Farm bankruptcies surpass Great Recession levels in upper Midwest

[goldenequity]

Farm bankruptcies surpass Great Recession levels in upper Midwest
https://www.axios.com/trump-trade-wa...d4a48707e.html


An analysis by the Federal Reserve Bank of Minneapolis found that 84 farm operations in the upper Midwest filed for Chapter 12 bankruptcy from June 2017 to June 2018.

Why it matters: The number of bankruptcies filed by these farm operations is double the total from 2014 and even surpassed the mark hit in 2010 at the peak of the Great Recession. Current price levels and trends suggest the number will continue to rise, according to the report.

[Swordsmyth]

Rising interest rates will do that.

[Danke]

Farm Aid II!

[idiom]

Only 84 farms went bankrupt? That's really low turnover. May try getting rid of subsidies, allow a lil bit of competition, then see them eat each other every year.

[tod evans]

Not many Mom-n-Pop farms left...

[Intoxiklown]

Rising interest rates will do that.

While fluctuating, rates have been falling due to markets like housing (builder sentiment, new buys, ect) slowing.

It's a "pick your poison" thing.....

Want the Fed to keep rates low to facilitate cheap borrowing to keep pushing the economy? That will push rates up naturally as that economy creates inflation.

Want the Fed to raise rates to it's neutral goal of 3% to attempt to slow that "hot run in the economy"? That creates inflation.

The worst thing Trump EVER did was use the economy as "proof" of his policies. Because market confidence in his election along with his tax cuts, coupled with the "free" money stemming from low rates established during Bush and Obama trying to keep the economy from imploding created a boom. A boom that has been augmented with his tariffs that have companies moving a LOT of goods as fast as they can trying to beat tariff deadlines. He should have stuck to his words as Candidate Trump when speaking to the economy and markets as being bubbles built on false data.

Because one thing not talked about much is that tariffs create inflation. Low interest rates create inflation. We all know inflation is bad. Raise rates to combat inflation and you increase the strength of the dollar. When the dollar increases in strength it puts pressure on all that debt held in USD (think emerging markets), causing that debt to not be serviceable. That leads to debt default on US financial groups who made the loans/investments. We all remember what happened around 10 years ago when financial companies had their debt assets defaulted on.

Basically.....we're screwed. And I'm confident everyone here knows this has been a long time building, which is why I say that Trump made a HUGE tactical error in doing a 180 on his position on financials in the US once he was elected and claiming ownership of this economic mess (even though he's doing the same things he was bashing his predecessors for). Because my fear is if it all pops under him he's now claimed responsibility which means people will want "chance" at the polls. And with this disgusting affinity for socialism we see rising across the nation.....I'll give you three guess what "change" they want......

[Zippyjuan]

https://thehill.com/policy/finance/4...new-fed-report

Report only considered a few states.

At least 84 farms filed for bankruptcy from June 2017 to June 2018 in Wisconsin, Minnesota, Montana, and North and South Dakota, according to analysis from the Federal Reserve Bank of Minneapolis.

More than 60 percent of the reported bankruptcy filings for the region were in Wisconsin, which could suggest a large number of dairy farm bankruptcies. Wisconsin is the country's second largest producer of milk.

Depressed prices on farm goods such as corn, dairy and soybeans are also likely leading to a spike in Chapter 12 filings, according to the report. China has also largely closed its market to U.S. soybeans amid the fight over trade.

Chapter 12 allows repayment of debts over as many as five years. It was set up after the farm crisis during the 1980s.

Chinese tariffs in response to Trump' tariffs on them have compounded the impact of large harvests and have driven down the price of agricultural products putting financial pressure on farmers.

There are more than two million farms in the US. https://www.statista.com/statistics/...us-since-2000/

[Swordsmyth]

https://thehill.com/policy/finance/4...new-fed-report

Report only considered a few states.





Chinese tariffs in response to Trump' tariffs on them have compounded the impact of large harvests and have driven down the price of agricultural products putting financial pressure on farmers.

There are more than two million farms in the US. https://www.statista.com/statistics/...us-since-2000/

Prices are not plunging, they are entirely typical, what little effect the trade war has had doesn't even come close to compensating for the corporate welfare BigAg gets.

[Zippyjuan]

Prices are not plunging, they are entirely typical, what little effect the trade war has had doesn't even come close to compensating for the corporate welfare BigAg gets.

https://www.troyrecord.com/news/agri...592573847.html

Agricultural report: Low prices, rising costs hurt farms

SARATOGA SPRINGS, N.Y. >> A mid-year agricultural report says net farm income is expected to drop below 2016 levels this fall, primarily resulting from weak commodity prices.

The main culprit is continued low prices for the milk farms produce, along with weak prices for grains and oilseeds. The greenhouse industry, plus sales of fruits and vegetables are expected to fare better, but are outweighed by commodity declines.

Findings are contained in the report “Northeast Farm Economy — Mid-Year Update,” by Connecticut-based Farm Credit East.

[Swordsmyth]

https://www.troyrecord.com/news/agri...592573847.html

Looks like soy beans are off their record highs, but better than they were.

...

[Zippyjuan]

...

Thank you for sharing a longer term look. About lowest prices in ten years.

[Swordsmyth]

Thank you for sharing a longer term look. About lowest prices in ten years.

Which aren't much different than prices 2-3 years ago.

[angelatc]

Thank you for sharing a longer term look. About lowest prices in ten years.

[IMG]m_household_income.JPG[/IMG]

Not much different than 2-3 years ago, before the tariffs, though. Interest rate increases track closer to this than tariffs do.

[oyarde]

Not much different than 2-3 years ago, before the tariffs, though. Interest rate increases track closer to this than tariffs do.

For some reason in the upper midwest people still finance land and equipment on a large scale which is much more risky than what is considered normal practice around here . I would be surprised if there were numbers like this for Indiana , Kentucky , Iowa . Those dairy farms also probably hire help out that was once done primarily by family adding costs . I would imagine many of these bankruptcies are corporations that over extended . Tariffs have nothing to do with it I would guess .

[oyarde]

Farm Aid II!

I was hoping you would offer to help with my bar tab .

[r3volution 3.0]

[Danke]

I was hoping you would offer to help with my bar tab .

I'm wealthy, but I don't have that kinda money.

[oyarde]

I'm wealthy, but I don't have that kinda money.

I cut back a little when I became a senior citizen .

[Intoxiklown]

Tariffs have nothing to do with it I would guess .

The main effect tariffs are having is having previous markets closed to them as China isn't alone with the Ag "tit for tat". Losing those markets combined with higher than normal crop yields (which caused slightly lower prices. Of course, a $2 dollar decline per bushel with an average yield of 171 bushels this year per acre adds up fast when you start looking at these farms who yield 100k+ bushels then you're talking $30k to $40k in losses) is what's hurting them as far as that goes. Higher rates on top of that is what's really hurting them.

Basically, both sides are right.