January 17, 2016

The Farming Bubble Bursting

Timothy Birdnow

There has been a farming bubble in this country for years now, driven by artificially high prices thanks to the ethanol mandate for fuel and too easy credit terms driven by the government. Now it appears it may be bursting.

From the St. Louis Post-Dispatch:

"CHICAGO • With agricultural lenders fearing a tidal wave of farm bankruptcies as soon as this spring, lawyers in the Midwest say they want U.S. Sen. Chuck Grassley of Iowa to raise the debt limit for so-called "family farmer" bankruptcies.

Farmers in states like Illinois, Indiana and Iowa are scrambling to secure lending for the 2016 growing season at a time when prices for their corn have halved from three years ago.

Many younger farmers, who tend to be more cash poor than their elders, are expected to be among the hardest hit by stubbornly high input costs such as fertilizer and seeds and souring export sales"

[...]

"The U.S. Department of Agriculture has estimated that net farm income plummeted in 2015 to $55.9 billion, down nearly 55 percent from an all-time high in 2013. The final data is set for release next month.

The USDA has also forecast that the data will show farmers' debt-to-asset ratio grew to 12.8 in 2015 from 11.3 in 2013.

Last spring, some farmers took the extreme step of breaching their lease contracts, reducing how much land they will sow this spring and risking years-long legal battles with landlords.

Since then, leading players in the agricultural sector have seen their businesses hurt by lower farm income and grain prices. These include tractor maker Deere & Co., seeds and chemical leader Monsanto Co. and top grain buyer Archer Daniels Midland Co."

End excerpts.

Is this any surprise? The Obama Administration has waged a war on the family farmer, with Byzantine regulatory regimes imposed on farmers (such as forcing dairy farmers to treat spilled milk as a toxic waste spill) and mismanaging water sources to a point where we have artificial floods and droughts. The floood on the upper Mississippi was one such example. We've also seen EPA land grabs such as the "wetlands" business, and the squeeze being put on farmers by the Bureau of Land Management (remember Cliven Bundy?)

Now those chickens are coming home to roost. This was a purposeful plan by Obama, who is seeking to create an Hydraulic Empire. And the plan is to get the farmers further indebted to the government.

Control food and you control the People.

Posted by: Timothy Birdnow at 04:18 PM | No Comments | Add Comment
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