46 ms·

I live in Wisconsin. I feel confident saying that this is just an anomaly based on a strange summer weather pattern here in Wisconsin, not anything that indicat

I live in Wisconsin. I feel confident saying that this is just an anomaly based on a strange summer weather pattern here in Wisconsin, not anything that indicates some kind of issue with international trade policy or structural issue with farming. We have 68,500 farms in this state [1]. This summer was dry for a very long time, then it was very wet, and then it stayed very warm well into September. I suspect a lot of farmers had issues with moisture in their harvests. The thing about farming is you are taking a huge risk every year with what you invest, and farm equipment isn't cheap. If you make money, you make a decent amount of money. But if you can't make the payments on your machinery, you're basically done for. I think this article was written with the intention of insinuating that this is somehow related to the Trump Trade war, and to be fair, I am sure that made or broke the profit margin for some farmers. But in general, I don't think that's what's going on here, and I think it's cheap journalism for them to play into that. Somewhat related: Checkout "MN Millenial Farmer" on YouTube, it's some of the most relaxing content you'll find online. [2] [1]: https://datcp.wi.gov/Pages/Publications/WIAgStatistics.aspx https://datcp.wi.gov/Pages/Publications/WIAgStatistics.aspx [2]: https://www.youtube.com/channel/UCp0rRUsMDlJ1meYAQ6_37Dw https://www.youtube.com/channel/UCp0rRUsMDlJ1meYAQ6_37Dw

mitchell_h 8y ago
Same here in missouri. We had 2 dry summers in a row, then a wet harvest time this year. Hay prices are up over double last year and last year was up from the previous year. Last year for example I would have been happy to buy $25 a 5x5 round bale. This year if you can find them, they're $90-$100. Small squares 2 years ago were $1.25, this year I happily paid $4.
rmason 8y ago
I agree with you. Here in central Michigan they've begun construction of a huge cheese plant will purchase 20-25% of the state's milk. Add to that the drastic slashing of the Canadian dairy tariff and people are cautiously optimistic. https://www.freep.com/story/money/business/john-gallagher/2018/08/09/milk-processing-plant-lansing-michigan/933776002/ https://www.freep.com/story/money/business/john-gallagher/20...
peteradio 8y ago
Why would farmers extend themselves so much that one bad year breaks them? Why wouldn't they set aside some of that good money so in bad year they could still pay the bills?
- colechristensen 8y ago
  That is what the farmers that didn't go bankrupt do.
- notyourday 8y ago
  If they did that year after year they won't be a small struggling farm on a verge of bankruptcy but a promising farming conglomerate.
  - coldtea 8y ago
    If they did that they wouldn't be farmers loving their craft but business owners that happened to own a farm.
    - notyourday 8y ago
      If that's a hobby for them then they are just gardeners. If they are gardeners, then I sincerely hope that they get zero consideration from those who are supposed to help farmers.
      - coldtea 8y ago
        Gardeners tend to gardens, so even for pro vs hobby that's not the distinction you want to make. But even the intention behind the distinction is wrong, as not wanting to be a huge agricultural business doesn't mean you're not professional. In fact, quality-wise the smaller shops can be much more professional. So, no, actually, those are farmers, of the kind with the smaller lots, that have always been there and fed humanity for millennia. The other are just big business conglomerates who don't give a fuck about farming and just happened to be in the agriculture business -- and will do anything to drop their margins and sell crap. I hope that they get zero consideration from those who are supposed to help farmers, and hopefully are driven out of farming.
pmw2007 8y ago
I'm a global grain trader living in Geneva Switzerland, where somewhere around 50% of global raw food materials are traded. Trust me when I say this is real. There's been a massive over supply of agriculture products around the world for the past 3/4 years.
- algesten 8y ago
  any idea why?
  - pmw2007 8y ago
    Yes. In 2008 and 2011 there was shortage (weather issues) and price spikes. Farmers around the world -- from Ukraine to Brazil to the US -- made a huge amount of money and invested in technology (new farm equipment, better seeds, etc). In the meantime the weather globally has been perfect. Beyond specific local situations worldwide it has been perfect and the technology has only added to production. There will be a problem in the future but the reason American farm bankruptcies are high is that the prices are beyond low and the production levels are lagged (they're based on past conditions and take time to correct). Currently it's beyond bad for large scale producers. This is an actual issue. In the future the failure of producers now will lead to shortage ... and so begins a new cycle.
    - ska 8y ago
      Curious: I have had a couple of conversations with people (not arm chair quarterbacks - knowledgeable, but not expert) about pro & con of supply management systems as enacted in US and Canada (triggered by recent trade talks). This sort of cycle was brought up as a "pro supply management" - if we leave it strictly up to somewhat free and somewhat global markets we inevitably get these boom/bust cycles, but they can be avoided by management boards and the like. Do you think it's accurate?
      - btilly 8y ago
        It is not only accurate, but agriculture is pretty much the worst case. The problem is that demand for food is rather inelastic. You are going to eat when you are hungry, and if you're hungry enough you'll pay whatever you can for that next meal. But food production is highly variable. For example the 88-89 drought in the USA dropped food production by 29%. Therefore to have enough food in a bad year, we have to be willing to overproduce in a good year. Which means that we guarantee an excess supply, and therefore a very low free market price. How we get there is arbitrary. We can subsidize exports, we can buy up food to throw it away, we can pay farmers to not grow food in good years. All of these are done somewhere. There is no first world country that doesn't do at least one of these because everyone understands that it is a national security issue - if your people go hungry you're likely to get civil unrest. As a concrete demonstration, consider the Arab Spring. One of the contributing factors was that China had a severe drought. To ensure their political stability, they bought wheat on the international market. Thanks to the laws of supply and demand, the cost of wheat doubled. Poor people in Arab countries that couldn't subsidize their citizens suddenly went hungry. They revolted. See https://en.wikipedia.org/wiki/Impact_of_the_Arab_Spring#China https://en.wikipedia.org/wiki/Impact_of_the_Arab_Spring#Chin... to verify this sequence of events.
pmw2007 8y ago
Are you actually serious to provide local weather conditions to your analysis? Weather in Wisconsin was X, here in Missouri the hay price is Y. (Hay I might add is not a food input nor a cash crop.) Really? https://www.nytimes.com/2018/11/05/business/soybeans-farmers-trade-war.html https://www.nytimes.com/2018/11/05/business/soybeans-farmers... Would be one example but aside from any trade war there's a massive glut of food supply and before you call this media anecdotal I'd suggest you study the topic.
- nickysielicki 8y ago
  You might be right about a larger trend but that doesn't mean that this particular article supports that. https://www.nass.usda.gov/Statistics_by_State/Wisconsin/Publications/Crop_Progress_&_Condition/index.php https://www.nass.usda.gov/Statistics_by_State/Wisconsin/Publ...
  - pmw2007 8y ago
    This is Financial Times, so paywall. https://www.ft.com/content/0b02085d-d5b2-351d-81a2-1135025d0b51 https://www.ft.com/content/0b02085d-d5b2-351d-81a2-1135025d0... But google 'Bunge agriculture industry consolidation' (to be clear, I have no association with Bunge) The entire global food system is getting squeezed and restructured. It's not just US farmers. But this is a real issue. This news is not fake. That's all I mean to say.
- dang 8y ago
  > Are you actually serious > I'd suggest you study the topic Please omit personal swipes from your comments here. They only degrade discourse, and the site guidelines are all about not doing this: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html.
paulie_a 8y ago
The other thing I've noticed in Wisconsin, the kids don't want to take over the family farm. And quite frankly farmland is hard to sell unless it is for development. Sometimes a neighoring farmer would consolidate but it is low value land. The equipment is probably worth more in a lot of cases.
- cwbrandsma 8y ago
  I grew up on a farm, I'm one of 4 kids. My brother is now a farmer, and my brother-in-law took over my dad's operation. But really, only two could stay on, the rest of us had to find our own way, as the pie is only so big. Same for small farm towns, there is a normal attrition, where most of your best-and-brightest kids leave town and don't return. The rest stick around. Some become farmers, most other become supporting staff (mechanics, truckers, feed sales, etc) for the various farming operations. So the towns don't grow much, if at all.
rcchyssser 8y ago
Climate change is not an anomaly.

mitchell_h 8y ago

Same here in missouri. We had 2 dry summers in a row, then a wet harvest time this year. Hay prices are up over double last year and last year was up from the previous year. Last year for example I would have been happy to buy $25 a 5x5 round bale. This year if you can find them, they're $90-$100. Small squares 2 years ago were $1.25, this year I happily paid $4.

rmason 8y ago

I agree with you. Here in central Michigan they've begun construction of a huge cheese plant will purchase 20-25% of the state's milk. Add to that the drastic slashing of the Canadian dairy tariff and people are cautiously optimistic. https://www.freep.com/story/money/business/john-gallagher/2018/08/09/milk-processing-plant-lansing-michigan/933776002/ https://www.freep.com/story/money/business/john-gallagher/20...

peteradio 8y ago

Why would farmers extend themselves so much that one bad year breaks them? Why wouldn't they set aside some of that good money so in bad year they could still pay the bills?

colechristensen 8y ago
That is what the farmers that didn't go bankrupt do.
notyourday 8y ago
If they did that year after year they won't be a small struggling farm on a verge of bankruptcy but a promising farming conglomerate.
- coldtea 8y ago
  If they did that they wouldn't be farmers loving their craft but business owners that happened to own a farm.
  - notyourday 8y ago
    If that's a hobby for them then they are just gardeners. If they are gardeners, then I sincerely hope that they get zero consideration from those who are supposed to help farmers.
    - coldtea 8y ago
      Gardeners tend to gardens, so even for pro vs hobby that's not the distinction you want to make. But even the intention behind the distinction is wrong, as not wanting to be a huge agricultural business doesn't mean you're not professional. In fact, quality-wise the smaller shops can be much more professional. So, no, actually, those are farmers, of the kind with the smaller lots, that have always been there and fed humanity for millennia. The other are just big business conglomerates who don't give a fuck about farming and just happened to be in the agriculture business -- and will do anything to drop their margins and sell crap. I hope that they get zero consideration from those who are supposed to help farmers, and hopefully are driven out of farming.

pmw2007 8y ago

I'm a global grain trader living in Geneva Switzerland, where somewhere around 50% of global raw food materials are traded. Trust me when I say this is real. There's been a massive over supply of agriculture products around the world for the past 3/4 years.

algesten 8y ago
any idea why?
- pmw2007 8y ago
  Yes. In 2008 and 2011 there was shortage (weather issues) and price spikes. Farmers around the world -- from Ukraine to Brazil to the US -- made a huge amount of money and invested in technology (new farm equipment, better seeds, etc). In the meantime the weather globally has been perfect. Beyond specific local situations worldwide it has been perfect and the technology has only added to production. There will be a problem in the future but the reason American farm bankruptcies are high is that the prices are beyond low and the production levels are lagged (they're based on past conditions and take time to correct). Currently it's beyond bad for large scale producers. This is an actual issue. In the future the failure of producers now will lead to shortage ... and so begins a new cycle.
  - ska 8y ago
    Curious: I have had a couple of conversations with people (not arm chair quarterbacks - knowledgeable, but not expert) about pro & con of supply management systems as enacted in US and Canada (triggered by recent trade talks). This sort of cycle was brought up as a "pro supply management" - if we leave it strictly up to somewhat free and somewhat global markets we inevitably get these boom/bust cycles, but they can be avoided by management boards and the like. Do you think it's accurate?
    - btilly 8y ago
      It is not only accurate, but agriculture is pretty much the worst case. The problem is that demand for food is rather inelastic. You are going to eat when you are hungry, and if you're hungry enough you'll pay whatever you can for that next meal. But food production is highly variable. For example the 88-89 drought in the USA dropped food production by 29%. Therefore to have enough food in a bad year, we have to be willing to overproduce in a good year. Which means that we guarantee an excess supply, and therefore a very low free market price. How we get there is arbitrary. We can subsidize exports, we can buy up food to throw it away, we can pay farmers to not grow food in good years. All of these are done somewhere. There is no first world country that doesn't do at least one of these because everyone understands that it is a national security issue - if your people go hungry you're likely to get civil unrest. As a concrete demonstration, consider the Arab Spring. One of the contributing factors was that China had a severe drought. To ensure their political stability, they bought wheat on the international market. Thanks to the laws of supply and demand, the cost of wheat doubled. Poor people in Arab countries that couldn't subsidize their citizens suddenly went hungry. They revolted. See https://en.wikipedia.org/wiki/Impact_of_the_Arab_Spring#China https://en.wikipedia.org/wiki/Impact_of_the_Arab_Spring#Chin... to verify this sequence of events.

pmw2007 8y ago

Are you actually serious to provide local weather conditions to your analysis? Weather in Wisconsin was X, here in Missouri the hay price is Y. (Hay I might add is not a food input nor a cash crop.) Really? https://www.nytimes.com/2018/11/05/business/soybeans-farmers-trade-war.html https://www.nytimes.com/2018/11/05/business/soybeans-farmers... Would be one example but aside from any trade war there's a massive glut of food supply and before you call this media anecdotal I'd suggest you study the topic.

nickysielicki 8y ago
You might be right about a larger trend but that doesn't mean that this particular article supports that. https://www.nass.usda.gov/Statistics_by_State/Wisconsin/Publications/Crop_Progress_&_Condition/index.php https://www.nass.usda.gov/Statistics_by_State/Wisconsin/Publ...
- pmw2007 8y ago
  This is Financial Times, so paywall. https://www.ft.com/content/0b02085d-d5b2-351d-81a2-1135025d0b51 https://www.ft.com/content/0b02085d-d5b2-351d-81a2-1135025d0... But google 'Bunge agriculture industry consolidation' (to be clear, I have no association with Bunge) The entire global food system is getting squeezed and restructured. It's not just US farmers. But this is a real issue. This news is not fake. That's all I mean to say.
dang 8y ago
> Are you actually serious > I'd suggest you study the topic Please omit personal swipes from your comments here. They only degrade discourse, and the site guidelines are all about not doing this: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html.

paulie_a 8y ago

The other thing I've noticed in Wisconsin, the kids don't want to take over the family farm. And quite frankly farmland is hard to sell unless it is for development. Sometimes a neighoring farmer would consolidate but it is low value land. The equipment is probably worth more in a lot of cases.

cwbrandsma 8y ago
I grew up on a farm, I'm one of 4 kids. My brother is now a farmer, and my brother-in-law took over my dad's operation. But really, only two could stay on, the rest of us had to find our own way, as the pie is only so big. Same for small farm towns, there is a normal attrition, where most of your best-and-brightest kids leave town and don't return. The rest stick around. Some become farmers, most other become supporting staff (mechanics, truckers, feed sales, etc) for the various farming operations. So the towns don't grow much, if at all.

rcchyssser 8y ago

Climate change is not an anomaly.