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First they came...
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Keith Mudd
Posted 7/1/2018 15:54 (#6844558)
Subject: First they came...


Monroe City, MO

The story below about the Dairy farmers losing their contracts with Dean Foods made me think of the Martin Niemöller poem First they came... (with revisions)

First they came for the chicken farmers, I did not speak out because I was not a chicken farmer.

Then they came for the hog farmer, I did not speak out because I was not a hog farmer.

Then they came for the dairy farmer, I did not speak out because I was not a dairy farmer.

Then they came for me -- and there was no one left to speak for me.

This should be, but won't, a wake up call to those of us in agriculture. I've told others for years that we will see a time when an individual could have a bin full of corn and that corn would have no value.

The one and only similarity between the chicken, hog and dairy farmers is they were contract producers. Once they gave up control they lost their ability to control their destiny. I realize they had no choice in most instances but to sign a contract. The point is a contract producer, regardless of how much he is told he is necessary, is only necessary until the contractor finds his replacement.

Going back to that bin of corn that has no value. If contract grain production takes hold the individuals who remain independent will become first, the residual seller of grain, and then irrelevant.

I knew a guy who used to say "when we lose our markets, we lose our freedom." He couldn't be more correct.

I had a front row seat to the hog industries demise as a component to independent agriculture. In the beginning the pitch was that if you signed a contract you would get preferential treatment, as in a higher price. Once a large percentage of the daily needed capacity was under contract the price for the balance of the needed hogs could be decreased. If a packer had 90% of his hogs contracted it wasn't profitable for him to pay up to get that last 10% because it not only cost him that extra dollar on the additional hogs but also all the contracted hogs as well. It sometimes made more sense to run at less than full capacity than incur that option. This had the effect also of backing up hogs that had to come to market in the future adding another nail to the coffin of prices.

Don't think this can't happen to row crop production. As the protein sectors all vertically integrate (possibly at 75% percent complete now) they will look to consolidate the grain needed to feed their animals. In the beginning it will pay a bonus to market only to the integrator but with the demise of the competitive market for grain row crop  producers will be forced to make the same decisions the chicken, hog and dairy farmers have had to make.



Edited by Keith Mudd 7/1/2018 15:57
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