Posted on 07/12/2018 4:59:13 AM PDT by reaganaut1
When pork prices collapsed amid a global trade war during the Great Depression, the Roosevelt Administration in 1933 had an ideaslaughter six million piglets. Put a floor under prices by destroying supply. It didnt work. Now the Trump Administration may try its own version of Depressionomics by using the Commodity Credit Corporation (CCC) to support crop prices walloped by the Trump tariffs: Hurt farmers and then put them on the government dole. How about not hurting them in the first place?
Thats the question as Mr. Trump escalates his trade war, on Wednesday proposing 10% tariffs on $200 billion in additional Chinese goods. China says it is shocked by the new border taxes and will look to retaliate againand no doubt U.S. agriculture will again be one of its main targets.
Enter the forgotten but alas not gone CCC, the financial institution that FDR charged with solving the problem of depressed markets caused by weak demand. Farmers were told to plant less in exchange for a floor under prices. The CCC financed the purchase of surpluses through nonrecourse loans to farmers, and held the crops in storage.
When market demand improved, the Agriculture Department was supposed to sell the stored commodities at higher prices. Nonrecourse meant that the farmer didnt have to repay the loan, and the USDA often couldnt unload the surpluses because demand didnt recover.
The Depression ended but the CCC kept going. In 2012 Congress put limits on CCC purchases of surplus commodities and on price supports after the Obama Administration used it for a costly 2009 disaster program without Congressional approval. But then out of the blue this year, Congress lifted the limits on CCCs power to remove surplus crops from the market to support prices.
(Excerpt) Read more at wsj.com ...
I think that's more about growing conditions and seasonality than labor.
America used to grow more than enough to meet the nation's demand for most of these ... when fruits and vegetables were only available in the supermarket when they were "in season." Imports made it commonplace for fruits and vegetables to be available at pretty uniform prices for the entire year. Imports also give us access to agricultural products that are difficult to grow here without heavily mechanized, energy-intensive operations (bananas, coffee, etc.).
It cost farmers $450 and acre to plant corn
200 bushels an acre yield @ 3.00 per to sell
Now you have rent or mortgage payment
Real Math
Lets make it real easy math
$450.00 and acre for Fertilizer, herbicide, seed, fuel, insurance, labor, repairs.
$100 and acre for equipment and building loans
$250 an acre for rent for the land
$750 an acre cost of production.
200 bushels of corn times $3.25 per bushel equals $650 and acre
$650
-$750
-$100,000
How many of you would like to work all year for the privilege of owing the bank 100K???? at the end of it all
Your detail/sequence of probable events is Randian, i.e. out Atlas Shrugged. Well done, FRiend. Its a shame that certain posters only know how to respond with vitriol and personal attacks.
Thank you! :)
That's a relatively tiny niche market. More than half of all hogs are raised on contract, or by corporations and partnerships. Of hogs raised by 'family' or 'individual' farms, the overwhelming majority are very commercial operations.
Even heirloom and pasture-raisedhogs are frequently a sideline for a more commercial operation.
So, any 'bailout' of pig farmers (a stupid idea to start with) is going to overwhelmingly go to large commercial operators.
Not necessarily.
We would be classified as a "small farm" and have paid seasonal labor $15 an hr for the past 3 years, $13 before that. No way possible to pay unskilled labor $20 and hr. and still make a profit. Every year it's increasingly difficult to find workers, much less reliable ones. We hear the same story from all the producers. Anybody that wants a full time job, has one. The workforce that's left has all sorts of reasons for not working, I suspect just not wanting to and being able to live off of someone in the family who does work.
We hire no illegals, and have never gotten a government subsidy of any kind. The Chinese tariff on our product was 22% which has been raised to 47%. Probably a third to a half of our crop has gone to China the past few years. We await to see if that kills their market. If it does, I doubt the American consumer can/will take up the slack. If a glut develops and prices fall below production cost then it'll be a "lost" year.
That said....I support what the President is doing. Something had to be done about the trade imbalance and unfair practices.
Corn is $3.32 Chicago today, But you have to get it there for how much$$$$
So should we continue to let the other countries keep F’ing us on trade?
You are correct. current prices for corn and soybeans are at or below cost of Production
Trump is educating America on exactly why there is a 700 billion dollar trade deficit. That deficit means dollars leaving this country creating a backdrop for a huge US budget deficit.
By leveling the Tariff playing field....US farmers and industry will finally be able to sell globally at a fare price.
So should we continue to let the other countries keep F’ing us on trade?
You are correct. current prices for corn and soybeans are at or below cost of Production
Trump is educating America on exactly why there is a 700 billion dollar trade deficit. That deficit means dollars leaving this country creating a backdrop for a huge US budget deficit.
By leveling the Tariff playing field....US farmers and industry will finally be able to sell globally at a fair price.
So Trump is the ultimate free trader! He wants to eliminate all trade barriers. How does that sit with all of you anti-trade Freepers? Would you accept a tariff free trading regime? What will happen to the US truck business if all tariffs are dropped?
Whether or not you receive a direct subsidy as farmer, you indirectly benefit from food stamps.
Yeah, being an exec for two companies with hundreds of locations across the country (one in 44 states, one in 28 states) that employees over 10k+ hourly workers means I have no clue. Got it.
Since NAFTA implementation, US exports of pork to Canada have continually increased, while Canada has switched to breeding and exporting feeder pigs to the US.
How should country of origin labeling treat a hog bred in Canada and raised to 50 pounds there, and then finished in the US to 250 pound slaughter weight?
You're talking "Retail" type labor rb22982. Night and day different from hiring farm labor.
In the extreme, What you're saying then is that Americans will have to again get used to eating potatoes all winter long, and blueberries only in August. That won't happen, and also American diets have changed. Yes, seasonal availability started the trend, but for decades now US distributors and manufacturers are used to buying vegetables simply where they are cheapest. Remember storage and global transport are much better than they were 50 years ago also.
There will be no easy way for US farmers to meet US demand for things like garlic, peaches, spinach, lettuce etc. etc..
I'm not disagreeing with Trump's trade policies and most of these products are coming from more agreeable suppliers than China, such as Argentina, Peru, Chile, even Mexico. Its just a comment on my experience in Agricultural economics.
"Unskilled labor, which it is for both farming/retail/hospitality, under $15/hr can and will go work anywhere to make an extra $0.25, $0.50, $1.00+ hr they can, or switch from seasonal/PT to full time jobs
You still miss the point of these tariffs. They are to eliminate Chinese, etc tariffs that exist on US goods today, eliminate our ability to bring certain products even into those countries at all, and eliminate forced IP theft. The only tool Trump has to go after those, short of a shooting war, is to respond with tariffs ourselves - which should have been done 20, 30 years ago.
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