Tablerock Ranch eastern Wa | Garvo's post below and others he has penned in the past need further exploration, the parallels between the eighties and today, "although key components are not exactly the same" they do without a doubt exist, component one, like the seventies we have come off several years of both good prices and good production in most of the country in the grain production world, also similar to the seventies we have enjoyed great low interest rates and many of us have used cheap money to update some equipment, "after all we can depreciate it out and offset some large income years" " RIGHT", land values also increased in the seventies to the point that the discussions then would sound very much like what we have had the past 36 months, then like now outside money came off the sidelines driving up prices on land for the working farmer, the main differences I see between the two periods is the interest rates, "being one" and two, non farming America was coming off the roaring seventies, "GOOD TIMES" today America is still reeling from one of the most prolonged economically anemic periods in its 200 plus years, while most farmers were enjoying relatively "good times financially "the last seven or so years the rest of the country has been struggling, what this deviation from the two time periods mean is anyone's guess but I believe we live in a far more dangerous financial time period now then I lived in in the eighties, back to the interest rates, I believe anyone that is leveraged and carries much debt has to ask himself, "if interest were to triple tomorrow would I be able to survive" if the answer is not a definitive yes it may be time to gut check your position, now to the conversation of how this all relates to the cattle world, any comparison to this run up in cattle values with anything that has ever happened before in the cow world just cant be made, IMHO these are truly unprecedented times we are experiencing, the dynamics that has brought us here have been discussed at length on this forum all indicators would show us that strong prices "should remain" for several years to come even with major herd expansion, that being said, things outside of these dynamics "COULD" bring a major correction, some like BSE might have quick but possibly short lived affects other things like a major interest move might have longer implications, in 1980 we bought our first home when we made the offer interest was 8 % when we closed it was almost 13% like some of Gary's stories I will never forget what affect that had on our life, I am as big a bull on the cow world as anyone and have been expanding for over three years, that being said I still plan on pulling some chips off the table over the next two years, many of us have lived a downturn before and it is always good for a younger man to heed advice when it comes to being cautious, always plan for the worst eventuality and a way to survive it. this is not us the cowman, and them the feeder, we both need to make money, the feeder can take it between the eyes overnight, the cowman bleeds from the death of a thousand cuts. GOD BLESS YOUR FAMILIES AND YOUR EFFORTS !!!!!
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Parallels between the eighties and today
