Overriding principle of DBAABCSED

There seems to be this awesome convergence of culture going on in America… Hell, worldwide.  Not to worry, this isn’t another fluff piece on how great social media is, if you’re reading this, that’s how you got here.  I’m going to delve into a newfound old school principle.

Don’t Be An Asshole Because Current Supply Exceeds Demand

It really is a very simple concept to master.  The world is loaded with people just itching to make people miserable.  Assholes.  Simple enough, there is your supply.  Why are people like this? Don’t know, but I’m sure they have been trying to answer this question forever. Hell… I bet when Shakespeare wrote his epic novel 300, he was just trying to figuratively illustrate assholes, the Spartans. Why were they all “no you can’t use our fancy rock hallway”… Those guys were outrageous, spearing and slicing everyone with the tenacity of somebody defending their place in line at a Starbucks (Tim Horton’s for you Canadians).  Anyway, I’ll move on now that we’ve established what an Asshole is. 

The demand for jerks is at an all time low.  Thanks to social media like Twitter, you can find awesome people from all over the world to share ideas and thoughts.  Suddenly, you are not bound by some lame Facebook page liking something from somebody you really don’t like.  I think that is what they do over there. Anyway, nobody cares, except me, for the purpose of this analogy.  No longer are you forced to read this far into an article only to realize that the guy is really touting the benefit of social media when he said it wasn’t about that. What an asshole thing to do. 

The world’s cultural walls are crumbling like some shitty German’s masonry work in Berlin.  Don’t be the asshole that nobody wants to interact with, because nowadays there are just too many options on the table to not have to deal with it.  When in doubt, just repeat the catchy acronym DBAABCSED over and over in your head.  It probably won’t actually do any good, but I just needed filler to add to the end of this paragraph.

 

Jerod

P.S, Yea, I got nothing for the spot here, I should have stopped like 10 minutes ago…

Party like it’s 1980…

There is trouble on the horizon.  Most won’t see it until it too late like that shitty Titanic boat captain.  The farm sector is about to be a financial mess.  No the sky isn’t falling, it’s already fell.  Most people in ag have heard stories about the 1980’s.  It was a financial meltdown of epic proportions. 

Let me refresh your memory as I understand it.  I was 3, so I don’t have first hand experience with what went on then, and most guys that do are dead or in a nursing home.  Since they are enjoying their NutterButter at snack time and nobody is ever going to talk/visit with them about this matter, I’m all you’ve got for the time being.  (if that made you feel guilty about not seeing an old loved one, good, go see them jerk)  Basically banks lent capital based on collateral and when the underlying asset (land) went in the toilet, everyone was screwed.  Their balance sheets were a wreck and they then had to sell into a non-liquid falling market that was in the process of deleveraging.  Long and short of it, it wiped out a whole bunch of people and left a very bad taste in everyone’s mouth. 

That bad taste hasn’t went away.  Ag banks still to this day don’t put much emphasis on land collateral.  Yes it’s there and that is nice and all, but this time it won’t matter.  The reason we will revisit the 1980’s style crash is because of debt serviceability. <— (big word) Everyone still looks to land values and wonders if they fall how will it affect the overall health of the ag sector. This is irrelevant because of the point about banks and their view of land assets. 

Most of the country went through the massive deleveraging event spawned by the housing crisis.  I don’t like calling it that, it really should have been called the “greedy gluttonous I want it all” crisis, but people recognize it as a “housing” problem.  Same thing is about to take place in ag for the same basic tenants.  High commodity prices brought about a huge influx of $$$ to people that were accustomed to narrow production margins.  In effect, most guys won the lottery for the last couple of years… and they spent like they did.  Tons of new equipment, vehicles, services, etc… were bought and now all that debt leveraged up on guys balance sheets must be serviced with less revenue for the foreseeable future.  Low commodity prices due to overproduction spurred on by high prices… sound familiar?   Just like the suburban house buyer, they wanted it all, and got it, now it must be paid for.  (no MBS type vehicle in ag sector I think, but maybe worth checking into)  Some justified the purchase citing tax savings, problem is they just traded paying the tax man for paying the ag manufacturing sector.  And, most likely, in order to pay off that debt, they will have to liquidate assets, & that will bring the tax liability back to bite them in the ass…

Question the validity of my argument? Go check out the combine glut sitting on ag equipment dealers lots.  Demand has dried up as all the fun money has been spent and the conservative crowd isn’t biting the same bait.  The buy up and lever up crowd has stocked all the yards with late model used equipment that isn’t selling in the secondary market… sound familiar?  Equipment industry insiders know this, but aren’t about to mention it because the sales of new stuff and gaining market share is their core business.  Only way to keep the party alive is to have enough cash-flow to keep going, and that revenue stream will dry up as commodities fall below the cost of production in a function to buy back demand that was lost due to high prices.

What’s truly sad is this history repeating itself didn’t have to happen.  I don’t blame the equipment manufactures, but I will say it’s easier to get a massive equipment loan than it was to get a mortgage in 2006 IMO.  Guys who get screwed this go around have done it to themselves. We will see how it shakes out.  A lack of rain was a factor that helped bring about the last price surge (2012) in commodities…Most generally, every farmer wants rain, but my fear is that all too soon, some will be huddled with their lenders praying for it to not rain. <— (That’s how you make a big-ass cliché dramatic close to some thoughts people… #face)

Jerod

P.S. If I’m wrong and don’t know Jack shit, it’s on me. If I’m right (which I am) now you can cite this as the “I told you so”

Glyphosate and dinosaurs

Time to shed some light on the bullshit that is the “glyphosate shortage”.  For those of you that don’t follow the ag chemical story-lines in today’s marketplace, which is basically everyone, let me fill you in on my thoughts. 

Once upon a time (last time corn went batshit nuts to the upside) this little chemical used by EVERYONE called glyphosate was thought to be in limited supply.  Everyone who uses this chemical got scared and there was a rush to secure supplies.  Makes sense, if something is running low, get yours before the next guy in case it runs out. Simple enough, good business practice. (If you don’t know what glyphosate is, just google it, I’m not going to use name brands, because those fuckers would probably sue me… I’m going to pisssssss them off in a moment) Anyway, not enough supply because there was some tragic event that made it all go away… TURNS OUT IT WAS ALL BULLSHIT!!!!! I’m not making this up, check for yourself, most products nationwide were priced $60+/gal and in a few short months (after heavy buying season passed) HOLY SHIT, they found some more and the race was on to the downside, $10/gal. That about sums up what happened in short form. 

Fast forward to 2013… Guess what? THERE IS ANOTHER SHORTAGE!!!!!

Bullshit.

Glyphosate is used on a metric shit ton of crop production acres.  It is used so much that virtually everything you eat probably has been touched by it.  It is manufactured by a boat load of companies worldwide, under many names.  I think you could list it as one of the single greatest ag chem achievements in the last century.  Billions of dollars are made in the manufacture and sale of said chem, yet even with that incentive, there is a shortage?  Think logically about this.  Why would all the companies who make this product simultaneously run out? The answer is they are not.  Here is what my take is on what’s happening.

Remember the first shortage? Well, that pissed every producer in the country right the fuck off.  I mean guys purchased a fuck-ton of this stuff because it was going away, only to find out there was plenty all along.  Why did the first “shortage” happen? Because the big guys wanted a piece of the high corn price pie.  Fair enough, people paid what they thought it was worth based upon the info told to them, trouble is, it was lies.  Kinda like running in the theater yelling “Another Johnny Depp movie is about to come on”, and everyone rushing and trampling for the exits. Now corn has been higher for a couple of years in a row now… why hasn’t everyone paid more for glyphosate this time?  Because they are still pissed as hell about last experience.  Well enough time has passed, and some guys are feeling like they have to give gouging one more shot.  Better to get in on the tail end of the big $ corn run than to not get in at all.  It starts simple, like there is a “rumor” floating that another big problem has emerged in production… The sellers smell blood in the water because some fish are biting that lure… word spreads and before you know it, the rumor mill is running at capacity and the whole bullshit rodeo gets going full steam.  It is now about to turn into a self-fulling prophecy. The shortage exists because there is a shortage existing.  Everyone in the retail business is thinking, screw selling cheap, there is talk of a shortage, I’m gonna get mines.  Good for them, but fuck them, I’m not going along with it.  (And you sholdn’t either, because it’s bullshit)

Glyphosate sucks as a stand alone chemical today anyways.  Every chem company rep has learned the dance of “Use multiple modes of action”.  This is a lie made up to protect their ass because they know resistance in weeds is real, so best way to cover it up is to make everyone use another pesticide along with glyphosate so that the weed dies from one or the other and everyone thinks the original chem is still awesome, allowing more future sales of the crappy voodoo water. 

All bitching and no solutions from me is what most critics will say at this point. Here is my solution. Use any and every other chem on the market, you are going to anyway, because that is what the recommendations are going to be. Fuck putting glyphosate even in the spray tank.  They will probably thank you, because that will free up more of the chem to sell to other dipshits who buy the whole shit-story shortage. (And will pay a lot of $, because they are lemmings)

I’m calling bullshit on this, watch and see if this whole shortage doesn’t go the way of a dinosaur staring down an asteroid.

Fuck you ag chem companies,

Jerod

P.S. Spray rig operators, air induction nozzles suck ass, quit using them. Drift is bullshit too, If you cannot spray without them, go fucking flip burgers or fill tacos.

I decide the price, don’t forget that.

Stop listening to everyone. (even me, I’m just as full of shit as the next guy)

It’s time for the annual how much are you worth derby in the grain markets. What do I mean, you ask? (you probably didn’t, but i wanted to inject my own clever cliche shit)  The time is upon us for everyone to come out of the wood-works and “tell” us who produce grain how much we are worth. This happens in several ways… We’ll get to that in a moment, but first…

My issue is being told what to do.  Personality flaw? You bet, I’ll swing at the reaper if he said, “Let’s go, it’s your time” Arrogant? Hell yes, If I’m not going to tout my own worth, damn sure nobody is going to step up and do it for me.  Stupid? Absolutely not, just standing on my own two and a half feet and commanding respect for my work. Amateur? Goddamn right, I’ve played by everyone else’s bullshit rules and have seen how slanted the rules are towards the people with the biggest platform, fuck that noise. <–Twice

Lets get something straight, I’m not the GD Howard Hughes of grain… what I produce isn’t going to fill a barge headed for any of the weird talking countries that buy our shit.  I’m not ADM or Cargill (however, if they paid me enough money, I’d come run their little shitbox companies), but I’m even more powerfull…

I DECIDE THE INITIAL PRICE BITCHES!!!!!!

This puts me in the ultimate power position to dictate what my worth is.  Most producers are so hypnotized by whatever new green or red painted metal BULLSHIT is being pushed upon them, they forget this basic tenant. WE THE PRODUCER CONTROL WHAT WE GET FOR OUR TIME.  Fuck all the noise you read, hear, gossip, tweet, spread, and otherwise absorb.  Ignore all the talk of basis “movement”, it’s just paramount to the level of fuck that people want to put on the backs of producers. Yes, I know textbook definition of basis is “the cost to transport, deliver, bla bla bla fuck my ears and brain hurt”… My definition of basis is the amount that the buyers of grain are willing to disagree with the traders of grain, thus the amount that they are willing to “give up” or “gain” in order to control YOUR bushels. Control is power, and the cheapest way to gain power is to low-ball the idiots that grow the product out of it. Yes, I said idiots, because for far too long, we as producers have been accepting far to little for our product.

I fucking hate when some asshole says, “well, everyone has to make money here..” (farmers always hear this shit from equip dealers and grain buyers) Really fuckhead, I’m supposed to give up my sacrifice of labor, time, and sweat? Because your fatass wants a piece of the pie that you did nothing to bake? GO FUCK YOURSELF!!!

Anyway, I’ve been sidetracked by my own mind… The point of all this random rambling is to remind my fellow farmers/ranchers of their position in life. You guys can say “go fuck off” to any offer laid on the table. Period. No questions asked. Don’t listen to all the bullshit about how it’s only worth this based upon fundamental or technical analysis…. they are only trying to BUY something because they feel there is worth in owning it. 

I’m the industry’s worst nightmare. I know enough to shine a light on everyone’s bullshit & there is not a GD thing anyone can do about it.

 

 

 

 

 

 

Fuck, that Chimay is some good beer.

 

 

Later,

Jerod

P.S. Natural law is the final law.

No habla USDA… toro or (whatever the hell is Spanish for bear)?

Since the crew who posts USDA reports are too busy downloading “fail” YouTube videos or reading my blog posts to get their stuff done by 7:30… Let me summarize what you will read at 11:00. 

IF THERE IS NOT ENOUGH GRAIN FOR EVERYONE, PRICES GO UP &

IF THERE IS ENOUGH GRAIN FOR EVERYONE, PRICES GO DOWN.

Simple enough, now onto the fun shit.

It just struck me tonight as I was thinking of crap to write to make all you laugh, Chicago has two professional sports teams, the bulls and the bears.  I’m probably the 842,593th person to realize this, but it seems significant in a town with the CBOT.  Most everyone… (ok I’ll go back, yes there is a hockey team in Chicago, but hockey isn’t a sport) always takes sides of a bull or bear. Now thinking of how that loose association works, how do you want to be remembered? Are you a “toro” or an “el bearo” <–see that’s not really Spanish, but nobody knows the difference anyway… Pinchehonky FTW

Bulls:

There is really only one famous bull, Michael “ballhog” Jordan. Yes, everyone loves to point at Scottie Pippen (and laugh), but really without Mike, he might as well have been Steve Alford without Bob Knight. Speaking of Bob Knight, Texas Tech at one time had the most badass coach selection person, they got Knight and Mike Leach in Lubbock… Best coaches in the country in their respective sports at the same school.  Then whoever it was, sobered up, looked around and realized they lived in a fucking desert, moved away, and some new guy proceeded to screw up the sports programs. And that about sums up the bullish association… a drunk in Lubbock who made good hires.

Bears:

Staying with the athlete theme… Jim McMahon is probably the most famous bear besides that fatass whatshisname kitchen appliance. Bears everywhere idolize Jim McMahon and his goofy ass headbands. That’s all I can think of. So if you are a bear, you worship some washed-up has been ’80 flaming white-rapping Mormon.

I don’t really give a damn where everyone stands, I’m just like everyone else here, waiting for the wreck like some drunken redneck NASCAR fan.  There you have it folks, that should tide you over till the “real” report comes out.

Jerod

P.S. HRW crop sucks, drought13 is for real, there isn’t enough corn for everyone, and anybody who grows cotton or soybeans is mental.

“Look at it damnit, what end eats and what end shits?”

Been doing alot of thinking about other careers lately.  Eternal drought does that to a guy when you make a living off of the land.  As my mind wonders, I imagine I would be very good as some sort of analyst or consultant on all issues ag related.  I can see it now, perched at the end of some sterile board room table, with the bosses and their clones leering at me.

“Alright, I’ll tell you again… When it fails to rain, cows don’t cycle properly.  Alright put your hand down, I told you cycle means come into heat…. THEY ARE FERTILE!…. never-mind, you’ll catch up. So, when they don’t cycle, they don’t breed and therefore don’t have baby calves. WTF, put your hand down, this isn’t second grade, if you have something to say, just spit it out… Yes baby calves grow up to be feeder cattle, alright moving on. Now without feeder cattle, you eventually run out of beef, simple as that…. I’m going to break your corporate arm if you put it in the air one more time, I don’t give a damn what protocol is… Yes, that is why drought matters to beef prices, thanks for following the bouncing ball all the way to the end.”

Maybe that isn’t exactly how things would go, but probably close.

Maybe I’ll be a pitch-man for a certain credit wing of a company “who-must-not-be-named” that likes to use green paint.

“Alright step right up, get your credit app, no need for black ink, we’ve got a pen handy (wink wink)… all we need to know is that you’ll be back next year to trade/sell us your $900K piece of equipment for the $950K model, because, it’s cheaper to trade than own, err I mean finance, my bad.  Hell yes, put your mail carrier salary on there, it counts! Oh and if you have any egg and cream savings, throw that in there too… just about done… can I interest you in our “metal that is not silver but rhymes with old” key program? It’s where we let you start your machine when it rolls off the assembly line, because that’s a memory you want to share with the grand-kids when they ask where their inheritance went… Let me enter it in the system and see what level you come back as..”

Probably fucked there also.

For now I’ll just stay put and wait it out. I’m blessed with a great wife and wonderfull kids, don’t know what I’d do without them.

Jerod

P.S. If anybody is looking for a great gag to play on your boss, I’ll fly out and give a presentation, on your dime. (plus some, it still is fucking dry)