Economy Farmers filing for bankruptcy.

[LeonardoBjj]

What’s your first language??

- Portuguese!

 

[Darkballs]

Okay, can we pity their children who didn't vote for him at least?

Your hearts in the right place, but lets be real, the other side wouldn't extend you the same courtesy.

At this point we have no choice. If we bail them out somehow, republicans will lie and try to claim credit. Let them fail. They asked for these policies. Now they have them.

 

[fingercuffs]

My one and only butcher went out of business a couple of weeks ago.

My source of pork belly to smoke and make bacon for months, the size of the duck and lamb shanks all gone. He's such a good bloke too, with a wife and a couple of kids. Fuck knows what they're going to do now.

 

[PainIsLIfe]

You guys have to understand just how interconnected farmer economic stability is tied to USAID.

Essentially, farming doesn't make money because we produce more food than the nation needs to support itself -- too much supply. However, if we reduced farming to just US needs, the farming industry itself would die -- not enough demand. So, the US government, through organizations like USAID, buys a shit ton of US agricultural production and then redistributes it around the world. This creates the demand that justifies our farming industry producing enough food to stay solvent.

When USAID starts cancelling contracts and other projects, part of what that money was buying was from US farmers. Without that income, many farmers run the risk of not being able to sell their supply. This means that either prices drop, hurting them, or the supply sits unbought and they eat the storage costs, also hurting them.

https://www.agweb.com/news/policy/politics/usaid-dismantling-what-it-means-farmers-and-ag-research

Big farms might be able to weather the storm but the smaller guys with narrower margins are going to suffer.

The bankruptcy numbers are just an indication that the trickle down effect is starting to take a toll.

According to that article no farms are affected yet, but they will be in the future. So, none of the foreclosed farms in the OP are a result of USAID cuts.

 

[HomeCheese]

'Left to rot': Farmer reeling over decaying crops as workforce flees ICE raids​

'Left to rot': Farmer reeling over decaying crops as workforce flees ICE raids

President Donald Trump's immigration raids are already having a devastating effect on agriculture, CNN reported on Wednesday, with one farmer in The Dalles, Oregon, seeing huge portions of his cherry crop decay because there's no one to pick them.Ian Chandler "said he’s built up a loyal seasonal...

www.rawstory.com

How frustrating to work all season only to be forced to watch your crops rot on the tree come harvest time.

 

[panamaican]

According to that article no farms are affected yet, but they will be in the future. So, none of the foreclosed farms in the OP are a result of USAID cuts.

That's not how this works. No farms with contracts to USAID are directly affected yet. But farmers buy seed, equipment, etc. based on projections that are often months in advance. But they're also buying on credit. If market direction deviates from the previously anticipated direction, the financial impacts hits all farmers, not just the ones withr immediate contract with USAID hits.

For example: Imagine that 6 months ago, a farmer bought seed with the expectation that the market for his yield will be $5. He's buying that seed on a loan. However, if the market learns that USAID will be purchasing less product in the future, now you have the same supply and less demand. That means that the market price for that future yield is only $4.

Depending on the margins that our farmer is holding on his crops, he might no longer be in a position to service his debt. It doesn't matter if he has a contract with USAID. He's selling to the market and the market is paying less.

That's what I mean by the interconnectivity of USAID and farming. USAID's purchases provide the market demand that keeps prices high for all farmers, not just the farmers they directly contract with. What you're seeing with the bankruptcies is that the market isn't going to continue paying current prices for crop yields. But the farmers bought their seed and equipment when the price expectations were higher. And the reduction of USAID from future purchases contributes to lowering price expectations for everyone.

 

[PainIsLIfe]

That's not how this works. No farms with contracts to USAID are directly affected yet. But farmers buy seed, equipment, etc. based on projections that are often months in advance. But they're also buying on credit. If market direction deviates from the previously anticipated direction, the financial impacts hits all farmers, not just the ones withr immediate contract with USAID hits.

For example: Imagine that 6 months ago, a farmer bought seed with the expectation that the market for his yield will be $5. He's buying that seed on a loan. However, if the market learns that USAID will be purchasing less product in the future, now you have the same supply and less demand. That means that the market price for that future yield is only $4.

Depending on the margins that our farmer is holding on his crops, he might no longer be in a position to service his debt. It doesn't matter if he has a contract with USAID. He's selling to the market and the market is paying less.

That's what I mean by the interconnectivity of USAID and farming. USAID's purchases provide the market demand that keeps prices high for all farmers, not just the farmers they directly contract with. What you're seeing with the bankruptcies is that the market isn't going to continue paying current prices for crop yields. But the farmers bought their seed and equipment when the price expectations were higher. And the reduction of USAID from future purchases contributes to lowering price expectations for everyone.

A- farmers shouldn't base their livelihood on govt handouts.

B- still, none of those farms in the OP are because of USAID cuts, because those would be loans for seed that they are gathering now.

 

[panamaican]

A- farmers shouldn't base their livelihood on govt handouts.

B- still, none of those farms in the OP are because of USAID cuts, because those would be loans for seed that they are gathering now.

A -- they don't. The US government is invested in sustainable food prices around propping up farmers. Without those government handouts, the cost of groceries to the general population would skyrocket.

B -- I didn't say the farms in the OP are directly because of USAID cuts. I said that projected USAID cuts contributes to lower expected prices for the farmers' crops. The farmers with USAID contracts will have their contracts honored. But it's the farmers relying on market prices who will suffer.

Example: You and I both sell horse buggy whips. You have a contract with the government. I sell direct to market. The market sets its purchase price for buggy whips based on demand for our supply. That demand is partially driven by how many whips the government is buying. If the government is buying 50% of the whips, the other 50% is in higher demand.

Then the government announces that they will no longer be buying 50% of the whips in the future. The price for whips will go down because the expected demand for whips is going down. You will not feel the effect because your contract with the government will be honored. I will because the price for what I sell is decreasing due to the expected lower demand and excess supply. So, anticipating my future lower revenue numbers, I file bankruptcy to restructure my debt taking into account lower prices for buggy whips in the future. You do not have to do this until your contract with the government comes to a conclusion.

My bankruptcy is a forerunner of a change in the market. Your immediate market is unchanged because your buyer is contracted to you for the near future.

This is a basic supply and demand issue when a market knows that a major consumer of a product is pivoting to fewer purchases in the future. Those insulated with contracts are protected while those relying on market rates are not.