The Farming Industry: Is It In Trouble?

Reblogger Eileen Burns
Commercial Real Estate Agent with Trans State Commercial RE Ft. Lauderdale/Miami/Palm Beach 0516472

The fate of the American Farmer needs our help in getting the word out about saving our fa mily farms and insuring we have a clean food source to feed our nation.  Farming is not an easy job.  There are too many layers of folks with their hands in the pot of proceeds for the farmer to continue in many instances.

 

Having genetically modified food is not the answer either.  Surely, big companies take over generational farming land but it comes at a greater risk to the American public.

 

My friend and business colleague Mike McCann - Nebraska Farm Land Broker has written this informative post to open our eyes and take action.  Pass it on!

The Farming Industry is in trouble.  I keep hearing that and if it is true...That means America is in trouble.

I hate being a Chicken Little and saying the sky is falling...and I really, really, really hope I am wrong...but there are many cracks in the fabric of many farms...and we do not want to lose them.

I do not think many people outside of farming are really aware that we need higher crop prices to stay afloat.Mike McCann Sold the Farm 2018

Crop prices are still way too low for the farmer to make a decent living. Cattle prices have had the bottom fall out of their industry as well.

If you think Farmers going broke does not affect you because you live in a metro community or do not work in the farming industry...you need to rethink your thoughts...because if the farming industry fails...we all fail.

Farmers are perhaps the best number crunchers in the world, most of them are easily the hardest working, and all are a resilient bunch of people. However...

Farmers are at a critical crossroads in 2018 where many farmers will not weather another bad year for crop prices. So what does that mean?

The Banks are getting very, very nervous as the Federal Reserve Board  continues to raise the Prime Interest rates and the crop prices are flat at best.  

The loss Banks may have when a Farmer is forced to sell out is way higher than any extra interest they may earn with higher rates, in my opinion.

 

Banks will be forced to make clients liquidate equipment and/or farm land to meet financial obligations. They can only help a client hang on for so long. But they might not get dollar for dollar return on any liquidation.

Mike McCann Mach1 Realty Sold the Farm 2018

 The ripple effect will mean more land on the   market in the fall than is normal...less   qualified  buyers...so the rich get richer and the   poor become tenants or hired hands or go to   work somewhere else.

 Generational farms could be lost through no   fault of the farmer or operator but simply   because global and national prices, interest   rates, weather, conflicts, and politics are   adversely affecting the prices all at the same   time.

We DO NOT want to see that happen. And here is why.

When farmers do not make money...they do not buy new equipment...or new vehicles...or new pivots...or take trips...or donate near as much to charity or local causes. They have to tighten the purse strings and that ripples down to many other industries.  

For Nebraska...it also can greatly impact taxes.  Fewer land buyers will mean lower land sale prices...which will mean lower land values and lower tax revenues.  This area of taxes needs to be lower...but not because of a depression. That is a discussion for another time however.Mike McCann will auction it for you! 2018

So what is the solution? We need corn prices at least in the low to mid $4.00 range...if it was at $4.50, the farmer could pay the higher interest on any loans and put a few dollars in the pocket.  If it is below $4.00, the only way the Farmer can make any profit is if the yields are sky high.

And with fickle Mother Nature...that is always a risk.

So...How Do We Get There?

Many things can impact the pricing quickly...but that usually means a problem somewhere such as drought, too much rain, crops being planted too late...or needing to be replanted to a shorter season crop...hail and wind, trade wars, and war, etcIt could also mean an early freeze cutting yields short in the southern hemisphere, but all of these are only short term solutions at best.

We need to communicate with our local, state, and federal governments and really articulate what is going on in the real world...and what we need to do for the farm to survive...which is every farm on every mile in the Midwest. Not some fancy operation somewhere that is all glitter and gold that you see on the news...but a real farm that is a working farm and those are everywhere but on the news.

Long term, we need to continue to develop...although at a faster rate...more uses for the renewable crops. I feel this has stagnated or slowed immensely. 

IE: Find more ways to use the product that benefits society and/or find a wider range of products for the farmers to produce. Hemp is a great example.

One thing that is absolutely needed:

WE NEED TO CUT OUT THE MIDDLE MAN! Right now there simply are too many fingers in the 'till. If you are a middle man...you know I am right.

There are multiple layers of Institutional Buyers who are buying and selling commodities, in this case, crops, and turning around and selling them...or holding them... for a higher amount and thus a profit...for doing basically nothing but buying and reselling.  They have way too much control on the markets and any future trends.

Imagine it this way:  You are having a garage sale...but the only people you can sell to are the guys that own thrift stores and they determine what they will pay you.

You have no say so in the price and cannot sell it to the small neighbor because the small neighbor has to buy it from the thrift store.   

Except....if you have a big, rich neighbor who needs your items...(like an ethanol plant for corn growers)...then you can sell to that big, rich neighbor for a higher price than if you were selling to the thrift store. Mike McCann The sun sets on another combine!

But even that big, rich neighbor sets the price.

Why? Because your friend is also having a garage sale and selling the same stuff as you and thus is your competition and is willing to take the price the big, rich neighbor is offering...thus forcing you to take that price as well. Or keep it and make no money.

So you rent a storage unit and then pay to store your items and try to sell them at the next garage sale for the same amount...thus losing money. 

The farmer stores the corn at the elevator and pays a monthly storage charge to do that...and most of the time loses money doing that while the elevators reap any profits.

The elevators also have multiple ways of dinging the crop prices...ask your favorite friendly farmer to explain this to you if you do not know what I mean.

We need to get rid of some of the layers...in this current electronic age...they are simply profit takers and unnecessary in my opinion.

I am an eternal optimist...and I know that the industry as a whole will survive long after I am gone...but I do not want to see any clients, friends, or farm families lose their livelihood through no fault of their own.  I also hope that they are being careful with their farming operation and looking at all angles for bringing in revenue into their operation.

Until next time...keep planting the seed of life!!

Mike McCann Denny Pouk Planting Corn!

 

Mike McCann Nebraska Land Broker This has been Mike McCann...Nebraska Land Broker...Coming to you from the Farm Land of Nebraska and America!! Visit me at www.mikemccann.com to learn more about the agricultural and farm land for sale market. 

Many farms For Sale in Nebraska are not listed publicly...please call, text, or e-mail with your questions, wants, and needs!

Mike is your Ag, Farm, and Auction expert throughout Nebraska!

308-627-3700 and 800-241-3940 call or text me at these numbers

mike@mikemccann.com for easy e-mail access!!

 Mike McCann  Nebraska Farm Broker and Land Auctioneer

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Rainmaker
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Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Mike's post was a good one to select for reblog, Eileen.  As an aside, I once had a friend who shares your first and last name.  She looks remarkably like you!

May 02, 2018 09:39 AM #1
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Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Eileen- btw, almost didn't recognize you!! Love your new profile photo. Larry and his sister still own their family farm in Iowa so we do pay close attention to what's going on. Good reblog.

May 02, 2018 10:17 AM #2
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Anna Banana Kruchten Broker/Owner, CRB, CRS
Phoenix Property Shoppe - Phoenix, AZ
602-380-4886

Eileen yes I read Mike McCann - Nebraska Farm Land Broker post and it is an eye opener for sure.  Love your new look!!

May 02, 2018 11:34 AM #3
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560,264
Eileen Burns
Trans State Commercial RE Ft. Lauderdale/Miami/Palm Beach - Fort Lauderdale, FL
FL Probate Agent, Hotel & Land Specialist

Myrl Jeffcoat So a double has been spotted!  Usually I hear movie star Katwhose  Hepburn or Diane Keaton -- younger versions... of course

 

May 02, 2018 12:05 PM #4
Rainmaker
560,264
Eileen Burns
Trans State Commercial RE Ft. Lauderdale/Miami/Palm Beach - Fort Lauderdale, FL
FL Probate Agent, Hotel & Land Specialist

Thanks Kathy Streib for the compliment.  I know about your Iowa fram ownership.  If more people got involved we could save our family farms

May 02, 2018 12:06 PM #5
Rainmaker
560,264
Eileen Burns
Trans State Commercial RE Ft. Lauderdale/Miami/Palm Beach - Fort Lauderdale, FL
FL Probate Agent, Hotel & Land Specialist

Thanks Anna Banana Kruchten CRB, CRS, Broker for the compliment.  Hard to believe it took me 8 years to update photo! Mike surely knows his business and can keep us all in the loop.  Glad to spread the word  We have lost the orange and grapefruit groves here in Florida and the crops come in smaller each year

May 02, 2018 12:08 PM #6
Rainmaker
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Lauren Williams, CPO
Casual Uncluttering LLC - Woodinville, WA
Professional Organizer: Puget Sound homes

@Eileen Burns THANK YOU for a thought-provoking repost. I agree to all points, and I'm a NYC native.

May 02, 2018 01:18 PM #7
Rainmaker
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Eileen Burns
Trans State Commercial RE Ft. Lauderdale/Miami/Palm Beach - Fort Lauderdale, FL
FL Probate Agent, Hotel & Land Specialist

Lauren Williams, CPO the world needs more people like you who understand how to simply life.  Too many folks are attached to stuff they don't want to part with..ever!  Then we look at this serious topic of farming and some of us can see the unfolding of chaos on the horizon. 

May 04, 2018 06:50 AM #8
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Rainmaker
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Eileen Burns

FL Probate Agent, Hotel & Land Specialist
HowTo Acquire Real Estate Property With Your IRA accounts!
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