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| Peter Thiel's quote, "Competition is for losers," means that successful companies should avoid competing directly and instead strive to build a unique, dominant market position, or "monopoly"
i`ll use Thiel`s quote to set the stage, because some will say "let the markets work!" and yes, in the past if there was 300 hog farmers in the county and everyone raised too many hogs, the price dropped and some got out of the business and the 5 year cycle started over. of course 30yrs later the hog market has been ruined, but is probably the blue print for the rest of ag commodities. with corn W Bush opened up ethanol in a big way, China was growing and needed beans, Brazil production was half what it is today. I don`t see a cavalry coming over the hill to rescue us this time, doesn`t mean there isn`t one, I just don`t see anything.
i`ve noticed quite a few "retirement" auctions, guys in their 60s in that 1,000 acre size are pulling stuff to consignment sales, Facebook market place, Craig's list and it`s selling pretty good actually. I went to a rare live sale by Kiester Mn the other day no bargains 12 row, 20 yr old Kinze planter $34,000 9` New Holland haybine $22,000 (yes that`s right) https://www.hmauction.com/auctions/6489-live-and-online-clean-farm-r... Now is a great time to have a sale, new stuff ridiculous high priced, but at some point we`re gonna run out of beginning farmers that need a 12 row planter and 9` haybine. these 500 acre farmers that retire, the land gets bought or rented to a 10,000 acre farmer, not so much a start up farmer renting his first 200 acres.
So, I don`t know, i`m past my salad days . i`m thinking in about 5 years, if you`re a little guy there just won`t be the good used equipment (on top of all the other challenges) . the local elevators consolidating and are see by the really big guys as "a market for suckers" or at least a market as last resort. many of us say "get the government out" and that`s fine (i`ve finished my salad) but it`s hard to write a happy ending to this story. | |
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what does farming look like in 5 years?
