12 billion subsidy
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Started by wglassfo - July 24, 2018, 5:17 p.m.

Trump announced 12 billion aid to americian farmers

Help me do some math

This is complicated and I might make a mistake so help me

I know farming is tough but nobody twisted my arm to decide on a career in farming

I take my lumps which have been many and painful, yet I choose to continue

So; Lets examine this 12 billion

Approx

 90 million of corn acres

80 million of bean acres

50 million wheat acres ???

50 million acres of pasture, hay, veggies, seed crops and other

Vast acres of desert that need 10 acres per 

animal unit and much of that is Federal land

So:

 Adding up all the known acres [270 million] and adding the "equivalent" of 50 million acres" for additional arid, desert and federal land commonly used for grazing

{which may be more than 50 million [IDK] but not as productive by a large margin thus the fudge factor]

Equals approx. 320 million acres to receive subsidies of 12 billion if all AG is to share the 12 billion on an equal productive basis or harm due to tarriffs

Assuming a modern farm is 1000 acre units

 on average,

[1000 makes my math easier to use multiples of 1000]

That means each 1000 acre unit will receive almost

40,000.00 of your tax money or fiat printed from thin air in which case your tax dollars will not be used

I used a bit of the fudge factor as nobody knows how the 12 billion will be divided up per farmer

Thus 40,000 is a bit high [on a purely mathematical factor] but some may receive more than others so I fudged a small amount

So:  the deficit will increase by 12 billion

I suppose 1 trillion deficit with 12 billion added to 1 trillion is a drop in the bucket, and some would say money well spent to keep America great again

 but a billion here and a billion there and very soon we are talking some serious money

If you were laid off, had student loans or had to find a new job etc. would you like a subsidy of 40,000 to ease the pain a bit

Bottom line

I know jobs are plentiful, but most of those jobs pay minimum wage or require special skills

Maybe Bernie is correct

Gov't should pay for lots of stuff

Just call it a subsidy when times get tough or the job market doesn't provide a living wage

And it isn't your fault your income is less than you would like

Just blame it on the gov't and then ask gov't to subsidize your problem

Or: maybe another way to look at this 12 billion

Do you think it will require 12 billion to keep the red states loyal during the mid term elections

Is 40,000.00 per farmer enough???

Looks like the red states is where the 12 billion is going

Looks like this is a one time subsidy and the mid terms just happen to be coming closer

Golly

Using Federal money to buy votes but look over here and call it a subsidy

Yah baby, the folks will buy that subsidy thing

Except not everybody gets a 40,000.00 subsidy

I thought the Dems were the only people that did that sort of thing, to buy votes

Looks like the Pubs decided to learn from the Dems

Who said drain the swamp

12 billion just turned the swamp into quick sand

I very rarely comment on your politics except in this case, I had to raise my voice

Canada can not afford to print fiat from thin air to match this free money

I know I won't receive 40,000 from our gov't

I know this isn't your fault, but stats agree that americian agriculture is the most highly subsidized in the world, and each americian farmer just got another 40,000.00 to add to that pile of money

Would Richard, Vandy and others on this forum, like 40,000.00

I know I would appreciate 40,000.00 and I would also say think you very much

I took a 2.00 drop in soybeans and 60 cents in corn

same as everybody else

Good for the farmer but is it fair???

For Richard, Vandy, mojo etc


Comments
By metmike - July 24, 2018, 5:51 p.m.
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Hey Wayne,

I moved this topic to the Trading forum as this was the most powerful force effecting the trade, especially the beans today.

From: Reuters:

Move to help U.S. farmers shows Trump's commitment to tariffs

https://www.reuters.com/article/us-usa-trade-farmers/trump-to-provide-12-billion-in-aid-to-farmers-to-ease-trade-pain-idUSKBN1KE1YE


WASHINGTON/KANSAS CITY, Mo. (Reuters) - The Trump administration on Tuesday said it would pay up to $12 billion to help U.S. farmers weather a growing trade battle with China, the European Union and others, a clear signal the president is determined to stick with tariffs as his weapon of choice in the conflict.

By metmike - July 24, 2018, 5:59 p.m.
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Am not sure how this 12 billion gets spent.

Maybe it goes to make purchases of US soybeans that go into government stockpiles.

All they would need to do is buy, let's say 200 million bushels and the price would go at least 50c higher for the farmers............and the government owns the soybeans.

The government could then sell those soybeans at a later date or donate them to the world foodbank to help poor people/countries.

By mcfarm - July 24, 2018, 6:27 p.m.
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40,000 dollars....holy cow wayne. Number one lots of these dollars are set to go to farmers. They are for programs. Number 2 I have seen figures of maybe....maybe 5000/ bean farmer not 40,000.....holy crap 40,000?


now on to the bigger picture. November bens are now some 50 cents off there lows. This sell off was not all tariff, it was a huge crop coming and lots of people getting air time need to accept that

By cliff-e - July 24, 2018, 7:55 p.m.
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Meanwhile down at the local farm equipment dealership they've received notices from short line mfgrs. that the cost of raw materials to make equipment and parts has gone up 30 percent since Trump announced tariffs so they are just going to pass that cost on to us farmers. It's only a matter of time before the majors follow suit. A neighbor told me he had considered buying a bale processor but since Trump announced tariffs the price of that machine has gone up $7000 so they scrapped that idea. Trump is screwing us with higher costs and lower selling prices.

By GunterK - July 24, 2018, 8:08 p.m.
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maybe, I am looking at this the wrong way, however.....

If corn and beans went down for last few weeks because of the trade war (grains not being sold to China), then giving farmers some money does not make these beans go away. Therefore, this Trump announcement should not make the grains go up.

I am sure, many people will call this money distribution a "welfare check" for the farmers.... however, I rather see our farmers getting some help, than some country on the other side of the planet, where they receive our help while hating us.

furthermore, as mcfarm pointed out above, a good portion of the recent price drop was caused by crop size.

By Richard - July 24, 2018, 8:53 p.m.
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I am not sure of how much is needed to be fair but I totally support some type of action to help the American farmers at this time if china refuses to buy during our trade war with them.

By wglassfo - July 24, 2018, 9:07 p.m.
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No matter what happens the math is still good

Programs, subsidies who knows

The Trump plan still works out to almost 40,000.00/farmer on average

I agree with mcfarm

That amount/farmer is a bit or a lot over the top

But: It is going to be spent on something

Maybe something like Mike suggested







By wglassfo - July 24, 2018, 9:57 p.m.
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How many people remember the grain reserve when gov't owned huge grain stocks in grain storage

All that did was put a ceiling on grain prices as the market knew there was ample supply and no need to bid up the price

Somebody needs to give this some serious thought or it could not work

I barely remember that program, as I was not so much into world events

If gov't does buy surplus grain, then should be similar to the oil strategic reserve and the market knows it will not come back into the market any time soon

Just rotate the stocks in and out to keep it fresh, but buy an equal amount as rotated out, to keep it only 1 yr old stocks

Also:

What about the live stock farmer

I think cold storage meat and dairy is also in surplus

Maybe that would make it 20,000.00/farmer

 on average

I also think china beef purchases are mostly junk

parts that we don't want like hooves, tails, heads etc not prime rib

Can't blame very much of that on tariffs although it did get a lot of headlines

By cfdr - July 24, 2018, 11:58 p.m.
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Wayne - like I just said in a post here - we need to make the Chinese feel that they WANT TO buy more of what we produce.  Unfortunately, the risk is that everyone might end up producing and consuming a whole lot less of everything, if things go wrong.

But, what choice do we really have?  Keep on the same road - all the while knowing where it leads??


On another note - one perceptive poster on another forum said something to the effect that - no problem - we'll just borrow the money from the Chinese for the farm payments.  (G)

By cliff-e - July 25, 2018, 8:12 a.m.
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Yep. That's right. Just keep calm and keep charging it. And then wait for them to call in the notes. :~/

http://www.thebalance.com/u-s-debt-to-china-how-much-does-it-own-3306355

By mcfarmer - July 25, 2018, 8:32 a.m.
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Surely most farmers here would have been such good marketers they sold 2018 production for over $10 and wouldn't want money not meant for them ?


Shirley ?

By cutworm - July 25, 2018, 8:38 a.m.
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Does this sound right?

$500 Bil of goods 25% tariff =$125 Bil tax revenue -$12 Bill to Farmers = net gain gov $113 Bil

By mcfarmer - July 25, 2018, 8:43 a.m.
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Can't collect the tariff if the product doesn't come in. And isn't that the purpose of a tariff ?

By wglassfo - July 25, 2018, 11:41 a.m.
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Hi mcfarm

You are correct we all had the opportunity to sell at much better prices

I sold 75% of expected crop before a seed went into the ground

I will continue doing the same thing until it doesn't work

I did not get the high, but very close and more than last yr,  enough to pay the bills

I was worried about delivery on contracts until we got the rain

You folks need to stick to your guns or else the trade will never be fair

I continue to think 12 billion was chosen with no real thought unless  buying surplus grain by the gov't

I would hope some of that money will buy meat and dairy

The real danger is devaluation of the yaun

The Chinese don't even seem to try and hide their counter move

Everybody else can't either print or devalue any more than currently doing

The Fed is causing the dollar to rise by limiting dollars and int rate increases

That has got Trumps attention but normally the president and the Fed do not intermingle in policy

I bet Trump does some thing about the Fed or his tariffs on china will hurt USA more than china



By metmike - July 28, 2018, 8:18 p.m.
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U.S. says farmers could get cash aid by October but will not be made whole


https://www.reuters.com/article/us-g20-argentina-usa/u-s-says-farmers-could-get-cash-aid-by-october-but-will-not-be-made-whole-idUSKBN1KI0KA

BUENOS AIRES (Reuters) - U.S. farmers could receive cash payments from a planned $12 billion aid package as soon as late September, U.S. Agriculture Secretary Sonny Perdue told Reuters on Saturday, warning that the program will not make tariff-hit farmers whole.


By rayjenkins - July 28, 2018, 9:20 p.m.
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expect 5-10 cents per bushel for corn and 25-45 cents on bean production

the structure of this program favors high production farmers vs. those with 

low production due to weather, etc.


By carlberky - July 28, 2018, 9:59 p.m.
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Somehow, Wayne, the farm  Corporations will get the lion's share of that subsidy.

 I'm reminded of either California or Nevada actually having a budget surplus, which they decided to distribute to the people.

How ? They gave a few hundred dollars to the registered owner of vehicles. As long as you owned a car, it was nice to get the money ...  but think how nice it was for the car rental companies ! 

By metmike - July 29, 2018, 12:15 a.m.
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Great to hear from you Ray!


I can understand the rational for doing it that way...........to compensate for the theoretical loss in the value of the crop because of the effect of the tariff war but it sort of rewards the producers that need assistance the least.


In other words, it's not just to help the farmers hurt the most......regardless of the circumstances..........it's to be seen with a connection to the losses from the tariff war, so that it maximizes the support/lessens the negativety of the impression of the tariff war for farmers. 


We have a decent crop in most places but the poor guy who has half a crop is going to get half as much assistance as the one that has a bin buster. 

By mcfarm - July 29, 2018, 11:04 a.m.
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mike, it seems big knows no other way, The unfairness of a guy in Missouri with 1/2 a crop compounded by the tariff loss should not be discounted. On the other hand if this tariff loss is real one would think it hurt the most on '18 crop and each bushel was hurt the same, Ohhh for the days when big gov would enter every decision. Bet if the tariff thing took beans too far one direction the reaction would be too far in the other direction. Too bad this falls election has to be factored in this whole deal.

By mcfarmer - July 30, 2018, 8:05 a.m.
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A person just has to decide what the purpose of the program is.


Is it to help individuals struggling financially ? Is the purpose to offset losses that resulted from the tariffs ?

What about my neighbor who took prevent plant ? Should he get anything ?

Whenever you try to do more than one thing many times you fail at both.

By metmike - July 30, 2018, 10:52 a.m.
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Excellent points mcfarm