Re: Grain prices

Larry Caldwell wrote:
There's a panic going on. Everybody is moving into cash, and that
includes futures. We're still going to have trouble meeting commodity
demand next year. Tell your friends to put it in the bin and sit on it.
The price will be back.

I sure hope so 'cause we got killed this year. Last year, off 300 acres
of wheat we harvested about 16,000 bushels. We got enough rain at the
right time that we didn't irrigate at all.

This year, 300 acres of wheat produced 6,400 bushels. If wheat gets back
up to $8/bu, that's a whopping $51,200 income I can expect! Oh, but then
there are expenses, which were, roughly:

8,500 seed and planting
20,000 fertilizer
8,500 weed spraying
12,000 electric bill for irrigation
3,500 water usage payment
5,200 harvesting
-------
$57,700

It's going to be tough to make expenses, let alone cover equipment
payments, mortgage, and property taxes. Luckily I signed up for those
lucrative government subsidies! That's going to help a whole lot. Can
you believe it, the U.S. Government is going to give me a whole $3,432!
That's great, I'm feeling rich already!

No, I don't really believe in subsidies, and don't normally sign up for
them. I signed up this year because it's available and we kinda need the
money.

I'm not sure about corn, but for wheat, it's basically an old leftover
from back when the U.S. always had a surplus of wheat and was an
incentive to get farmers to grow other, possibly more risky crops while
ensuring that the farmers wouldn't go broke if the other crops didn't
work out. They figure it on what they call "base acres", which is some
formula based on the number of acres that were planted back when the
program started 30-40 some years ago and pay you $0.52 per bushel based
on some average number of bushels you should theoretically get. In any
case, it's nowhere near a government sponsored get rich quick scheme for
farmers.

-cj
.

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