On Mon, 9 Apr 2007 14:47:26 -0700 (PDT), AG Schnozz wrote:
>BBBean wrote in regards to a perceived 2% decline in grain harvests:
>> I believe you've been sold a bill of goods!
>I promised not to spout off any more, honest I did. BBBean, if
>anybody should know, it's you. Please tell us how that 2% decline
>has been affecting your business?
Grain production varies with market forces (handy graph -
http://carto.eu.org/article2474.html). The suggestion that grain production is
falling due to a reduction in production capacity doesn't jive
with anything I've ever heard from anyone in the trade or the USDA. The biggest
factor in recent years has been that China has been burning off their grain
stocks, reducing the need for new
production. However, we still have a huge untapped production capacity that can
be turned on or off depending on demand.
Locally, we've been ramping grain production up because corn, beans, and rice
pay better that cotton under the current market.
>I know that around here in New France, we're swimming in corn and
>beans. There are record sized covered piles that have yet to be
>touched. The agribusinessmen around here are happy to see the
>increased demand from biodeisel and ethanol because corn/bean prices
>have been stuck at record low prices forever. You can't afford to
>farm at $1.80 a bushel.
That's the bottom line. Farmers are businessmen. We grow what makes money.
>People use the nationwide average per-acre (or sometimes if they are
>more honest, the stateside numbers) to determine whether or not the
>world will starve because of ethanol.
There's a lot of intellectual dishonesty out there, too. A lot of
anti-corn/anti-US Farm Program/anti-corporate activists like to use USDA
program yield numbers to boost their arguments, but those
figures were frozen in 1985 for political reasons (Commodity subsidies and
insurance payouts are based on yield). If you look at actual production vs
plantings, you'll see that production is much
higher. As an example, most of my farms have a program yield of 500-650
lbs/acre (cotton). The truth of the matter is that my farms haven't produced
less than 700 lbs/acre in over a decade, and
typically produce 750-900 lbs/acre.
>Frankly, our farmers can and do match whatever demand is out there.
>If the prices of corn and beans went up high enough, we can easily
>raise that 140 per acre average to 200 without breaking a sweat.
I'll take issue with that. I don't know anyone who wouldn't take an extra 60
bu/acre if it was economically feasible. Extra grain is more likely to come
from acreage shifts from other crops, or new land
put into production.
>Nobody will starve unless prices remain artificially low. At $1.80
>per acre you can't even afford the diesel. It's far more profitable
>to turn that top-grade acreage into a subdivision.
On that, we agree.
--
Barry B. Bean
Bean & Bean Cotton Company
Peach Orchard, MO
www.beancotton.com
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