Caught between a dollar and a dream

[near horse]

Along the subsidy line – they only kick in to pay farmers a floor price (not sure how that’s determined) when market prices are below the base or floor. When market prices are good, then no subsidies – isn’t that how it works?

Today I drove through town and saw grain prices on the commodity reader board – holy moses. Other than the last few years, those boards have historically had wheat in the $2 to $4 per bushel and barley around $100/T – it was like that for 15 years or more. Today I saw wheat at over $8 and barley over $200/T. That’s an incredible jump (I know it happened a couple of years back but it still floors me). Subsidies would not apply to farmers receiving those prices.

[J-L]

That’s basically how it works Geoff. They kick in as a price support. Most of the subsidies are aimed at row crops it seems. For my area there very little row crops. We grow some alfalfa hay and mostly grass hay, very little in the way of help with these. The way it works for irrigated grass hay is that the gov’t will kick in if the hay crop is under 50% of established yearly yields. If you make 51% you get nothing. You have to buy the assistance like crop insurance every year.
I can see why those guys (grain farmers) need this with the way the market is so volatile. My farmer friend has a budget of 1.25 million dollars, equipment payments, seed, rent, fertilizer, chemical, fuel, etc… When you’re putting that kind of money out it would be nice to know that you may not lose everything you own when say, sugar beets or corn, take a big fall.
He doesn’t really have an opulent lifestyle for all the money he plays with, but does seem to do quite a little better than the average rancher.

[jac]

In the UK we have such a mixed up system. Single farm payment is the main subsidy. This was based on what a farm was producing at a given date.. i forget the year now. Unfortunatly it seems to favour the big guys more than the small family farm..which i am sure the UK wants to erradicate BTW. There is also schemes in place for planting trees and maintaining hedgrows ??.. I think ultimatly the subsidy system will have to stop and perverse as it may sound it may be a good thing ..
John

[near horse]

I think your both right .

J-L It’s a pretty vicious cycle to be in. Once you’ve committed to it, it’s hard to see how to get off.

JAC – it does have to end sometime but it’s like the “not in my backyard” syndrome. Politicians will cut subsidies for crops not grown in their own states – otherwise it’s political suicide. The guys with the best complaint here are the animal producers (except for dairies). They don’t have a floor price and no subsidies – while they have to buy commodities to feed that are supported. Crazy stuff.

[jac]

What I cant get my head round is the fact we in the “developed” world are told we cant give grain to the countries that are starving because it would undermine their grain market !!!!! if the countries people are starving why would their grain be for sale in the 1st place :confused:.. but I suppose if you have half baked zelots like mugabee running the show anythings possible..
John

[J-L]

You may be right John about the subsidy programs. In the livestock industry here we have to learn to live with the ups and downs. Save for a rainy day so to speak. It becomes a problem when you have too many rainy days in a row.
Good insight there Geoff. We cattle producers are tied directly to many of the grains. The downside of the ethanol boom has been the effect on my end of agriculture.
I would not even begin to think I could figure out what to do with the starving countries of Africa. So much turmoil and no stability.

[Russel]

In South Africa we always complain about a lot of farm products coming from the americas. In the case of beef: Argentina, Brazil and USA flood our markets with cheap beef. Maize, Soya and a host of other cheap imports are causing similar problems. The stupid thing is we (South African farmers) produce enough food for our country as well as supporting quite a few neighbouring ones.

On maize, we cant possibly compete with imports because the imports are cheaper than even our production costs!!

[jac]

We have the same problem here??? New Zealand lamb comes halfway round the world but is “allegedly” cheaper than our own Scottish lamb ?? I fail to see how that can be possible but there you go..
John

[Jim Ostergard]

Another example of the crazy use of full comes from the Bering Sea. I fished out there a while back and my son is there now. He chases cod, and various flounder. The head and gut them and freeze the whole fish. When you’ve got a load a tramper comes alongside and the whole frozen product is off-loaded and then the tramper makes for China where the product is partially thawed and filets cut. This product makes its way to markets world-wide. In some cases the fish is split and salted and shipped to Africa or Brazil. A friend who was at the time captain of one such vessel did a rough calculation of the amount of fuel used in getting these product to the market and although I’ve forgotten the numbers it was staggering.
Now here on the coast of Maine a group of fisherman have gotten together, got a small plant going shoreside and produce a high quality product which they sell at local farmers markets as well as through a CSA type program. This keeps the money very local and gives folks the chance to support the families of the fishermen. I also allows them to keep the infrastructure at their port in place. That infrastructure is pretty much gone in other small coastal ports as it cannot compete with the high real estate prices that folks pay to have a house on the shore.

[Robert MoonShadow]

That is an excellent idea! I’m glad you shared it with us – I hope they continue to do well.

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