Ethanol?

McFarmer said:
And buying E-85 is strictly a choice some make.[/QUOTEC

That is true but there was a push for E 15. There is too much of all commodity crops. Hay and corn are about the same price per pound and hay costs much less to produce. Grass is much better for the soil and wildlife. We are out of balance, too much grass was converted to crop land as a result of ethanol and crop insurance.
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Haymaker is spot on with the grassland converted to crops, which correlates to an earlier post that we need our cattle farmers. In my business I have to learn to adapt and look for niche markets. I’m in the clinical lab industry and our business has evolved over the years, if we did not adapt we would not have made it. My point is farming is probably not much different, you too have to adapt. As you drive across the state of Minnesota to our western boarders it’s a sea of beans and corn, and people wonder why grain prices are so low... allowing crop insurance on low/marginal land did not help the cause.
 
McFarmer said:
We can agree on the effect of crop insurance anyway.
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Following a year in which 3.9 million acres of cropland were not planted just in South Dakota we still have unprofitable prices in all commodities. Surely we have too many acres in grain production. With ethanol supplies being very large and corn planting intentions appearing to be large it seems like it will be more of the same or worse. At some time this will affect land prices. Am I wrong about that?
 
McFarmer said:
We can agree on the effect of crop insurance anyway.
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As they say common sense isn't common. The bottom line is that battling the existing bureaucracy is like the guy battling the windmill. Just frustrates you and eats away at your life. The end result is that most farmers are like everyone else and they need to look at the bottom line for their situation. I have relatives that farm and they make decisions that give them the best chance at a good income, just as I had to adapt and make decisions for my business that gave me the best bottom line. Unfortunately those with the biggest bank account make the rules everyone else has to adapt to.
 
haymaker said:
Following a year in which 3.9 million acres of cropland were not planted just in South Dakota we still have unprofitable prices in all commodities. Surely we have too many acres in grain production. With ethanol supplies being very large and corn planting intentions appearing to be large it seems like it will be more of the same or worse. At some time this will affect land prices. Am I wrong about that?
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Lenders and others who depend on maintaining land values will try and bridge these times until better years come along.

If not successful at some point someone will decide he wants to get while the getting is good and the dam will break. You don’t want to be the last one to have a sale. It may feed on itself and over correct. Big money will come in and consolidation will accelerate.

Or not.
 
So the BASF, Monsanto, Corteva (Dow), Cargill, ADM and all the seed companies profit from every acre planted, treated and harvested ... right ?

Same with the combine, tractor, and implement dealers ...

While they of course want to see their clients be successful with more bushels per acre, etc... they do not make money on less acres planted.

CRP cannot compete with land lease rates and crop insurance ...

So I fear the only thing that will change this and bring CRP back is massive farm failures (bankruptcy) ... farm failures help develop and generate interest in the CRP program some 30 or so years ago.
 
I would think just the opposite, bankruptcies would lead to larger corporate farms coming in and buying things up which would equate to more row crops.
 
Up until recently CRP more than competed with land rental rates and crop insurance. The current USDA slashed CRP rates. Our rates went from $328/acre to $189/acre while cash rental rates haven’t declined much if any. Not saying that is right or wrong, it just is.
 
Drake1 said:
I would think just the opposite, bankruptcies would lead to larger corporate farms coming in and buying things up which would equate to more row crops.
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if the farmer couldn't make it due to low commodity prices, why would big ag groups want to climb the same steep hill?......they may will be the new CRP participants, at least until things change.
 
hunter94 said:
if the farmer couldn't make it due to low commodity prices, why would big ag groups want to climb the same steep hill?......they may will be the new CRP participants, at least until things change.
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Those large operations can add a farm to their work load without increasing their machinery or labor costs much if any. They also buy inputs cheaper than most farmers can. For the most part they do have a lower cost of production, and, if they add a few acres it lowers their cost/acre on everything else.
 
McFarmer said:
Those large operations can add a farm to their work load without increasing their machinery or labor costs much if any. They also buy inputs cheaper than most farmers can. For the most part they do have a lower cost of production, and, if they add a few acres it lowers their cost/acre on everything else.
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You hit the nail on the head. It is the Walmarting of the farm world. Larger volume, cheaper help, and they can compete better than the small operators.
 
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