 1980"s, cash flow and debt serviceability became king.  If one does not know overall cost of operations and how to account for the same, then it is next to impossible to define cost of production for any one segment of the operation.  There are fixed and variable costs.  Variable costs where one item is a function of something else is the most difficult and all this has to take place in an environment where the producer has little control over prices received.  Capital, or fixed costs, must take place where long range returns are unknown, but costs are defined. Throw into that policy shifts by the government and marketing gets really complex.  How a farmer or rancher sells their product, outright cash, futures, options or contract will also determine rate of return.  While a lot of technology has helped lower input costs of fuel, seed, fertilizer and chemicals, it seems administrative costs like crop, weather and yield insurance has increased as the size of the risk increased.  The bottom line is you have to have an "understanding", not a complete algorithmic analysis, of your costs, a rate of return that is acceptable to you and a marketing plan you are comfortable with.  Otherwise, the discomfort will lead to bad decisions based on hope or greed. Victor R. Grunden

#3:  While driving my grandchildren to school this morning I was listening to a guest on 890 AM radio who talked about the 30 % less income that farmers will be making in 2014.  He seemed to have a solution to the problem.  He claimed that farmers spend too much on input costs and could pay less for such things as fertilizer, seed, etc.  It appears that person has no knowledge of how the ag industry works.  We are one of the only businesses that have to buy at retail and sell at wholesale.  While we have some control over our crop or livestock sales income, or loss, we cannot tell our ag input suppliers what we will pay for our inputs.  We pay whatever they price them at or we do not get them.  Pure and simple!  Anyone with any ag background at all knows that in low profit years we try to keep our input costs as low as possible without affecting our yields adversely.  And with Mother Nature always doing things her way, it can be a tough call to know how good or poor of a crop to expect.  Try going to J. C. Penney’s, Macy’s, Target, WalMart, Sears, or any other retail store and asking them at the check-out counter if they will lower the price for you.  GOOD LUCK!! It isn't going to happen.  Well it works the same in the ag sector except we can't open the Sunday paper and clip coupons for savings toward fertilizer, seed, chemicals, and livestock.  Hopefully things will change before the majority of us are forced to quit farming or just throw in the towel and apply for your jobs.  It gets very frustrating when we get a few good years mixed in with so many poor ones.  Our input costs go up dramatically in good years and never go back down to where they should be during the lean years.  Sooo, whoever that was on 890 Radio at 8:00 am today Mar. 28, get it right or please don't give the public the wrong impression.   Most of us have a pretty damned good idea where our money is going and would love to change input costs to our advantage.  Just Sayin' – Keith Stumbo

#4:  I shall be grouping John's theoretical correlation of the expansion of storage space with the expansion of the universe with my own long held theory that the chief force holding back the universe falling into a state of entropy is the presence of a certain type of woman to clean out and re-organize all closets in the household on a semi-annual basis.  I am now working on a high brow sounding name for our now conjoined theories- something to entertain the mind when reading the newspaper. Cindy Wilsey

#5:  Shortly after viewing the US Farm Report broadcast on Saturday, March 29, 2014, I watched FOX News discuss the new EPA Water Regulations.  The US Farm Report appeared to mix two issues into one.  First, Dr. Norman E. Borlaug's work to produce a new strain of wheat had enabled millions to be fed, who otherwise would likely have died.  Second, the celebration of Dr. Borlaug's accomplishment and the EPA's new water regulations appeared to me to be celebrated together.  Maybe I'm a little slow, but these two issues appeared to both be presented in a positive light.  Dr. Borlaug should be, but not EPA new regulations.  On Fox News (Forbes on Fox) the EPA's new rules received a different approach: "EPA plan to protect wetlands may give government power to grab homeowners land."  Senator David Viter (R-LA) Environment & Public Works Committee Member said, "The waters of the US' rule may be one of the most significant private property grab in US history."  Shouldn't the US Farm Report be presenting the EPA's growing control over private property owners be an important issue?  Land owners need to know that the EPA intent is really all about control. While I'm writing, I believe the US Farm Report should examine the reason Earth Day was originally established.  I'm assuming it will be mentioned in a future broadcast.  Earth Day began on what would have been Vladimir Lenin's 100th birthday, so instead of Earth Day, it's really a Vladimir Lenin's birthday celebrationUnder Lenin's leadership millions died due to the total control policies the US' EPA is now working to enact. Richard Champion 

 

 

 

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