CanyonAg77 said:

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WestTexAg12 said:

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I've personally seen farmers take advantage of this. You know what they're doing when you see them planting during a 40mph wind in west Texas near the last day of planting season. No way seed will take and they just collect federal insurance payment.

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If you plant and nothing comes up, you can collect insurance.

If you don't plant, because it makes no sense to do so, you collect nothing.

Which would you do?

I think the phrase is "blame the game, not the player"

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Oh, I'm definitely blaming the game.

SPI-FlatsCatter 84 said:

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CanyonAg77 said:

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Quote:

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End current policy which allows producers to profit by growing a substandard crop cheaply.

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Wut?

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If you aren't aware of this practice then you are woefully uninformed

"Insurance farmers " have been playing that game forever……since the programs started

Spend $1000 growing a crop that can be insured for a Net Net $1,500-$2,000/ac

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So, to expand...

I'm not going to expound on every situation, but for the majority of them, insurance works like this:

You have an established yield, based on the last 5 years of production. You then insure and pick the percentage of that established yield you want to cover. Least you can cover is 50%, 65% is pretty common.

You then have to grow a crop, and do it in the normal manner. You can't run a planter without seed, fail to cultivate, spray, irrigate, or whatever the normal practices are in your area.

Let's assume that you elected 65% coverage. At the end of the year, if your actual yield is less than 65% of your established yield, you will collect insurance. Remember, this is after you've put in all the normal inputs, i.e. money

(Established yield x 0.65) - (actual yield) = payment yield.

So let's say your established yield is 100 bushels per acre of corn. So the most you'll get paid on, assume a complete 100% loss, is 65 bushels. If you have some crop, you'll get paid less. Assume you harvest 60 bushels, insurance will pay you for 5 bushels.

Now the fun part of that? If you have a 100% loss, your next 5 year average will drop to 80 bushels per acre, And 65%of that is just 52 bushels. Keep this up for five years, and your established yield goes to crap.


As an aside, you claimed you could "insurance farm" and net $2000 an acre. So you expect to collect $3000 an acre, since it cost you $1000 to farm. Corn insurance price this year is $4.16 a bushel. So you are getting paid for 721 bushels/acre of insured corn.

If you're at the 65% level, that means your established yield was 1,110 bushels per acre, or 62,000 pounds

The average corn yield in the United States is 180 bushels per acre

The record corn yield ever in the United States was set last year at 623 bushels per acre

So congrats, I guess?

SPI-FlatsCatter 84 said:

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Here you go. Theres plenty more

Whats next ? Cow tipping?

https://www.justice.gov/usao-nd/pr/buxton-man-sentenced-crop-insurance-violation-ending-series-four-cases-involving-potato

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Thanks for proving my point. You have to use good practices, or it is fraud.

Farmers need help. It has gotten entirely too complicated to keep up and it's actively forcing out the small family farms. It is needed, but only if it comes with deregulation. If not, it's just prolonging the inevitable.

Kansas Kid said:

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It has been done. New Zealand went to an essentially free market model in the 80s and they just ripped the bandaid off. It is 7% of their economy vs about 1% in the US. In other words, they still thrive.

There was a lot of hardship for a few years post reform which is to be expected and I could support some transitional support like NZ did for 3-4 years.

https://www.mpi.govt.nz/dmsdocument/27282-New-Zealand-Agriculture

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I'm not sure a remote island nation is the best analog for the US Economy.

But I did find an interesting chart at that link



It seem that Japan and Europe remember how many of their people nearly starved Post WWII, and don't want to see that happen again

As long as that money doesn't go to libs, WGAS?

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Thanks for proving my point. You have to use good practices, or it is fraud.

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True. But I've seen fertilizer receipts for row crops that got applied to hay fields.

I've seen harvests allocated to fields they weren't grown on.

And I've seen pima cotton planted 400 miles from the nearest roller gin, but no one cared because they knew it wouldn't make, but it did have a higher insurance payout.

Tightening up on the games would go a long way towards a more sustainable farm program.

Again, those are examples of fraud.

The other poster alleged that farming to make money off insurance is a common, accepted, practice.

Giving examples of criminal fraud does not support that position.

And as Mas89 and I have pointed out, it's a long term losing proposition.

As for a small island nation, if anything I think it would be worse since they have to import a lot more of their inputs and equipment and exports for them are going to be transported even further. I certainly don't see how it gives them an advantage to the American farmer.

MemphisAg1 said:

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Absolutely. Abundant and cheap food is a good thing.

You want riots in the street? Then expose farmers to the harsh and volatile swings of a pure free market system, with corresponding swings in over-supply and under-supply. We can deal with volatility in lots of things (gasoline price, cost of i-phones, etc.), but inadequate food and water aren't gonna work. People gotta eat and hydrate.

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Govt interference causes the most volatile swings. In the Great Depression our government poured thousands of gallons of milk in the sewer since they put in price floors which caused too much supply. Why not give that milk to the starving and malnourished? Because the government fails at properly engaging in economic principles.

Amazingly, all government spending is very popular, if you only ask the people it's being spent on.

You forgot a couple important steps on your insurance fraud. Farm at least 2 different farm numbers. Do not buy enterprise units and max revenue protection at 85%. Purchase just enough inputs to make roughly half of a normal crop over the entire acreage. Report most all of your production on one farm number which builds yield. Claim nearly a total loss on the other. Year 2, swap claim to farm with inflated yield. Occasionally mix up the entities as to not immediately trigger an audit . These steps will help slow the destruction of your yield history and allow you to operate longer or until you can secure additional farmland. Also, don't waste your effort on low value crops. This method works best in highly productive or irrigated farmland. The juice isn't worth the squeeze on 100 bu Corn or Sorghum.

If you really want to go big, help a family member buy an old or small gin/elevator/mill and write you inflated contracts for the crop well above current market value. You can then use that price rather than USDA average prices to calculate the revenue guaranty of your insurance policy. Your .60 cent cotton instantly becomes .85 cent cotton.

Thank you for taking the time to read this. Remember to tip your Crop Adjuster on your way out.

The sugar industry is an example of the consequences of government interference in agriculture. Price supports for sugar cane and beets created a market for high fructose corn syrup.

BSME83 said:

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The sugar industry is an example of the consequences of government interference in agriculture. Price supports for sugar cane and beets created a market for high fructose corn syrup.

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This is true. The govt interference promotes inefficient uses of resources. That's a problem when economics centers around the allocation of scarce resources with alternative uses. The government is and has been the least efficient users of capital. They fail miserably.

Mas89 said:

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We need to return common sense to the farm policy programs. PL480 was once a program thru which the US gave surplus commodities to countries in need. Our excess supplies of corn, wheat, beans , rice, etc was shipped around the world. Then President Bush had the crazy idea to just give these countries each cash and let them buy whatever from their own area. So Middle East countries could buy Asian crops with our money. Gee, wasn't that really smart…

Not to mention all the grain embargo's imposed by the United States, which restricted selling our products to certain countries, killing the prices. Like the 1980 embargo of Russia, and plenty of others over the last 60 years.

Our farm programs today are actually cheap food programs, designed to help keep prices down and subsidize the end users- including animal feed, ethanol, exporters, and consumers. Without today's farm programs, MANY producers would eventually be forced out and prices would be MUCH more volatile. Many simply could not get financing each year.

A great example would be today's livestock and egg prices. Without the current very cheap corn, wheat , and other grain prices, ALL meat and egg prices would be MUCH higher today.

I just hope our government stays out of regulating meat and egg prices. Would like to see those prices go much higher to hear some squealing from those complaining about the current farm program. They have no idea what would happen without a safety net. Many current farmers and ranchers are the last generation of their family willing to do the work and I've seen Zero interest from those not involved in a family operation to start from scratch.

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This is outdated 1980's viewpoint. I can buy pastured beef cheaper from a neighbor than I can from the fecal laden industrial system. Additionally, there's a lot more to that price that you pay externally. Meat packing plants have to import illegal immigrants who only worked for a short time and then get dumped out on the system.

The USDA sold their soul to vertical integration in the name of cheap food. Yes, they developed a very lean system that produces cheap food, but it also reduces the number of farmers and has evolved into a very fragile system - remember covid?

I could care less what the industrial system does, but they intentionally put bottlenecks on small producers. Pass the prime act, where your local farmer can sell meat cuts to the public without the ridiculous bottleneck of us inspection facility that adds a $1-2 cost per pound.

At the end of the day, you're comparing an industrial system who lives off of subsidies and external costs against small producers who face intentional bottlenecks.

CanyonAg77 said:

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I'd love to see a link to that alleged policy of USDA

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Google Earl Butz. You're welcome.

Mas89 said:

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We need to return common sense to the farm policy programs. PL480 was once a program thru which the US gave surplus commodities to countries in need. Our excess supplies of corn, wheat, beans , rice, etc was shipped around the world. Then President Bush had the crazy idea to just give these countries each cash and let them buy whatever from their own area. So Middle East countries could buy Asian crops with our money. Gee, wasn't that really smart…

Not to mention all the grain embargo's imposed by the United States, which restricted selling our products to certain countries, killing the prices. Like the 1980 embargo of Russia, and plenty of others over the last 60 years.

Our farm programs today are actually cheap food programs, designed to help keep prices down and subsidize the end users- including animal feed, ethanol, exporters, and consumers. Without today's farm programs, MANY producers would eventually be forced out and prices would be MUCH more volatile. Many simply could not get financing each year.

A great example would be today's livestock and egg prices. Without the current very cheap corn, wheat , and other grain prices, ALL meat and egg prices would be MUCH higher today.

I just hope our government stays out of regulating meat and egg prices. Would like to see those prices go much higher to hear some squealing from those complaining about the current farm program. They have no idea what would happen without a safety net. Many current farmers and ranchers are the last generation of their family willing to do the work and I've seen Zero interest from those not involved in a family operation to start from scratch.

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I think there are quite a few people who would be interested. But it takes a lot of money to become a poor farmer.

aTmAg said:

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Logos Stick said:

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Ulysses90 said:

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I support a free market in which farmers are free to buy crop insurance and to trade in futures contracts to hedge.

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I agree in most cases, but for Ag, it affects everyone if they don't cover themselves properly. I don't have that level of trust in the farmers (or humans in general). And if bad enough, it could be catastrophic.

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And yet you have trust in the humans in GOVERNMENT to not screw it up?

Unlike the free market, government has killed millions of people through famine by screwing up farming policy. Farmers run the risk of losing EVERYTHING if they don't cover themselves. You think that enough farmers would do that, to risk nationwide catastrophe? Really?

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There is no true "free market" when it comes to ag commodities. They're a world-wide trading piece with massive subsidies and discrepancies in input costs from country to country. The little the government gives farms these days simply levels the playing field

B-1 83 said:

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aTmAg said:

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Logos Stick said:

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Ulysses90 said:

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I support a free market in which farmers are free to buy crop insurance and to trade in futures contracts to hedge.

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I agree in most cases, but for Ag, it affects everyone if they don't cover themselves properly. I don't have that level of trust in the farmers (or humans in general). And if bad enough, it could be catastrophic.

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And yet you have trust in the humans in GOVERNMENT to not screw it up?

Unlike the free market, government has killed millions of people through famine by screwing up farming policy. Farmers run the risk of losing EVERYTHING if they don't cover themselves. You think that enough farmers would do that, to risk nationwide catastrophe? Really?

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There is no true "free market" when it comes to ag commodities. They're a world-wide trading piece with massive subsidies and discrepancies in input costs from country to country. The little the government gives farms these days simply levels the playing field

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This is preposterous. No commodity is exempt from the free market. That's like saying that other countries have exempted themselves from the law of gravity.

Just because other countries idiotically screw their citizens by distorting their market doesn't mean that WE should then screw our citizens by doing the same. We Americans would be better off if we just let the free market work it's magic here and do what it does better than anything else.

NO SUBSIDIES ANYWHERE

Generally don't like farm subsidies but perhaps DOGE can come up with a way to insure domestic food supplies stay strong without the absurdities it creates.

halfastros81 said:

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Generally don't like farm subsidies but perhaps DOGE can come up with a way to insure domestic food supplies stay strong without the absurdities it creates.

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Cut BS regulations and taxes to make farming less expensive.

Farmer_J said:

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CanyonAg77 said:

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I'd love to see a link to that alleged policy of USDA

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Google Earl Butz. You're welcome.

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I'm welcome for what? You prove nothing and want me to do your work.

I don't have to Google to recall that Butz was a terrible SecAg, was fired over a racist joke, and has been out of office since I was at A&M, which is coming up on 50 years

CanyonAg77 said:

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mccjames said:

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Just take away the 36 billion in climate change studies and divert half to farms.

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Food stamps cost is about $115 billion a year, so the argument is over about 10% of that

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So now we have normalized government subsidies and excessive taxes and are just debating on what amount of subsidies and taxes some people feel are "acceptable".

Ellis Wyatt said:

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CanyonAg77 said:

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Before everyone gets in an uproar about how most of the crop insurance goes to the biggest farms, consider this:

https://www.feedandgrain.com/business-markets/news/15710402/small-family-farms-dominate-us-agriculture-landscape-but-large-farms-lead-in-production-value

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Family farms constitute 96% of all U.S. farms and account for 83% of total agricultural production.

Small family farms, representing 86% of all farms, operate on 41% of U.S. agricultural land but generate only 17% of the total production value.

Government support programs show distinct patterns, with small farms receiving 76% of Conservation Reserve Program payments, while larger farms benefit more from countercyclical and working lands program payments.

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If 14% of the farms produce 83% of the crops, then why the surprise that 68% of the crop insurance goes to 10%? Seems that the top 10% is getting less than their share.

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People have no understanding of modern farming. They can't wrap their heads around the costs involved for even the "family farm" these days.

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This could pretty much be said about any and every industry out there.

Why does the government get to pick winners and losers in terms of who does or does not survive in business - of which farming is a business?

SunrayAg said:

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REEEEEEEE I support free markets and there should be no farm programs!!!

Is the same as saying…


I support eliminating all farms on US soil and buying every mouth full of food from countries with no burden of laws and regulations that drive up production costs. And I also support every small town drying up and dying…

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This is a very over-simplistic statement.

Also...and this is going to sound bad but I really don't care - why is it MY responsibility to pay for the survivial of a town somewhere 20 hours away from me?

My town growing up was an industrial town - petrochemical industry was far and away the dominant industry and our community lived or died on the vine of whether the plants operated or not. In down economic times entire swaths of people got laid off and our town suffered immensely as a result. And these plants produced products that every single person uses every single day across multiple product lines - from food to computer parts.

Why does a town like mine get told to adapt or die ont he vine when the economy sucks, but farming is somehow this sacred cow that must be propped up through taxpayer dollars, to the tune of paying farmers to NOT farm fields? We have convinced multiple generations of people now that some markets are more equal than others.

mccjames said:

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I think every giveaway should be looked at, I just think there are a ton of bigger fish to go after first.

I think a balanced budget in 2 years is not impossible and a surplus in 4 years should be the goal.

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There is absolutely, 100% no way this happens.

Social Security, Medicare, Medicaid & interest on the debt take up every penny the federal government brings in.

You have to take on debt to do anything beyond those 4 things.

According to treasury they say revenue is 4.92 trillion
SS spending is 250 Billion, Medicare is 206 Billion Total of 456 Billion. So it doesn't look that impossible, difficult yes but not impossible.

Biggest issue is we are spending 6.75 trillion which is just not sustainable. 23% of GDP and that is a significant drop from the 30% during COVID years.

Last time we had surplus was 2001 but we were sub trillion in deficit for multiple years. It needs to be the target.

mccjames said:

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According to treasury they say revenue is 4.92 trillion
SS spending is 250 Billion, Medicare is 206 Billion Total of 456 Billion. So it doesn't look that impossible, difficult yes but not impossible.

Biggest issue is we are spending 6.75 trillion which is just not sustainable. 23% of GDP and that is a significant drop from the 30% during COVID years.

Last time we had surplus was 2001 but we were sub trillion in deficit for multiple years. It needs to be the target.

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I'm not sure where you got your data but it is way off. SSA is about $1.5T alone.

I was not a fan of farm subsidies until my wife's uncle who is a lifetime farmer in Kansas explained the issue of govt price controls affecting how much they can sell their crop for at market.

Artorias said:

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I was not a fan of farm subsidies until my wife's uncle who is a lifetime farmer in Kansas explained the issue of govt price controls affecting how much they can sell their crop for at market.

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That's easy to solve. Get rid of price controls. Those are the stupidest economic policy of all. Guaranteed to lead to either shortages or massive surpluses.

Artorias said:

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I was not a fan of farm subsidies until my wife's uncle who is a lifetime farmer in Kansas explained the issue of govt price controls affecting how much they can sell their crop for at market.

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Yeah.. get rid of price controls too. Both are inefficient in the market.

mccjames said:

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According to treasury they say revenue is 4.92 trillion
SS spending is 250 Billion, Medicare is 206 Billion Total of 456 Billion. So it doesn't look that impossible, difficult yes but not impossible.

Biggest issue is we are spending 6.75 trillion which is just not sustainable. 23% of GDP and that is a significant drop from the 30% during COVID years.

Last time we had surplus was 2001 but we were sub trillion in deficit for multiple years. It needs to be the target.

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You need to look somewhere else for your info.

Social Security is $1.4 trillion.
Interest on the debt right now is more than $1 trillion!

We are running $2 trillion deficits now!

A cheap, stable, and safe food supply is a tenant of national security. One of the few charges for the federal government clearly outlined in the constitution is to provide for national security. The issue isn't deriving farm policy to ensure we can continue to feed our population in a cheap, stable, and safe manner. The issue is we spend trillions of dollars on other items that don't have anything to do with national security. I'm not sure I support all that is in the farm bill. I do support the idea of a farm bill. Like all things government, it needs consistent scrutiny to continue to do its job in the most efficient manner possible. I'm not certain that in today's world that is possible but it's not the hill to die on at this point.

country said:

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A cheap, stable, and safe food supply is a tenant of national security. One of the few charges for the federal government clearly outlined in the constitution is to provide for national security. The issue isn't deriving farm policy to ensure we can continue to feed our population in a cheap, stable, and safe manner. The issue is we spend trillions of dollars on other items that don't have anything to do with national security. I'm not sure I support all that is in the farm bill. I do support the idea of a farm bill. Like all things government, it needs consistent scrutiny to continue to do its job in the most efficient manner possible. I'm not certain that in today's world that is possible but it's not the hill to die on at this point.

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The question is whether price controls or subsidies are actually "securing" stable food supply or not. My guess is that we can provide food without the govt trying to control prices or give handouts.