Farmers have always planted and prayed. In the past they prayed for good weather and minimal pests/plant diseases. Now they pray for other farms to fail.
Corn farmers are throwing another government-backed Hail Mary this year, planting more of the crop than in 2019 even though prices are near the bottom of a six-year slump.
“They call it plant and pray,” said Al Kluis, a commodities broker in Wayzata. “What you want is a disaster in some other part of the Corn Belt or some other country.”..
The U.S. Department of Agriculture now projects a record corn harvest in 2020... Demand can’t keep up with supply. Corn futures hovered around $3.15 per bushel last week, nearly a dollar less than a year ago...
Farmers came into the spring with a large inventory of corn in storage, and demand for the commodity has been hit on multiple fronts since the onset of coronavirus.
Ethanol plants have shuttered due to decisions by the Trump administration to exempt oil companies from ethanol standards and, more recently, the cratered demand for all types of fuel caused by the coronavirus pandemic. Ethanol production is running about 70% of capacity, Kluis said.
Meanwhile, the shutdown of restaurants and idling of meatpacking plants that have led to farmers euthanizing chickens and hogs means the need for corn to feed livestock will probably drop about 20%...
He acknowledged that the best thing for Minnesota corn farmers would be a weather catastrophe in some other part of the Corn Belt or Brazil or Argentina.
“That’s a disheartening part about production agriculture right now, is you only really have success if some other farmer has a bad year,” he said...
Also, crop insurance, which is 60% taxpayer subsidized, sets guaranteed revenue for corn at $3.88 per bushel this year. “Without crop insurance, there’s not a bank around that would loan any money to a farmer,” Thalmann said.
I've worked with the farming community in the past. Hard, hard work. Lots of technology and lots of sweat. The market was already difficult in 2015 but there were a few bright spots on the horizon. I don't know how they voted in 2016. I do know that the Farm Bureau lined up quickly with the president who then: killed TPP, messed around with NAFTA (which, I am unsure had any net positive for farmers), messed with Canada, placed tariffs on China (which has had a negative affect), bailed out farmers after he killed the marketplace for more than $25 billion (more is coming before the election), messed with needed immigrant farm labor and is still trying to kill the Paris Accord (farmers get climate instability). So, how anyone can come out of this tunnel and believe he is pro-farmer is beyond me. We are in a cognitive dissonance loop that seems to keep holding together. I don't get it.
ReplyDelete