China trade war & soybean biodiesel

Did it cross anyone’s mind that a tax holiday on biodiesel could offset Chinas boycott of our soybeans? Not trying to start a circular political argument. I admit I don’t understand all the mechanics of how this would play out either. I’m probably missing a key element.

I'm not up to speed on all that......
How would a tax holiday off set our boycotts?

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Make it so nobody needs to pay taxes on soybean-based diesel, then that makes soybean-based diesel cheaper/ more competitive, generating more demand for soybeans?

Pros: Increased domestic demand for soybeans.
Cons: Lower tax income, lower demand for alternatives to soybeans, general increase of government distortion on the market and all of the unintended consequences that brings with it

I guess the question is, how big is the current glut of soybeans and how bad is the problem?
Would there even be the infrastructure in place to turn the soybeans into biofuel?

The glut resulted in a 10-20 Billion dollar annual bailout. Loves and BP still sell soy bio @ b5-b20% area.

It’s probably wishful thinking on my part. Because biodiesel makes a noticeable difference in decibels with my aftermarket vp44.

Get the government and speculators hands out of the commodities markets and things wouldn't be as bad as they are.

Brazil can't supply the whole world with beans today...if they ever figure out how to get it to the ocean, then we have a problem. Their infrastructure is so bad that they can grow more than they can manage.


Biodiesel and ethanol only make sense because the government subsidizes them to make them affordable options for alternative energy.
Chris

Farmers are the only group I know that everyone produces as much as they can of the same product and hope there is a market for it. Maybe there needs to be more diversity of what they produce instead of hoping the government props them up all the time.

I'm leaning toward hemp farming and CBD production. After you get the oil you still have a hell of a marketable product. It grows almost anywhere and fast.

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gwhammy said:

Farmers are the only group I know that everyone produces as much as they can of the same product and hope there is a market for it. Maybe there needs to be more diversityof what they produce instead of hoping the government props them up all the time.

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Exactly. Putting all your chips on red seems pretty risky.

gwhammy said:

Farmers are the only group I know that everyone produces as much as they can of the same product and hope there is a market for it. Maybe there needs to be more diversity of what they produce instead of hoping the government props them up all the time.

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This. I love ag but repeatedly kicking yourself in the nuts and blaming the government gets old. You have a guaranteed buyer for your product. Either deal with it or grow something else. At the end of the day it is a business. I think too many new generations took over farms and just assumed it was their god given right to make loads of cash growing the same crops. We have gotten WAY more productive than ever in history. When there is an excess the price tends to drop...

zfaylor said:

This. I love ag but repeatedly kicking yourself in the nuts and blaming the government gets old. You have a guaranteed buyer for your product. Either deal with it or grow something else. At the end of the day it is a business. I think too many new generations took over farms and just assumed it was their god given right to make loads of cash growing the same crops. We have gotten WAY more productive than ever in history. When there is an excess the price tends to drop...

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But, there is not an excess. Hasn't been in years. Speculators got into commodities pricing a few years ago when farmland and crop prices were soaring, and now, there is less crop on the ground than there has been in a few years, we are in the middle of a long drawn out planting season where half the crop hasn't been planted, but yet they knock the crap out of the prices every day?

Brazil had a drought and didn't have the crop they normally had...hmm, but it's the farmers fault for doing all the same things? You know, you guys are right, maybe all farmers should stop producing for a year or two, and then see what you think. Cattle will die, chickens, hogs, turkeys, EVERY protein sources food supply will dry up within a few months...then the people...

You know why farmers are producing at levels never seen before? Because the GLOBAL food economy keeps telling them they need more food. EVERY major OEM has been told that they need to provide more productive and efficient equipment to be able to provide the food the world needs.


Now, is the American farmer spoiled? Absolutely, they can take their grain to a number of different outlets and get a check. However, if you think supply and demand is the sole contributor to grain prices today, you're nuts. Should some farmers diversify, again absolutely, BUT, there is not a market for all commodities everywhere. Certain soils can't grow certain crops, certain climates don't have the seasons for others. The key is farmers finding what works for their market, in their climate, that won't cost them a fortune to switch over to producing.


Now, are farmers too lazy to do that, some of them are. That's a whole other rant, LOL.

Chris

We use a massive amount of corn and beans to make fuel and still feed the entire nation with excess to export. We have a surplus. Making fuel with it is not an effective way to use it and as mentioned previously by somebody else it is not efficient in any way without the government handing money over left and right. The farmers I know have yet to cite the need to feed the world as their reasoning behind growing more per acre. They usually just want to go to the coffee shop and brag like a fishing story.

"I saw 500 bushels/acre picking yesterday."

"No you didnt"

"For a few spots I did!"

Signature600 said:

Biodiesel, solar and ethanol only make sense because the government subsidizes them to make them affordable options for alternative energy.
Chris

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Added another one.

zfaylor said:

We use a massive amount of corn and beans to make fuel and still feed the entire nation with excess to export. We have a surplus. Making fuel with it is not an effective way to use it and as mentioned previously by somebody else it is not efficient in any way without the government handing money over left and right. The farmers I know have yet to cite the need to feed the world as their reasoning behind growing more per acre. They usually just want to go to the coffee shop and brag like a fishing story.

"I saw 500 bushels/acre picking yesterday."

"No you didnt"

"For a few spots I did!"

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I was the one who said making fuel isn't efficient. I wish they would stop wasting ALL of our tax dollars. Stop government payments, energy subsidies, EVERYTHING....but, it's for EVERYONE. Not just farmers.

There are idiots everywhere. Yes, some do it for the coffee shop...not all. You can't say it's all farmers because you haven't met EVERY one. I deal with them all day, every day, for the last 20 years. Are there morons like you say, yes...but, a majority of the people I deal with are honest, hard working people who make sound business decisions. The idiots out there making dumb decisions year in and year out getting bailed out by insurance and Uncle Sam run the other color stuff in this neck of the woods...

So, coffee shop notwithstanding, what reasons do they give you to grow their yields and outputs?

Chris

RonA said:

Added another one.

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Thanks, that's a good one.

Chris

Signature600 said:

So, coffee shop notwithstanding, what reasons do they give you to grow their yields and outputs?



Chris

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I was under the impression that its sort of a double-edged sword type thing. With commodity prices being crap, and overall expenses staying high, as with any other business, you have to get more efficient. That can mean many things, first I would imagine would be to reduce or limit expenses as much as possible. But on the output side, if they can't run more ground to increase there crops at current yields, then the obvious would be to try to increase yields. Now with the claims of surplus, the increase yields can work against them to drive down prices further, but with prices being so speculator/investor driven, that could be difficult to actually determine. Or i could be way off i guess.

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I like how some folks lump "farmers" into one group and they are all dumb and keep doing the same thing over an over again in hopes that the government will keep bailing them out. Funny how most of them around here plant every kind of diverse crop they can and pray that just one of them will make enough to pay the bills to pay for the other crops. Maybe this year the cotton will make. Maybe the wheat won't get hailed out. Maybe the bean demand will make a little profit. Maybe the cattle market won't be schidt due to the ideocracy of the American people.

The ones that I know, family, etc, are not large corporate farms. They are a tight nit group of individuals that bust their asses everyday because their love is to produce everything that this country 'needs'; however, this country keeps finding more ways to screw them to get what they want for nothing. Bailout? Psh. Here's your bailout.....due to Covid, ranchers can get $35 per head of cattle in inventory on or after April 16th. Most ranchers around here consider it a success to make $100 or slightly more per head per year on calves. So....the market crashes, they make $0 on calves due to the ever inflative cost of feed and medicine...then they get $35 as a bailout. BIG....effin'....deal. Bailout my ass. Auto makers got a "bail-out." The farmers/ranchers are not. They will get a better subsidy for any feeders/slaughters sold between Jan 15th and April 15th though. That's a blessing to most who won't be able to pay rent on ground.

Sorry for the rant. Makes my blood boil to read all this bull **** about farming subsidies and the complaints. Give me a total dollar value of farmer/rancher subsidies vs. oil/gas/automaker/etc subsides and show me just how the farmers/ranchers are screwing the government. I'm all ears.

Jory, I got an ag degree and worked in ag my entire adult life before this business. I love farmers as a whole. I am sick of the victim card, though. Want to guess what EVERY farmer drives that drops off a turbo? Not an old **** truck. That is for sure. Their house sure isn't modest. They are doing the one thing they want to do in life every single day. If you are living the life you want to and have a great lifestyle as well then wtf is there to complain about, again? There are plenty of farms that thrive year after year. My issue is with the fact that a chit farmer/businessman thinks it is his RIGHT to do what he wants regardless of circumstance. If you suck at it, find something else. If you have a crap year, guess what? That is part of the business you are in. When I stop seeing brand new denali pickups, new homes, 3 pulling tractors in the shed, and brand new equipment year after year I will start a gofundme for them. There are poor farmers who have gotten the chit end of the deal but I am not referring to them. That is the point I think many of us are trying to make. We aren't pissed about subsidies or government help. We are annoyed that the wrong guys get the help and proceed to complain year after year.

Chris,

Wasnt intending on lumping EVERY farmer into one statement. I think we both know who I was referring to and you and I both know the coffee shop was a bit of a euphemism. The ones making great business decisions aren't the ones biching and moaning on facebook.

We had a sprayer customer in 12 mile Indiana that quite literally wanted to grow the most ridiculous yield possible to just say they can. They had feed troughs with a boat paddle and they were mixing 28 and a bunch of other chit to spray on their field. They applied 28 through irrigation as well. They live in an area with some pretty killer ground already. This was around 2013 when I worked for New Holland. They were shooting for 500bu/acre. Sounds ridiculous and likely was never achieved but this was a successful farm wasting money to simply be able to say they did it. That is the kind of crap I am referring to as coffee shop talk. I apologize for generalizing farmers. Some of them do suck, though.

I’m neighbors with zfaylor. I see what he sees. I don’t think anyone was lumping all farmers together either. Farmers can complain about farmers. The farmers in my family regularly complain about other family farmers.

And I wasn't directing my statements directly at zf or anyone else for that matter, just venting about how I get to sit around at my job and other places and listen to people ***** about "famers/ranchers" when most of the people *****ing have not one effin' clue what goes on. Just like cops, there are a chit ton of bad apples that ruin it for everyone. There are very few farmers around here that have it made in the shade like the big farmers up north where the corn is tall and the machinery is all brand new and cost 1/4 million each. Not the case here.

Signature600 said:

Biodiesel and ethanol only make sense because the government subsidizes them to make them affordable options for alternative energy.
Chris

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No, we subsidize them (taxes)...

Just like solar, wind turbines, and all the other rainbow fair tails.