abetterplace

The Ag Industry: Another Credit Crisis Casualty?

Well Jimmy, the Journal is partially correct. They undoubtedly do not realize that many farmers in the US have been financed, at least to some extent, by local farm co-ops and chemical companies. It remains to be seen how much of that money will be on the table for the 2009 crop.

Another major player will be Opec. By allowing oil prices to slump, they are betting that grain prices will follow, allowing a cool down on grain based fuels and removing the urgency drive to alternative fuels. I would bet that the US will do just that.

While our government is pumping all this money into the "system", looks like farmers will be getting less according to Obama's statement last week on cutting out "millionaire farmers" from the farm subsidy payments. What do most farmers own that make them farmers? Land. I know there are many large
estates and corporations that own land not deserving of subsidy money, but many, many farmers have a few hundred acres of family owned land. When put on a balance sheet, this land would make many of them into millionaires, yet most of then have little cash money. I hope the Feds don't get overzealous in their subsidy cutting next year.