I guess tariffs have no effect on prices. Thanks for the clarification.
I acknowledged they have effects not once but twice in my previous post. Beans were a little under $10 last October (in part because additional tariffs went into place with China in September, under Biden) which is pretty much where they’re at now. China is getting more of their beans from Brazil in part due to tariffs.
Was listening to an ag economist earlier on my drive and he talked about how we got out of the farm crisis in the 80s in large part by opening up new markets, China being a big one. But there aren’t any Chinas to go open up now and we are in a trade war with actual China. Anybody in the world that has the money to buy our products has a full belly. And the places we could open up to sell the products don’t have the money to pay for them. So we can argue all day about the effects of tariffs, but ultimately they’re just exacerbating a much larger issue. That problem being that we chronically overproduce because farmers are incentivized to do so by several mechanisms.
We basically are at an impasse now where we have to decide if we let farming become survival of the fittest and consolidate into mega farms or do we go back to some kind of a system where we take acres out of production to keep prices somewhat higher by matching production to demand?
I suspect there will be some kind of bail out or gesture of some sort made to the farming community before the end of this year. The I states aren’t in terrible shape yet but have been talking to some friends of mine that are in fringe areas and they’re thinking upwards of 30 to 40% of farmers could be on the brink of bankruptcy sooner than later.
Maybe Jobu is right and Trump is going to put them all out of business and buy their land for pennies on the dollar. We’ll see.
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