Posted 7/15/2012 21:21 (#2487393 - in reply to #2487312) Subject: Re: Ok what if the corn # is
North Central Iowa
We all talk about 1934 and 1936. Well what if this year is just 1934 and 2014 will be 1936.
I don't think that a lot of our city friends realize how much this is going to affect them in another year.
If you look at all the new equipment, bins, Machine sheds that have been built or bought in the last 5 years. All farmers could go 5 years without buying a thing in new assets. This will really slow down the manufacturing in this country. Then wait for the multiplier affect to show up as they quit buying new stuff.
We all knew the 80 's would come back. But this time its different.
This time it will not be debt that will shut down some farmers but it will be not having enough assets to be able to borrow enough money for cash flows.
The banks will require more assets to the amount of borrowed money for cash flows. They are not going to let borrowers run with razor thin margins on this high cash rent ground knowing that we can have crop failures even with these new hybrids. I will bet we will see quite a jump in crop insurance cost for next year. They are not going to payout all this money without getting it back from us in the next few years. They know that the lenders will force borrowers into crop insurance.