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what you do need to be worrying about
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JonSCKs
Posted 8/20/2012 12:39 (#2549110 - in reply to #2548920)
Subject: Real life examples


In say.. about 1987.. not sure when we restarted the Land Bank (1950's version..of the CRP.. what the CRP was patterned after..) 85 farm bill I believe..??  Anywho in about 86 and 87 we had Government programs.. transfer payments to grain farmers on the order of around $28 billion dollars.. AND SET-Asides.. up to I believe we were as high as 27.5% or even a little higher on Wheat acreage.. The Government LITERALLY PAID Producers NOT to produce.. AND.. we had like 4.5 Billion Bushels of Corn sitting in Warehouses.. Flat storage.. even Airport Hangers.. just a SEA of SURPLUS CORN..

"Golly WHAT are we going to do with ALL OF THIS?!?"

Farm sales were an everyday occurance.. A LOT of farmers threw in the towel during that period of low producer prices.. Some just sold their equipment and put their acreage in the CRP.. their WHOLE FARM.. in the CRP.  As this ground later changed hands.. investors would buy this..

"You mean I can BUY this ground AND THE GOVERNMENT will send ME a CHECK?!? 

Where do I sign?"  as they viewed this as a vehicle to get some of their tax $$$ back..

Alot of this ground sold for like.. $150.. $200 an acre.. that TODAY is worth..??  $500.. $750.. or more..  Dryland Wheat Ground here is bringing.. ??  $1500 or more.. to even $2,000 and acre.. so ANYONE who bought.. basically ANY kind of ground in the late 80's is pretty much sitting pretty today.

Now step back and consider the big picture.. IF we have something like 450 mln acres of farm ground.. wrong but close.. don't want to look it up... hmm.. okay looking it up.. actually real close.. 442 mln in 2002.. http://www.ers.usda.gov/media/249911/eib14fm_1_.pdf  which is 19.5% of the 2.3 Billion acres in the US (including Alaska and Hawaii

Might as well list it: 

Land area
. The United States’ land area totals nearly 2.3 billion acres. Land used for all agricultural purposes accounted for 52 percent of total U.S. land, while total grazing area (grassland pasture and range, cropland pasture, and grazed forests) comprised 35 percent of the total and two-thirds of all agricultural land. Major land uses in 2002 were forest-use land, 651 million acres (28.8 percent of the total); grassland pasture and range, 587 million acres (25.9 percent); cropland, 442 million acres (19.5 percent); special uses, 297 million acres (13.1 percent); miscellaneous other uses, 228 million acres (10.1 percent); and urban land, 60 million (2.6 percent). Within the nonurban land-use categories, about 94 million acres (4.2 percent of total U.S. land) were estimated to be rural residential area.

Cropland  Total cropland includes land planted for crops, cropland used for pasture, and cropland idled, including acreage removed from production under government programs such as the Conservation Reserve Program. Total cropland increased in the late 1940s, declined from 1949 to 1964, increased from 1964 to 1978, and decreased again (about 6 percent) from 1978 to 2002. Between 1997 and 2002, total cropland decreased by 14 million acres (3 percent) to its lowest level since 1945.
...
Might as well get the CRP totals.. hmm.. 29.5 miln acres.. If I'm reading this one right..??

https://arcticocean.sc.egov.usda.gov/CRPReport/monthly_report.do?method=displayReport&report=July-2012-ActiveContractsSummaryByProgramYearNational-00

So 29.5 in CRP out of 442 is 6.67% of Cropland idled under the CRP.. and again I believe we need a shock absorber.. big crops and low prices such as the mid 1980's vs smaller yields and higher prices.. such as today.

We've got guys here who want to expand.. I could list off 4..5..10 neighbors who are young with families.. trying to get established who would grow their cow herds IF they could get access to more pasture to supplement the wheat grazing, corn stalks grazing.. and what little pasture they do have.  On the other side you have CRP investors who live out of state.. who basically all they care about is staying in the CRP program.. and maybe coming out on weekends or once or twice a year to go hunting..  When they decide to sell.. then it's the BTO's who come in and snatch it up so the smaller guys with the struggling Cow herds can't catch a break..

SO.. would it make sense for the Government to create a program where CRP land holders could RENT a percentage of their acreage to a producer who could then add to his cow herd..???

Rent would come from the Cattle.. which part would go to the owner as an incentive and part would go to the CRP as a fee saving $$$ for the taxpayer.. and part would go to the Cow Herd owner..

Win Win Win..???

How else do you bring part of this fragile land back into production.. as things change the Government could tweak the rates and stiffen things up.. so by then the growing cow herd guy has some profits to maybe add to his land base.. go ahead and work out a deal to buy the land from the CRP holder or what not...???

It's what I would do if I were running things..

AND it STILL PRESERVES the benefits of the CRP.. you can still hunt fish etc.. on the other portion.. you could rotate it.. whatever.. the costs to build fencing and what not so that would have to be included. but for some of this more fragile land.. GRAZING makes more sense then breaking it out with a plow.. and if you decide to go back the other way.. it's already in grass.

One last point.. When the CRP came out the Cattle guys back then didn't want anymore pasture competition so the seeded acres were to a lower quality grass.. we need to start changing that.. IF this pressure for more production is going to continue.. and I believe (??) those interest would concede that.. but better ask them first...

fwiw..

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