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deep SW On. | Thinking times are tough now and grain prices are low or we need $6 corn isn't reality. In early 80's yields were at best 2/3 of todays yield , interest rates were high and it made you think if you really needed something before you bought it and we didn't have all the price protection -crop ins. coverage there is today . Not just farmers were hurting homeowners re-newing mortgages saw there payments double ,machinery dealers and companies failing . Check the corn bean yields for '80 and see how much guys that didn't enroll in PIC made . '88 country wide drought. Now the GOOD of all that is it brought land and machinery-input prices down to realistic cash flow levels . And other than the privileged few you had a full time off farm job unless you were 55+ or was in livestock too. On interest rates they were brutal but same could happen today with interest just going up 2.5-3% as that would double existing rates as interest was 10-11% for many yrs. before it ran up. Personally I missed a lot of opportunities the last 15 yrs. as before that never had a loan under 10% so I thought that or higher was the norm and guys buying land with a 5% loan would be paying 10%+ on renewal. As far as needin $6 corn for same profits, our best $ profit per hog was in '85-86 and took us until last yr. too match those dollars per hog profit. SO that is around 27 yrs. so if corn profits match the $8 scenario that would be around 2037 ...enjoy your Sunday | |
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Interest rates. Something to ponder on a Saturday night
