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Whats a Farmer to do....

Bamby

New member
Hemp Ethanol is About FIVE TIMES CHEAPER than Gasoline

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Do you feel something happening? Do you feel like maybe we are on the brink of something incredible (possibly) as humans? For as much havoc as we have wreaked on this planet (and continue to wreak), sometimes I feel like the way we are coming back together, to stand together, to rise together, to be guided by our own individual moral compass rather than the tyrannical leaders is the point of this grand social experiment.

Sometimes.

Recently, UN scientists released a report that apparently shows the ‘human-made’ hole in the ozone layer is reversing in size. Okay, so what if we can work together and accomplish sometimes great?

Such is the case with the legalization of industrial hemp.

Hemp is now being recognized for being a healing and practical plant and is finally allowed to grow freely again. The mainstream is becoming okay with hemp. Even the politically-conservative, good-ol’ farming neighbors down the road have two fields of hemp growing this year.

To really see where we could be headed with hemp, think about a recent estimate from biofuel expert Tim Castleman:

“Hemp ethanol could be produced for 1.37 per gallon plus the cost of the feedstock, with technological improvements and tax credits reducing the price another dollar or so per gallon.”

If this statement is true, then the possibilities are truly amazing (I couldn’t read more into this as the address cited directed me to a website that was forbidden on my server). What information is out there about the growing of hemp, though, does offer a bit of hope.

Here are a few hemp facts:

1) Hemp doesn’t need as much fertilizer or water as corn, switchgrass or other energy crops

2) Hemp doesn’t require the expensive drying required of corn and sugar cane

3) Hemp can be grown where other energy crops can’t

4) Hemp is more resistant to “adverse fall weather” than other crops

5) Hemp has long been known to be the lowest-moisture highest-cellulose crop

6) Hemp remediates the soil, meaning hemp the ability to extract heavy metals and pollutants from the soil

7) Hemp can be grown in nearly every type of soil, which means nearly every country around the world can grow its own fuel source, which means no more oil wars (what? Oil wars?)

Digging around a little bit, one can find the facts about the first automobiles. The following information comes from a commentary by Hugh Downs in 1990:

“At one-time marijuana seemed to have a promising future as a cornerstone of industry. When Rudolph Diesel produced his famous engine in 1896, he assumed that the diesel engine would be powered by a variety of fuels, especially vegetable and seed oils. Rudolph Diesel, like most engineers then, believed vegetable fuels were superior to petroleum. Hemp is the most efficient vegetable. In the 1930s the Ford Motor Company also saw a future in biomass fuels. Ford operated a successful biomass conversion plant, that included hemp, at their Iron Mountain facility in Michigan. Ford engineers extracted methanol, charcoal fuel, tar, pitch, ethyl-acetate and creosote. All fundamental ingredients for modern industry and now supplied by oil-related industries.”

The fact that (Rockefeller’s)Standard Oil, (Mellon’s) Gulf Oil and DuPont had a large part in the prohibition of hemp is a story for another day.

So with all of this plant’s versatility in the realm of fuel (hemp can be used to make biodiesel and ethanol), the low cost (under 50 cents per gallon for hemp fuel) and the long list of environmental bonuses, if people are really catching on to certain things and we are really coming together to stand up for what we know could be another truth about oil for energy, then it’s only a matter a time before we start seeing motor vehicles running on non-petroleum, hemp-based fuels…again.

ACHNews
 

300 H and H

Bronze Member
GOLD Site Supporter
To me this seems logical, especially for poorer more marginal soils and slopes subject to erosion... Not so much for more prime heavier soils. Take the marginal ground in the Dakota's and let them have at it for example. Short growing season varieties of hemp are probably out there as well..

To make hemp into ethanol is much like converting corn stalks to ethanol. The genetically modified bacteria responsible for breaking the lignin bonds in plant fiber (cellulose) that has been developed for corn fodder will make hemp a possibility. And that bacteria exists because the corn ethanol folks created it...

Regards, Kirk
 
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Bamby

New member
FARMERS IN CRISIS TURN TO HIGH-INTEREST LOANS…
Posted by Jacob Bunge and Kirk Maltais | Nov 10, 2019 | Drudge Report |

Farm debt is projected to hit a record $416 billion this year, according to the U.S. Department of Agriculture.

Financial stress is mounting in the Farm Belt, pushing more growers to take on high-interest loans outside traditional banks to stay in business.

After his local farm bank wouldn’t lend him as much as he said he needed in 2017, Iowa farmer James Kron turned to Ag Resource Management LLC, a Texas-based financial-services firm. Now, when he takes his corn and soybeans to grain elevators near his farm, he signs the checks over to ARM until his loan is paid back in full.

He is one of many farmers leaning on alternative lenders to make it through the steepest agricultural downturn in a generation. With crop prices stuck at low levels, traditional farm banks are placing stricter terms on farm loans and doling out less money, leaving cash-strapped farmers such as Mr. Kron to seek capital from more lightly regulated entities.

While firms including ARM, FarmOp Capital LLC and Fora Financial LLC can be a lifeline for farmers, their loans can carry interest rates double those of traditional farm banks, said farmers, agricultural economists and lenders. The funding can require closer monitoring of how farmers spend as well as liens on each bushel of grain they produce.

“They keep their finger on you,” said Mr. Kron, who has borrowed from ARM over the past three years at interest rates of about 8%. Comparable rates at more-traditional banks are between 2% and 5%.

Five straight years of bumper harvests have pushed down crop prices and eroded farm profits. The Trump administration’s trade war with China has further depressed demand for U.S. crops. Record wet weather this year left millions of acres unplanted.

Farm debt is projected to hit a record $416 billion this year, according to the U.S. Department of Agriculture, up nearly 40% since 2012. Defaults and bankruptcies are rising as well, crimping the ability of cash-strapped farmers to secure funding for seed, fertilizer and fuel.

The total value of loans from the largest banks working in agriculture has climbed about 4% over the past five years, but some big banks have cut back, particularly on loans to smaller, less-capitalized farmers, lending officials said. That reflects their assessment that those farmers face greater risks from low crop prices and a year of bad weather, they said.

“A lot of balance sheets deteriorated to below what a lender would accept,” said Curt Hudnutt, head of North America rural banking at Rabobank, one of the world’s largest farm banks.

Wells Fargo & Co., U.S. Bancorp and Bank of America Corp. have cut their non-real estate agricultural loan portfolios by 8%, 36% and 57%, respectively, in the past five years, according to data from the Federal Deposit Insurance Corp.

Farmers of crops such as corn and soybeans are having a tougher time meeting the financial requirements for a loan, said Michael Swanson, chief agricultural economist at Wells Fargo. He said the bank is lending more to farmers of increasingly popular crops such as almonds and pistachios. U.S. Bancorp and Bank of America declined to comment.

For collateral, alternative farm lenders rely on crop-insurance policies, government payments and crop-sale proceeds rather than real estate, equipment and other assets. Lenders said that allows them to lend to farmers who don’t own much land or are working their way out of bankruptcy.

“We can keep the grower farming,” said Billy Moore, president of insurance and field operations at ARM. The 10-year-old firm, backed by private equity, lends to 1,600 farmers in 19 states. Mr. Moore said the firm’s loan volume has grown at a 40% rate over the past three years.

David Kohl, professor emeritus of agricultural economics at Virginia Tech, estimated such firms supply about 2% of financing to U.S. farms. They can provide a financial bridge to struggling farmers, but their looser regulation allows the firms more control over rates and terms, he said.

The trade war with China is putting a strain on the U.S. agriculture industry. WSJ’s Jason Bellini sat down with a group of farmers from the corn, beef, soybean, and dairy industries to hear how tariffs are affecting their businesses.

“It’s shadow financing for ag,” Prof. Kohl said. “It’s hot money trying to find a place to get a good return without a lot of oversight.”

Heath Jobe, a 32-year-old Arkansas construction worker and farmer, said he quickly secured a loan from ARM after showing that his crop was insured and that he had enough equipment. A week later, he had $118,000 to buy seed, chemicals and fuel.

Dry weather hurt Mr. Jobe’s rice, bean and corn crop in a recent year. When he tried to make a claim, his insurance company said he hadn’t properly documented his crop losses. Loan payments carrying an interest rate of about 9% piled up. Mr. Jobe said ARM turned down his request for a new loan. A few months later, he filed for bankruptcy.

“If you don’t make a crop and you have a bad year, they’ll clean your clock,” Mr. Jobe said.

Mr. Moore of ARM declined to comment on the specifics of Mr. Jobe’s case. He said such outcomes are rare.

Some bankruptcy attorneys said costlier terms from nonbank lenders can make it hard for farmers to shore up their finances. Joe Peiffer, an attorney in Iowa, said a client secured a $500,000 loan from Fora Financial, a New York-based small-business lender. The loan carried an interest rate above 30%, Mr. Peiffer said, and required daily payments through automatic withdrawals from the farm’s account.

“The money was extremely expensive,” Mr. Peiffer said. He said the farmer, who declined to be interviewed, has liquidated his operation. Fora didn’t respond to requests for comment.

Other farmers said alternative lenders gave them a lifeline when no one else would. John Bulman, who raises cabbage and grain near Elizabeth City, N.C., said he filed for bankruptcy in 2018 after a bank refused to extend his credit following a string of poor harvests.

The bank had a lien on his crops, Mr. Bulman said, and he needed fresh cash to finish harvesting and selling them. ARM gave him $400,000 at a rate of 12%. “If it wasn’t for ARM, I wouldn’t be farming today,” he said.

Alternative lenders said new technology allows them to keep closer tabs on crops to make sure farmers are on track to meet their payment terms.

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When will farmers be able to sustain their business without loans again? Join the conversation below.

St. Paul, Minn.-based FarmOp Capital tracks crop growth with satellites and data funneled from farm machinery. If a field is facing pests or disease, the company checks in with the farmer, said FarmOp Chief Executive

Bill York.

While FarmOp can provide quick capital at rates generally between 6.5% and 8.5%, evaluate operations and help farmers monitor crops, those steps are only effective up to a point, he said.

“If they don’t have the ability to efficiently produce a crop, and their viability going forward, we’re not going to be a magic bullet,” he said.

Write to Jacob Bunge at jacob.bunge@wsj.com and Kirk Maltais at Kirk.Maltais@wsj.com
 

Bamby

New member
"Bankers in the Kansas City Fed region expected agricultural credit conditions and farm income to continue to decline in coming months," the report read.

It continued: "Although numerous contacts indicated that government payments connected to ongoing trade disputes provided some support, most bankers pointed to an ongoing environment of low agricultural commodity prices and elevated costs as the primary factors contributing to the weakness."

The report says that the stability of farm real estate will continue to provide support to farm finances, and likely will be a key determinant of credit conditions in the year ahead.

And hey, don't worry - we all know real estate will never crash, right?

Farmageddon
 

Bamby

New member
China Will Starve Without American Agricultural Products

Uh, no. This is a very weird argument. It's as if some people assume that the US is China's only potential source for food. China buys agricultural products from all over the world, and has alternative sources for foods like soybeans and pork, including Brazil, Mexico and Russia.

Prices will rise in China, sure, but nowhere near the point of collapse. Again, the Chinese are not reliant on the US for anything, so, the idea that the US has overt leverage in the trade war is simply not true.
 
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