Farmers Place their Bets

The AJC 7/30/18, page B1 article “Impact of Farmer Subsidies Unclear” reports questions Georgia Farmers are having about the $12 billion in subsidies for Farmers impacted by Chinese tariffs. Soybeans closed today at $8.70/bu. Soybeans had been at $10/bu. and Farmers are asking how this subsidy that was just announced will work. The US Department of Agriculture said that they will provide “incremental cash payments” to farmers with cotton and soybean crops. China has imported US cotton, but not soybeans.

For other crops the government says it will buy the surplus and these farmers are also asking for price protection.

There were no questions from livestock “ranchers” who would benefit from cheaper feed prices due to cheaper soybean prices. This is a Pinata and Farmers want price protection and livestock ranchers would like lower feed costs and the taxpayer pays $12 billion to keep them happy and thank them for living on the edge.

Farming and ranching are lobbying like mad to get their scenerio included in the big Pinata that is about to take place in the big food casino. US Agriculture has subsidies built in and they spend money to improve yields.

When the supply of a commodity exceeds the demand, prices go down. Producers track their commodities to try to mitigate this problem, but there are also other variables like drought, blight, disease, inheritance taxes, product recalls and machinery break-downs. It takes a gambler to do this.  You walk into this poker game with your net worth stuffed into your pockets, sit down and say: “deal”.

Norb Leahy, Dunwoody GA Tea Party Leader