Verified FBN Member (KS)

Coronavirus impact on ag

I was looking at the project loss of life from some scientists, and it got me thinking about Ag production. I we did lose 500000 to a million people would we have a huge overproduction in food? And how would the government continue to give us plc payments after all this money their spending. Maybe I’ve just been on the internet too much.

Verified FBN Member (SD)

If we lost 1,000,000 people in the US that would be .3% of a 327,000,000 population. While 1 million seems like a lot, statistically it is not. I would argue that the level will probably end up to being .5% to 1.5%. Don't do the math on that it might scare you. As for the rising debt level I would normally in the past be concerned, but the reality of it is that all of the countries of the world are printing more of their own currency during this world wide pandemic. That makes us the best of the bad in regards to credit, which the current value of the US dollar reflects. If the world had to be held to the "Gold Standard" of the past this would not be allowed to happen without a huge devalue of currency, but that is not the case anymore; the rules have changed by basically throwing out the rule book. It seems when everyone is doing it, it is considered ok. When Bitcoin came out and was not traded on Wall Street most of the world's leaders were concerned that Bitcoin would become the new "Gold Standard". Eventually they got what they wanted by getting Bitcoin listed on the Stock Exchange which ended the threat of a "New Gold Standard". So now we are back to governments having debt they could never pay back. While we look at the US debt level as insurmountable, it still is considerably better then the rest of the world with the amount of vast resources that the US holds along with a strong military. Just my thoughts for what they are worth...

Verified FBN Member (KS)

Thank you for a good response, i was also thinking we would be the best of the bad. I was also thinking of 1 million people world wide, and how much grain and cattle we would have no market for. Thanks

Verified FBN Member (SD)

I would say though that the corn market has the greatest risk with the lack of travel and how that effects the demand of ethanol. I would say that commodity has the greatest concern.

Verified FBN Member (ND)

I would worry about the amount of people passing away. Don't get me wrong this would be sad but with people being on house quarantine I think we will be having a baby boom in about 9 months. Cycle of life.

Verified FBN Member
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Verified FBN Member (MN)

I think government payments, if we are going to get them again, should be paid regardless of planting a crop or not. Otherwise we are just contributing to the oversupply problem. Last year, there were most likely a fair amount of acres planted that wouldn’t have been because MFP was tied to the crop being produced. If you tack on an MFP payment to a PP payment, that’s at least an amount you can pay rent and pay some overhead costs and love to farm another year. PP payments alone don’t pay many bills if you’re rent isn’t dirt cheap and your APH isn’t exceptional. I myself planted some acres because of that very scenario, and I will not be doing that again because I lost more that way than taking the PP. Notice how I say “lost more.” If the government wants to help they can help by deterring some production. I’m not asking for 5.00 corn and I don’t want to get greedy. I live in an area where basis is traditionally -50 to -65. Keep enough acres out to keep corn in that 4.15 range and hopefully everyone can do okay. I think we can all agree that the government isn’t going away so we may as well try to get them to help us out for the long haul. These payments are just temporary bandaids and don’t help the underlying issue.

Verified FBN Member (SD)

I agree with every word you just said and to the above topic of our currency I’ll say if we continue to add to our carry out levels in corn and beans then I’d say our dollar needs start dropping in order to help our exports out and it’d probably help the cattle and hogs out as well as we could start exporting more but if the dollar continues to stay strong and the government incentives the farmer to produce more watch out!

Verified FBN Member (NY)

A baby boom after all this would be kind of nice.

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