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Tractor Talk Discussion Board

Re: Farmers in America are killing themselves in staggering


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Posted by oldtanker on June 26, 2018 at 19:13:43 from (66.228.255.59):

In Reply to: Farmers in America are killing themselves in staggering numb posted by Greg1959 on June 26, 2018 at 10:01:27:

Kinda odd I think that I know guys on the edge or loosing it all still going on while the only recent suicide in the area was a small business owner that was fixing to loose everything.

And I have to disagree with Bruce: When you are competing in a world market and as a group you produce more than the world can use the price goes down. Don't matter if it's farm produce or hard goods from a factory. Simple business. It falls under supply and demand. When supply meets demands the supplier makes decent money, the manufacturer makes decent money and the end user pays a fair price. When demand exceeds supply the supplier makes a premium, the manufacturer may have to raise prices but will mostly try to cut cost elsewhere and the consumer get held up, generally resulting in lower sales forcing layoffs and factory closings. When supply exceeds demand the supplier gets far less, the manufacturer will make bank and the end users may enjoy lower prices.

Now there are several ways out of an over supply situation. Like with a factory you can idle production. Like some have tried to do with AG production and find another way to use it like making ethanol. Or for the farmer cutting production. Another way is to spark a trade war by barring certain imports or putting high tariffs on goods. But if you look at history that most often doesn't work well. I has and can spark a recession or depression.

But the simple fact for farmers is if you have a market for 1 bushel of grain or one gallon of milk that doesn't mean you have a market for twice that.

Rick


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