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#1: The USDA Crop Report will prove to be as incorrect as last year's summer report. We are a farm machinery dealer and talk to equipment retailers across the country. Eight of ten dealers report poor, late and replanted crops. Few see the "switch" to corn. 'Protection' is a word used almost everywhere. My daughter works for a major grain corporation and they shrug their shoulders in disbelief. The input for these reports is worth looking in to. Private sector reports are proven much more reliable. Keep in mind our taxes pay for these "guesses" and guessers. With the budget crisis at hand, maybe it is time to look to the private sector, prune the 'Ag Tree' and save the expense of the majority of the USDA and other government agencies who have redundant bureaucracies at the state level. Tim Brannon - B & G Equipment - Paris, TN
#2: I am a retired dairy farmer from the southern tier of NY, near Corning. Corn here is anything from ok with bad areas in the field to not planted at all. One farmer's field is typical, corn 6 inches high about the same height as the weeds. We will not have enough here. I received a call from an old friend in Oxford Conn. He told me that the front page of the Waterbury Republican had a picture of a drowned out cornfield there. Its caption said, Don't worry USDA says we will have a bumper crop. With 6 million acres gone in North Dakota and North Dakota listed as one of that states that had increased corn acreage in this report and Ohio, where only around 20% had been planted
by June 6th being another and the millions of acres flooded, the drought in the southwest, and the crop reports on your own webpage, it is clear this report is bogus! But why you ask would the USDA lie?
1. By lying they crashed the corn market, allowing major campaign contributors to buy corn cheap. They stand to make billions.
2. By lying they damp down inflation for a time and let end users buy low now. There have been too many headlines about food inflation.
3. It keeps the ethanol plants in business. The vote to end subsidies runs counter to the Administration's green agenda.
4. It allows the Chinese to buy corn well below market price. Everyone knows they have trillions of dollars and are holding a gun to the head of our bond market.
If the Chinese dumped bonds interest rates would explode, exploding the debt interest payments. Go from 1% interest on a 14 TRILLION debt to 10% and see what happens to your payment. Every farmer knows full well what that is like! But what of the unintended consequences?
1. USDA will wind up losing all credibility. No one will believe their reports again.
2. Somebody lost huge amounts of money on margin calls and was in effect robbed.
3. Most importantly the market was manipulated! Like any manipulation where the price is artificially depressed by manipulation, the piper will have to be paid.
Will those futures contracts be honored or will the people who sold those calls be in court? The market is not rationing demand when it should be. So the shortage will be more severe when the combines roll. Instead of $8 corn then will we see $20? Will we let loose hyperinflation as 2 bushels of corn have been sold and only one is in the bin?
And what of the innocent farmer who sold his crop and finds he has to buy corn to fulfill his contract? Will he be able to declare force majeure and void the contract? This could destroy the entire grain marketing system. What good is buying protection or insurance if you just don't get paid when you have a loss? Or will he lose his farm when he has to pay twice what he received for his crop to fulfill his contract? Will the Chinese or Sorus step in and buy his land for pennies on the dollar? We could wind up having to pay Sorus and the Chinese for our own food. Wonder if they will let the Federal Reserve print the money.
Bet a dollar to a doughnut they will not and bet the doughnut will be worth more than that dollar!
John Geis - Addison, NY
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