Submitted by Doyoufeelme101 t3_z5qt0k in wallstreetbets
The 3 F’s of farming 1. Fuel 2. Fertilizer 3. Feed are all 2-3 times higher now than a year ago. Farmers are paying this price to get seed in the ground or raise livestock. The high expense reports will be around for years! Think about this if you think inflation is over.
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>It is true that the cost of inputs for farming have increased significantly in the past year. This is likely to continue as demand for food increases and resources become more scarce. However, I believe that inflationary pressures will eventually ease as farmers become more efficient at producing food.
There is no being more efficient without fertilizer, and cheaper diesel. So they are filling tanks now for 2023 and the price is $5, Fertilizer is as high as it’s ever been.
Gme next week
Cattle prices are going higher. Long calls on feeder cattle!
Gimme a ticker old man
I’m a farmer and rancher. Google fertilizer, feed, and fuel prices. That is the source
The premise is correct but your facts are kind of irrelevant.
The current drought is resulting in 30%+ drops in yields, and for some crops like tomatoes they're just tilling plants back into the ground or letting them rot because they can't get water. For some crops,ike strawberries, it's a short term price hike. Anything that grows on a tree in a drought area, like almonds, is at serious risk of a much longer spike. It will take 10+ years to recover crops grown on trees. Almond farms in California are a very real risk that no one is paying attention to. In the Midwest it's worse, because drought is going to fuck with soil salinity. Farmers dropped fertilizer on the ground that then didn't get proper absorption. It's going to require several rounds of crop rotations to rebalance the soil chemistry and will impact their ability to use fertilizers on the next couple of rounds, reducing yields even more.
Animal husbandry is severely fucked. Right now beef prices are on the drop. Everyone thinks it's great, but the real reason is that there's excessive slaughter going on because ranchers know they can't afford to feed cattle through winter. Cows are being slaughtered at record numbers too, which means we're 3-4 years out on getting steers back to slaughter to make up the demand. Similar issues for pork, except that china is the real pork problem. They're consuming so much pork that they're building 20+ story slaughterhouses and will continue to keep very high pressure on pork, particularly pork belly prices.
Bird flu what? The last round of avian flu killed over 50 MILLION poultry animals. It's the largest outbreak in history. In the past the infection rates were only about 1/4 from interaction with wild foul. Now they're estimating as much as 80% of the infection is coming from wild foul, which would seem to indicate a much more infectious and pervasive avian flu is making the rounds. Compounded with the increased demand for eggs for vaccine production and the poultry pressure isn't going away anytime soon. Another round of avian flu and poultry might make beef look affordable. Wait for the Audubon society next round of wild bird survey to see how it's playing out in nature too.
I could go on and on there's at least another half dozen major influences including diesel price, Ukraine, worker shortage etc that are also more minor influences. Crazy part is all of them compounding at the exact same time. It's a perfect storm, and famine is now back on the menu, which means destabilizing governments as well.
I will get you one. I do it through a cme
If Ukraine conflict ends, would it help?
It seems both sides are on their last legs - Russians running out of weaponry and personnel, Ukrainians running out of support and - I would argue more importantly, an infrastructure that supports its population.
What is your opinion on land valuations? I own 640 acres of crop land.
Cattle futures are locked in until 2023. Steers will be 1500 before any beef is made
No, it's not. Fertilizer was more expensive in 2008/2012
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Such a broad question do you have concrete water rights? Where is the land located ? What infrastructure is present ?
I agree with everything you said. But just to add some fuel to the fire. Already turning out to be a dry rainy season in CA. A few more of these and most of the central valley production of everything will be toast
Lettuce, tomatoes, peppers...produce will join the fray.
And diesel??
Probably about the same as 2008 when you adjust for inflation.
Socialism= Planned Economy= Famine.
This isn't an accident. It's a necessary previous step to impose totalitarianism.
Notorious examples: Soviet Union/China/North Korea/Ukraine
Spoiler: it’ll never end
It's kinda weird about NTR, why is the stock going down? There will be significant enough demand for fertilizer around spring/summer.
Irrationally, yes, but realistically, no - Ukraine's industrial sector is essentially wiped out, and even after the war, Russian exports will remain widely sanctioned.
If you're metric is whether there is famine or not, I hate to break it to you but capitalism will lead to that too. That's why governments regulate and incentivize some basic shit
If you adjust for the price increase, there is no price increase! Who knew?
What an idiot.
Analysts HATE this ONE simple trick!
Yeah just look up Klaus shwab litterally the leader of the wef praising China's economic policies praising communism.
Also talking about eating ze bugs
No wonder beef/pork was so cheap when I went grocery shopping last week. I was surprised to see fresh expensive cuts getting 30-50% discount. I think your 2nd bullet point would explain it
20 plus years at least
Iraq, Vietnam and Afghanistan ended.
Russian government revenue has been smashed, they won't be able to weather a costly war if that trend continues, regardless of what they might want.
Diesel is up 50%, crude almost flat on the yearly. That's a long way from 2-3 times higher.
The conflict between North and South Korea has not ended.
The conflict between Israel and Palestine has not ended.
The conflict between Ukraine and Russia has not ended.
But it’s cool that we left Vietnam alone. Also extremely relevant (?)
Okay I’ll take your word for it
Only sick freaks like NTR.
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Don't need to take my word for it, data on revenue is straight from their ministry. https://www.wsj.com/articles/russias-shrinking-budget-surplus-limits-putins-war-options-11668174524
"Data released by the Russian Ministry of Finance on Friday showed that in the year to October, the government budget surplus stood at 128 billion rubles, or around $2.1 billion, down from a surplus of 2.3 trillion rubles in the same period last year."
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why? genuine question.
A lot of woman like NTR so makes sense
Also - food prices only make up 15% of CPI.
Food prices can go up 10% - if oil goes down 10% - it cancels itself out.
Food prices can go up 10% - if "owners equivalent rent" drop by 2% - it cancels itself out.
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That’s definitely not how it works.
The cost of ag commodities has a small affect on the cost of the consumer goods price. I used to deal with a snack food company where the bag cost more than the corn used to make the chips. There are 90 loaves of bread from a bushel of wheat which comes out to ten cents of wheat in that $2 loaf of bread and wheat is up about 40% from a few years ago.
Crops are fine, LNG is a component of fertilizer and it’s affecting its price and availability.
Meat producers got in trouble for decades of price fixing through Covid, they have about two years of meat production stacked in freezers to keep prices where they are. They’re releasing the strategic poultry reserve because the government said ‘how does prison sound?’
If you follow those long term farms, you’ll notice huge sections of farmland being bought in new places in the U.S. and fully mature trees can and would be transplanted if their only issue is water in their current location.
Countries now recognize the power of food in populations and the correlation/causation between food insecurity and overthrown government.
More important is - more than half of farmers are retiring in the next few years and were surveyed saying they didn’t have anyone to pass the work onto.
Anyone seen any kids growing up this generation wanting to be tomato or pig farmers? Me neither…
I hav, your kids
My kids are already day trading. Try again.
Trading pigs and tomatoes
Sorry, all out of crayons for you. Those were my last ones.
I know you didn't ask me but I'm going to throw my 2 cents out there. I'm an appraiser for the state of Texas certified to appraise vacant residential/commercial use all the up to developed minor industrial use (like warehouse industrial parks with the exception of the scales and utilities)
Land is it at the most ridiculous price I've ever seen and my coworkers who've been doing this for decades said the same thing. One of my jobs is to analyze sales that we've been given access to buy the buyers. And just as some examples from the last year and a half
There was an appraised price parcel of 17Ac. We had valued for 2022 at $545K roughly. It sold in the morning of july5th for $800,000 cash and then that afternoon it sold again for $1.2M.
Appraised parcel of 13Ac. We have at $130K (Less desirable location) its for sale for $1.3M and has had a $950K offer already.
Lots in subdivided neighborhoods that we had at $42K for .5 Ac sold for $92.5K for each of them.
Lots in another subdivision we're in a range of $18-22K for <.25 Ac. Those all wound up selling for $62.5K.
Don't even get me started on the amounts people have been willing to pay for some of the homes in these places. I feel bad sometimes for the people and the "deals" they're convinced they're getting
I like being a vegetarian.
Diesel in my area is close to 6 a gallon and it was in the 2 dollar range 2 years ago…
The only inflation is of corporate profit.
How do you know all of this? What do you do for a living?
Food inflation is also still sorting through Covid demand shifts. Chicken for example, went from restaurant demand (breast meat focused), to grocery store demand (whole bird focused) overnight with Covid lockdown. That shift called for a different size bird, altering producers plans. We have since shifted back but when growing animals you cannot move as quickly as the market can change. Meat Price Chart/Outlook
Restaurants and hospitality consulting. The consulting component info all of the supply chain management for different restaurant groups on programs like Foodbuy, Buyers edge and other GPOs. It has me connected at multiple points of the supply chain, from farmers and ranchers of all sizes to broadliner distributors to varying sizes of restaurant and food retailers.
Looks like Russia is going to use missiles to flatten Ukraine instead of sending in troops to seize and hold.
Because US tried to rule and not simply flatten the countries.
Only paying 2000 an acre here...
Yes. Ukraine, the country without power, just needs to bide their time.
$8 per dozen eggs in CA - no shot ever lower
Which would be relevant if the OP had said '2 years ago' instead of 'than a year ago'
Pretty much, as they keep receiving external support to fix power infrastructure, as well as ammunition - while Russia continues deplete cruise missiles and other critical military hardware that they cannot easily replace while sanctions are in place, and loses revenue with Europe moving away from Russian gas altogether.
Fair
Diesel according to the national average is up 32% in the last year
I get mine fresh for free from a coworker. He can't get rid of them all. Brings crates to work twice a month. Glad I don't live in a concrete jungle.
Bruh. I read the same shit in March and I’ll read the same shit this coming March.
Inflation is never over. Just slows down compared to the previous year
we'll tell you when you're older
Long days on a farm you don’t own for a shit pay. Yep, sounds like a dream job…
> Almond farms in California are a very real risk that no one is paying attention to.
Good, fuck them.
It kind of is but it’s more like claim everything you can from your $20k loss and get $1k back
How many acres and where? You can get rates close to that here only if it's bulk rate
That you Zuck?
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You just said the same thing just with more details on why food inflation has become entrenched
Not. Even. Close.
I said drought, husbandry and avian flu. You can't read for shit.
And I said “on why food inflation has become entrenched”. Read the fucking headline, the point was entrenched food inflation not your antics on the details. Your points are valid, but so are his. Your desperate attempts to boast an intellectual superiority over people make you appear weak.
Wow, this explains everything i was noticing in the stores. Thank you
Fuck man I just saw a video on this I didn't think it was real
Fuel has a very limited effect on retail food pricing. $1500 in increased fuel costs is nothing when the trailer is pulling 40,000# of chicken. Versus avian flu tripling the price. Fertilizer cost is fuck all for a farmer compared to drought. Like I said, OP has the right idea but the wrong driving causes. Since this is a finance forum it's important to be able to delineate.
Dude username checks out you sound like an ad
Fun fact they're super duper not free those little shits don't pay rent and you have to feed and house them and keep them relatively happy, that guy does have the hookup for life though. I would never leave that job
Eh, I get banned from a lot of forums so I'm not overly attached to a moniker. This was a random gen one that I use on most of my casual posts.
And yet fertilizer stocks suck balls.
The only fucking industry that managed to lose put from the war in Ukraine, which should have made them print dollars all day.
My wife will still put almond milk in her coffee. $17 lattes coming to my credit card bill soon.
There's definitely going to be delayed effects but I'm in ag and I've seen feed go up around 30% and fertilizer around 40% just in the last year or so. I haven't seen 2-3x in the last year personally, but it's still scary to see these inputs go up so much and it doesn't always correlate 1:1 for food price increase - it could be worse/higher. Because when you have to pay 30% more to feed your chickens you're going to decide to have less chickens. Means for example less eggs in the market which are already priced at least 30% higher and it'll probly go higher with the reduced supply.
In the case of crops less fertilizer will be used to cut cost which hurts yield and may even cause the crop to be lost altogether depending on the farming method. I'm not in high volume industrial ag but seems they will suffer the most plus there's increased fuel inputs for the machinery and processing.
Tl;Dr - prices will increase but it's probably more like 40% not 200-300%... For now.
They're not free but they are fairly cheap to have when synergized/supplemented with a garden.
?
Eggs are $6 for 2 dozen at CA Costco, $8 for 2 dozen organic.
HeadtappingBlackGentleman.gif
Well at Albertsons in Social they were 8 bucks just telling you what I saw mate
Well there is the flaw in your thinking, 40k lbs of chicken on a “trailer” is wholesale not retail. Before that the live chickens had to be moved. After that it is moved in bulk to be packed, then it’s moved to distribution centers then on to retail or food service. So fuel has a huge impact on food price and everything because nothing is just moved once straight to retail. Like I said your points are valid and his are to. I could go on about the other reasons as well but you trying to make your reasoning better than his for coming to the same conclusion is just arguing for the sake of arguing. Try to expand your knowledge instead of trying to be knowledgeable.
Lol. It's not a huge impact even if it's repetitive. That's the part you don't seem to grasp. Fuel might add 10% at the retail level if the cost of fuel DOUBLES. Avian flu TRIPLED the retail cost. You can't tell the difference between 10% and 300%. One of us for sure.
I do this for a living, I give projections to the largest public and private restaurant groups in the US. And I have yet to miss. I predicted the massive impact in food cost and sustained supply chain woes I May 2020 and spent a year getting laughed out of the office before everyone started asking me to tell them what was going to happen next.
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Can you validate your second statement? I’m a commodity trader on the fresh and frozen protein market and I’ve never seen the statistic about the two year frozen meat reserve held by the packers?
If anything, the packers are selling at a loss to prevent having to go to a freezer.
Their budget surplus was massive in March, nobody could credibly say they couldn't fund the war at that time. That surplus has shrunk significantly since then, fundamentally different set of circumstances.
You cited Korean war as an example - how much does the Korean war cost their respective governments each year? Stuff all compared to what Russia is spending at the moment.
And $6 per dozen for the fancy heirloom shit, that dude must be shopping at Whole Foods or in a bougie ass neighborhood.
Okay dude they’re on their last legs. War is almost won by Ukraine
It wasn’t common knowledge exactly but it leaked when this (and many other) cases came out. This was so systemic that people got sloppy as they do. There’s more to it than just this link, and I have no doubt there was some effort to squash those leaks. But the did try to initially claim that they couldn’t possibly be price fixing with artificially created shortfalls in slaughter - since they had two years frozen in massive storage facilities.
The amount of fraud that has been found in commodities last couple years is insane.
It relates to this but it was every single one of the big ones, beef and chicken, I think pork was not in it but I’m not sure. https://www.reuters.com/legal/litigation/jbs-reaches-icebreaker-settlement-beef-price-fixing-claims-2022-02-02/ Specifically U.S. but no doubt it affected global chains
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because they arnt making any money the cost of business has increased with the dollar being devalued.
I didn't say Ukraine would win did I? I said it's a costly war and a resolution is likely to be reached sooner rather than later. Ukraine also doesn't have unlimited support, but it's looking like they may manage better than Russia.
Okay whatever you say is what’ll happen. It’s almost over. The money is almost gone.
There is a big mother fucking difference between 'almost over' and 'will never end'. I never said it's almost over.
You'll still get fucked
And they have those 5 dozen mini crates for like $9, used to be $8.
I raise cattle
Thanks bro
everyone’s got to eat!
Very true! Nobody wants to do the hard work. Things will get tough in the future!
It was 1.99 in 2020 and 5.20 now at the local stores. Tax free fuel can be cheaper in spots
Land is crazy as well… 3000 dollar acre land is now selling for 7000 per acre.
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That's almost three years ago now..
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