A question for you more seasoned (older) experts

[Engler]

The post on age down the board here got me thinking about using the age and experience of some of our more senior participants on this board. My question is "are we headed for the 1980s again here in farming?"

I don't know either way, nor have I formed a complete opinion on the matter, but here are the red flags that I see that are similar to the 70s that we have again now.

1)high energy price
2)high land prices to rent or to own
3)suddenly high comodity prices
4)a euphoria that this is the 'golden age of agriculture'

I realise that so far interest rates are staying in check, so that's a plus. Additionally the high grain prices can be linked to domestic usage not export markets so that should be less volitale.

I was born at the end of the boom and am to young to remember the bust so everything that I know is from a book or war stories the older generation tell. I'm hoping that some of the experts can toss this pup a bone and share their knowledge.

 

[novatech]

I cannot predict the future. I can tell you I was way to busy trying to figure out how to feed the kids to really care why it happened.
I apply the laws of physics to life. If you throw it up, it will fall down. Or it may just be a cycle, just like the weather.
I lived thru that, I will live thru the next.

I also feel most it may be God,s way of makeing us appreciate what we have and what is really important.

 

[Brute 23]

What goes up must come down... as said already... but it will never go back down to where it was.

 

[DOC HARRIS]

Business, Commodities, Supply and Demand, - all fluctuate, decrease and increase depending on Population demands. The Federal Reserve Bank has done a good job holding down inflation for a great number of years, but there will always be hick-ups and burps in the economy. The important thing in stabilizing one's own financial base is - MODERATION in managing personal finances and investments. Large, crazy swings in the management of either of those portfolio items is not advisable in today's tricky markets. This is why most Financial Managers of large companies are wooing foreign markets.

I think that our Agricultural Entrepreneur's and Marketing Experts have worked hard to open up the Beef Markets of the World. Another reason to breed and raise the BEST BEEF possible and use all the information available to accomplish this deed!

DOC HARRIS

 

[mnmtranching]

I think the biggest thing to happen to US agriculture ever is the Ethanol from corn thing that's going on. And in the short term it's going to get worse. Think about it. The US has traditionally been a major world player in ag exports. Ethanol is changing that. Corn is such a huge crop that all other crops are effected. The higher the price for corn, the more acres planted and less acres for other crops. You may think that other commodities like beef will follow and the price will go up accordingly. I don't think so, we have free trade, that is, free for country's to export to us. We don't produce enough beef for our own use now, so why isn't the price better? Simple, we are the worlds largest importer of beef. And country's like Brazil with the worlds largest # of cattle is just waiting for the green light to send us fresh and frozen beef, and I don't think they will have to wait long. Sorry I'm not real optimistic about the price we get for our beef compared to the cost of producing it.

 

[Wewild]

I got a long list, but here are some key ones.

When in Rome don't do as the Romans.
Spend money on needs not wants.
Invest all the money you can when someone wants to match.
Invest all the money you can when someone wants to match some.
Make sure you have at least a 3 months reserve of your pay outside the retirement account.
Build the 3 month reserve to 6 months.
Shoot for retirement at 55.

At that time enjoy the life you got left however you desire.

 

[ArrowHBrand]

Actually the commodities market is extremely volatile due to the increase in domestic usage. I think ethanol is a great product and will help the U.S. wean itself from being dependent on foreign oil, however, corn should not be used to make ethanol because of it's effect on other products. Why are the Brazilians the leading producer of ethanol? They make their ethanol out of sugarcane and sugarbeets. What goes up must come down. I know of a lot of farmers that are holding their grain because they feel that they will be able to get $4/bu soon. That may be the case, but they also could be getting $1.75 again real soon. Cash out some grain while you can get a great price and hope that it will go up some more. I don't want to get political but I will say that until we get the two oil tycoons out of the Whitehouse, we should just expect to pay out of the wazoo for everything associated with petroleum and transportation.

 

[Caustic Burno]

The post on age down the board here got me thinking about using the age and experience of some of our more senior participants on this board. My question is "are we headed for the 1980s again here in farming?"

I don't know either way, nor have I formed a complete opinion on the matter, but here are the red flags that I see that are similar to the 70s that we have again now.

1)high energy price
2)high land prices to rent or to own
3)suddenly high comodity prices
4)a euphoria that this is the 'golden age of agriculture'

I realise that so far interest rates are staying in check, so that's a plus. Additionally the high grain prices can be linked to domestic usage not export markets so that should be less volitale.

I was born at the end of the boom and am to young to remember the bust so everything that I know is from a book or war stories the older generation tell. I'm hoping that some of the experts can toss this pup a bone and share their knowledge.

I too see a lot of simularaties to the mid to late 70's with the exception of high intrest. I knew a whole lot of people that went bust then and never recovered. Most of the ones I knew that went under were operating on borrowed money. When the bottom fell they couldn't cover the notes. I read somewhere the average American was carrying 10,000 in credit card debt alone, some poor smuck is carrying 20,000 cause this old boy has none.