
U.S. Farmers Stung by Tariffs Now Face a $3.5B Corn Loss - paulpauper
https://www.bloomberg.com/news/articles/2019-08-13/u-s-farmers-stung-by-tariffs-now-face-a-3-5-billion-corn-loss
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acconrad
I work in agtech and I'm not surprised by this at all.

The major corn and soy producers have faced downward pressure for the last 4
years. It now costs more to plant the crop than to pick and sell it.

And yet, the government pushes and incentivizes farmers to just grow more.

Read _This Blessed Earth_ or _Omnivore 's Dilemma_ if you want a primer on how
messed up this system has become.

What farmers need are a way to restore profits in a sustainable fashion.
Simply growing more corn/soybeans/rice/wheat isn't going to cut it anymore.

~~~
tryptophan
>What farmers need are a way to restore profits in a sustainable fashion.
Simply growing more corn/soybeans/rice/wheat isn't going to cut it anymore.

The way this is done in other industries, except for farming, is that half of
the producers go bankrupt, production is reduced, and the survivors are able
to be self-sustaining and profitable. We really do not need this much
soy/corn. The market is screaming "stop making it" and perhaps it is time we
listen.

~~~
acconrad
This doesn't work in farming because it isn't a free market. Most farms are
owned by Cargill or Monsanto. And they are all propped up by the federal
government.

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mistrial9
"Cargill is America’s largest privately-owned company, surpassing the second
place Koch Brothers by billions of dollars in annual revenues. Cargill is the
corporate behemoth at the nexus of the global industrial agriculture system, a
system that it has designed to convert large swaths of the planet into
chemically dependent industrial scale monocultures to produce cheap meat, palm
oil, and chocolate."

[http://www.mightyearth.org/cargillreport](http://www.mightyearth.org/cargillreport)

~~~
paganel
Cargill has also slowly but steadily increased its presence around my parts of
the world (Romania), taking advantage of one of the most nutrient soils on
this planet, chernozem [1].

If you look at this map [2] is the stuff colored in green. Most of it can be
found in the US Great Plains, and the second such zone comprises South-Eastern
Romania + most of Ukraine + the plains North of the Caucasus (which are part
of Russia). Making money out of Romania is easy, we are already a NATO and UE
member, but the great stake for companies like Cargill is to be able to invest
and take money out of Ukraine's plains, I think there are hundreds of billions
to be made out there, not to speak of the strategic advantage of having
Tsarist Russia's former bread-basket under your economic control.

[1]
[https://en.wikipedia.org/wiki/Chernozem](https://en.wikipedia.org/wiki/Chernozem)

[2] [http://i.imgur.com/TmKdaFz.jpg](http://i.imgur.com/TmKdaFz.jpg)

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vfc1
Most of the corn and soy produced is not for direct human consumption, but for
cattle feed -
[https://www.usda.gov/sites/default/files/documents/coexisten...](https://www.usda.gov/sites/default/files/documents/coexistence-
soybeans-factsheet.pdf)

> "Just over 70 percent of the soybeans grown in the United States are used
> for animal feed..."

These crops are heavily subsidized by the government, which allows the
production of meat at a seemingly low price due to low feed costs, but in the
end the taxpayer is paying for the actual meat price indirectly through taxes.

Why not reduce the production of soy and corn to reasonable levels, and let
the consumers pay for the actual cost of meat?

If the government wants to subsidize crops, do so for fruits and vegetables
instead.

~~~
kpU8efre7r
Exactly this. Meat is drastically cheaper than it would be from natural market
forces and actual healthy shit is expensive.

I'm not vegan or vegetarian by the way but this aggravates me to no end and
contributes to a lot of our problems.

~~~
Pyxl101
Is there an actual argument somewhere for why these subsidies are desirable
for the nation? Let's say, written by people who agree with them. What is the
_stated_ purpose? This should be written from the perspective that most
industries should not warrant any subsidies. I don't understand why taxpayers
should subsidize farms, and I'd like to read the rationale.

~~~
dmoy
Some degree of farm subsidies are good/necessary just for the sake of food
safety and national defense.

But, the amount and type of subsidies in the US is way off the charts for just
those purposes.

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rohan_shah
I want to buy corn from the USA and import to India, but there is no way to
find and connect with corn farmers online. I've found the corn to be cheaper
even after paying the custom duty in India.

Please suggest if you know any possible ways.

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volak
Real headline: Corn price futures fell heavily on unexpected planting area and
yield pegging

Edit: Actually the new report causing the 20% drop in price is controversial.
And given all the news has reported weather issues disrupting planting
season... I'd say buy corn futures... Any futures investors care to weigh in?

~~~
cardmagic
Grains are likely to head lower until around November/December.

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Causality1
American agriculture in general and corn growing in particular has been
propped up and distorted by pointless subsidies for decades. Now the time has
come to pay the piper for artificially manipulating the market.

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israelo2035
Here in Brazil the value of corn has risen, with the expectation of US vs.
China trade war. Already soybean remained stable.

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iscrewyou
[https://outline.com/bkHzuw](https://outline.com/bkHzuw)

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dghughes
I can't imagine being a farmer. You get almost nothing for what you grow maybe
a $100 dollars per ton. But you need to buy a $250,000 (or more) tractor to
plant, spray and harvest it - if not multiple tractors (till, plow, spray,
harvest).

~~~
rohan_shah
But you can grow 10 tonnes per acre and so on a 100 acre plot, you grow 1000
tonnes and make 100,000$ in 4 months if you grow corn. And if the profit
margin is 100$ per ton.

I'd take it any day.

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peter303
Farmers are the largest federal welfare recipient when you count subsidies
after the tariff debacle. Quite an irony that stereotypes welfare queens as as
an undesirable minority.

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exabrial
I'm not sad by this. I'm tired of the ethanol industry and still amazed the
ethanol requirement in gasoline exists.

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justinator
"So much winning" I guess.

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zelon88
I work in manufacturing and we're impacted as well. The largest impact is
reduction in Chinese end-user business.

The products we make are used in Chinese factories to assemble smartphones.
Believe it or not (I do) but the Chinese do not possess the technology nor the
manufacturing sophistication to make _high quality_ items (read: iPhones) on a
large scale __efficiently __with a domestic (to China) supply chain.

Sure, the factories that produce iPhones are capable of producing a conforming
iPhone. But the machines it takes to produce a conforming iPhone require
technology, skill, and technique the Chinese __currently __do not possess.

So, believe it or not (I can prove it) the Chinese buy their factory equipment
from small suppliers in the U.S. where the quality is decent enough to get
equipment capable of producing an iPhone. We make the machines they use to
laminate screens.

We are currently incentivizing China to develop the technology to domestically
create the iPhone. That isn't a problem because it puts me out of business.
That is a problem for the western economy because it reduces Chinese reliance
on the Apple supply chain. We're teaching them, through trial and error, how
to replace Apple with Huawei in the Chinese market. If Apple loses the Chinese
market; the world market is lost inside of 10 years. We're teaching Huawei how
to make an iPhone by brute force by making it economical to do so.

Nevermind the price of materials like aluminum has gone crazy. Even the DFARS
stuff has gone up as a result of reduced supply in domestic markets. And for
some customers we can't use anything else. So either make up the supply
difference or get fucked on DFARS requirements. You're the ones costing
America it's world dominance. Not us.

So do whatever you want, conservatives. My personal opinion is that your trade
war is shooting yourselves in the foot.

~~~
robk
But surely China is doing this regardless of whether America makes it
difficult or not. They're dedicated to reducing reliance on any foreign stuff.

~~~
zelon88
But the disparity in quality is truly a problem they struggle with. Their
stated goal isn't their core competency. Volume is their competency, not
quality.

For example, they can't even use a lot of their own materials in aerospace
because they have no tracability. That's why nobody builds airplanes in China.
If Airbus or Boeing could get a reliable part out of China instead of the US
they would love to ship they can save money, but that's not possible and no
country would let that plane in their airspace. Probably not even China.

China knows this and buys their quality products from elsewhere. It's not cost
effective enough yet for them to change that strategy.

We are changing that for them.

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bluthru
Shipping heavy grain around the world is terrible for the environment.

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quxbar
Well, another $12 billion subsidy is coming their way, I'm sure. But nobody
would dare call farmers welfare queens...

( [https://www.nytimes.com/2018/11/19/us/politics/farming-
trump...](https://www.nytimes.com/2018/11/19/us/politics/farming-trump-trade-
war.html) )

~~~
acollins1331
It's not their fault every government in the world subsidizes food and makes
prices artificially low so it's impossible to farm for a profit. What's your
alternative? No farmers because its not profitable? Only enough food being
grown where people can make profit from? This isn't a bad system we have now,
the subsidies are fairly small and food is really cheap because of it. Those
farmers also work quite hard and lives suck in general. Farm subsidies are an
example of the government actually doing it's job for once.

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AngryData
I agree, the one thing we could and probably should change is the diversity of
crops we subsidize. We want food stability, but we don't need to base that
stability on pure corn syrup.

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plankers
Not to mention crop monoculture is terrible for the quality of the soil,
forcing farmers to use (literally) tons of synthetic phosphorous, nitrogen,
and potassium just to get acceptable yields. It results in lower quality crops
than those that result from polyculture, as well.

A comment in the top thread mentioned The Omnivore's Dilemma by Michael Pollan
as a good introduction to this issue and I'll second that. A fun read, too. He
investigates hunting and amateur mycology as well.

~~~
numakerg
How do the costs of managing a multiculture field compare to a monoculture
one?

I'd imagine the planting, maintenance and harvesting procedures benefit
significantly from the crop being a single type.

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GordonS
I guess you're right, but only for so long - different crops add and remove
different nutrients from the soil, so if you keep planting the same thing you
will eventually deplete the soil of the nutrients to grow that crop.

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panny
It's interesting to see all the progressives in this thread get bent out of
shape over a government program that provides cheap food to the masses.

