EC Nebraska | StxPecans - 7/4/2020 13:13
I am pretty sure they have the ability. I don't think they want to.
Edit to add.
What I am saying is the subsidy these crops get by tax dollars what is the true cost of production of our soybeans. China probably understands this and just buys it from us knowing that's cheaper.
Current US ag subsidies do not affect the price of corn or soybeans to any real extent. Rather, they increase the price of cropland that can grow subsidized crops.
Think it through. What would happen if the FSA closed down? Would it affect the mix of crop acres to any real extent? Not enough to matter. We're overproducing all crops, so none of them are likely to pull acres very hard.
Perhaps it would reduce the overall total US crop acres. What would be done with the idled acres? Perhaps pasture. Perhaps a few cattle spend a few more weeks on grass before going to the feedlot. Perhaps a few more cattle are grass-finished and direct marketed. Those acres are still producing livestock feed, even if it's a bit less.
What about the CRP acres? Let's say that all contracts are canceled, next year's payment will be made but it will be the last one and the ground is free of restrictions as of 1/1/21. What happens to corn and soybean prices then?
And, ultimately, suppose that, for some reason, the US reduced actual total grain production below demand. Would that raise prices very long? How long would it take for SA and other areas to pick up the slack if grain prices were higher for an extended period? A few years, not many.
Do you still think that US farm subsidies can set the world price of grain?
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China ag trade
