Is Trump putting farmers on welfare?

[Meanwhile + 49]

Meanwhile, EPA signs off on rule exempting farmers from reporting emissions. The rule codifies the most recent version of the FARM Act, which exempted many farmers from reporting air releases of hazardous substances from animal waste. Environmentalists argued against the provision, saying that farmers should have to take responsibility for the emissions coming from their livestock and crops.  

[Tom Kirkman + 8,860]

6 hours ago, Rodent said:

I'm here all week!

Boom tish!

[JohnAtronis + 78]

3 minutes ago, Meanwhile said:

Meanwhile, EPA signs off on rule exempting farmers from reporting emissions. The rule codifies the most recent version of the FARM Act, which exempted many farmers from reporting air releases of hazardous substances from animal waste. Environmentalists argued against the provision, saying that farmers should have to take responsibility for the emissions coming from their livestock and crops.  

Truth is that Obama got carried away with regulatory adventurism. In this case, it means that we will all be poisoned and doomed if the cattle is allowed to fart 

 

[Rodent + 1,424]

1 hour ago, Meanwhile said:

Meanwhile, EPA signs off on rule exempting farmers from reporting emissions. The rule codifies the most recent version of the FARM Act, which exempted many farmers from reporting air releases of hazardous substances from animal waste. Environmentalists argued against the provision, saying that farmers should have to take responsibility for the emissions coming from their livestock and crops.  

there's only room for one comedian here. 

[Gerry Maddoux + 3,627]

I grew up on a farm in Oklahoma. My father lived through the Dust Bowl. We were as poor as church mice. You'd think that a man like my father would have appreciated farm subsidies. He didn't. He was a free-market guy who believed that a farmer should be free to grow the crops the world needed at the time, and that market demand would regulate the farmer, the same as any other business. He looked upon subsidies as welfare not unlike Sam Shepard's play: "Curse of the Starving Class." Because the above participant is correct in that subsidies take root and become the norm, just another form of heroin for an unwilling addict. Before long, the farmer really can't survive without subsidies. HOWEVER, the farming business has been trying to wean itself off this pablum by its own determination and grit. Until President Trump created a self-inflicted wound upon our economy. Of course other countries are going to try to hurt our economy where it hurts Trump most: agriculture, Pence's hometown, etc. The farming representative said today that while there was an anticipated $60 billion profit in store for 2018--only 60 billion, not much for so much effort--about a $20 billion wound had been inflicted. STILL, despite this, he was unwilling to say anything harsh about this president. So, while the $12 billion subsidy (welfare) will help, it won't counterbalance the damage. People will eventually wake up!

[Cowpoke + 70]

Boom!! More Winning!!

 We Have A Deal: Trump And Juncker Agree To Avert A Trade War:

https://www.zerohedge.com/news/2018-07-25/watch-live-trump-secures-concessions-juncker-avoid-trade-war-press-conference

[Sebastian Meana + 278]

12 hours ago, 李伟王芳 said:

China's president has an PhD. His cabinet members have 11 PhD's in economics, science... US has a guy with a license to run a motel.

I dislike many thing about china, and i think they can't have an commercial war against the US without hurting themselves

But i like the idea of only allowing intelligent, experienced people, patriotic individuals in their certain areas to control the country, you would let a doctor or a lefty economics "expert" run a oil company (PDVSA) would you?

[PaulG + 21]

9 hours ago, Cowpoke said:

Boom!! More Winning!!

 We Have A Deal: Trump And Juncker Agree To Avert A Trade War:

https://www.zerohedge.com/news/2018-07-25/watch-live-trump-secures-concessions-juncker-avoid-trade-war-press-conference

Give it a couple of hours and Trump will say he " misspoke"

[Jan van Eck + 7,558]

You folks might wish to keep in mind that the largest farm subsidies, in terms of dollars per unit output, flows to the sugar industry, and of that, the vast majority go to one outfit:  Fanjul Corporation, owned (no surprise) by the Fanjul Brothers, who are Cuban emigres with Spanish citizenship.  Fanjul Corp. is a vast sugar and real estate conglomerate in the United States and the Dominican Republic. It comprises the subsidiaries Domino Sugar, Florida Crystals, C&H Sugar, Redpath Sugar, former Tate & Lyle sugar companies,[2] American Sugar Refining, La Romana International Airport, and resorts surrounding La Romana, Dominican Republic.The Fanjuls are now worth $8.2 Billion, that's Billion with a "B", all compliments of the sugar tariffs, subsidies, and cheap loan programs  (effectively, 1% interest). 

The net result of the sugar subsidies and tariffs is that sugar grown in Florida and Mississippi is multiple times the price of buying Cuban cane sugar  (horrors!  Trading with the Communists!  Except that we do $600 billion with communists in China every year and think nothing of it). Cuban cane sells for about 6 cents/lb., while manufacturers of say candy in the US pay 29.5 cents/lb. as a minimum, due to market allocations and price supports. 

To no surprise, the Fanjul Brothers are adept political contributors.  One brother writes huge checks to the Democrats, another huge checks to the Republicans, and both then collect some $200 million in free cash  -yep, totally free cash - from the Feds in subsidy payments.  A neat racket if you can get it - except, of course, nobody else is allowed to crash the party. 

The upshot is that the job-intensive candy industry, for one, has to set up shop outside the USA, so US candy manufacturers (other than Hershey) have new plants in Mexico, Guatemala, and Thailand, where they can buy cheap sugar.  The finished products (the candies) are not tariffed, so that is the only realistic way they can still produce a product that has more than a tiny smidgen of candy in the piece.  And bakery products that contain sugar similarly get hammered, all to enrich the Fanjuls.  Just so you know. 

I shall be writing a separate article on how the steel tariffs have benefited the steel industry in the USA  (and which users have paid a price, to be sure). Cheers.

P.S.  the bill for the sugar subsidy is $4 billion a year, and the bill for the tariffs is unknown, but likely triple that, all for the benefit of one Cuban family.  American politics: ya gotta love it. 

Edited July 26, 2018 by Jan van Eck
Added P.S.

[Meanwhile + 49]

23 hours ago, Sefko Trafikant said:

Trump's administration announced it would offer $12 billion in aid to farmers hindered by retaliatory tariffs imposed on U.S. grain, produce and meat exports. The department will use the emergency aid to assist and buy crops from farmers who’ve lost billions of dollars in sales from foreign buyers in the European Union, Canada, Mexico and China. President promised supporters earlier this week that farmers will be the “biggest beneficiary” of his escalating trade disputes with numerous countries,

What happens when other countries gain our markets? Can you do $12 billion regularly? How long does this take? Farmer are saying that 12$ billion is not enough

[Jan van Eck + 7,558]

2 hours ago, Meanwhile said:

What happens when other countries gain our markets? Can you do $12 billion regularly? How long does this take? Farmer are saying that 12$ billion is not enough

The Americans can do $12 Billion, or double that, or triple that, all day long and not even notice it.  Remember that one aircraft carrier is already 13 billion.  The current nuclear submarine program of two per pear is at 7.5 billion.  With expenditures so huge, that farm subsidy is peanuts.

There are two ways the subsidy can work:  (1) straight crop-support payments to the farmers; (2)  govt purchases of the crops for storage or govt sale, again at pre-determined prices. Either way, the product is taken off the market. 

Now, what happens in the world marketplace?  It is not as if there is chronic over-production of farm goods.  Instead, you will see a re-shuffling of chairs.  Assume that China proceeds to purchase grains from Australia and perhaps Argentina.  But then the traditional customers of those countries are left bare, and will divert to purchasing from others - and by default, the Americans.  Further, remember that lower-value crops such as grains are readily converted into alcohols by fermentation, a process for which there is an under-supplied market (limited by the capabilities of the ethanol plants already out there).  Can more such plants be quickly built?  Emphatically, yes. 

Finally, farmers can and should be nudged away from mono-culture crops such as barley and into more specialized crops such as lentils, which have much higher value-added.  Peas, chickpeas, canola, all have ready markets  (lots of those legumes are now produced in Saskatchewan, so you will have market competition, but again the US product would displace those imports). I don't see the China boycott as being anything but a slight nuisance.  The farmers like the current set-up as the Chinese tend to buy large shipments, but hey, so can the US Government. 

[Dan Warnick + 6,100]

5 minutes ago, Jan van Eck said:

The Americans can do $12 Billion, or double that, or triple that, all day long and not even notice it.  Remember that one aircraft carrier is already 13 billion.  The current nuclear submarine program of two per pear is at 7.5 billion.  With expenditures so huge, that farm subsidy is peanuts.

There are two ways the subsidy can work:  (1) straight crop-support payments to the farmers; (2)  govt purchases of the crops for storage or govt sale, again at pre-determined prices. Either way, the product is taken off the market. 

Now, what happens in the world marketplace?  It is not as if there is chronic over-production of farm goods.  Instead, you will see a re-shuffling of chairs.  Assume that China proceeds to purchase grains from Australia and perhaps Argentina.  But then the traditional customers of those countries are left bare, and will divert to purchasing from others - and by default, the Americans.  Further, remember that lower-value crops such as grains are readily converted into alcohols by fermentation, a process for which there is an under-supplied market (limited by the capabilities of the ethanol plants already out there).  Can more such plants be quickly built?  Emphatically, yes. 

Finally, farmers can and should be nudged away from mono-culture crops such as barley and into more specialized crops such as lentils, which have much higher value-added.  Peas, chickpeas, canola, all have ready markets  (lots of those legumes are now produced in Saskatchewan, so you will have market competition, but again the US product would displace those imports). I don't see the China boycott as being anything but a slight nuisance.  The farmers like the current set-up as the Chinese tend to buy large shipments, but hey, so can the US Government. 

I emphatically agree.  😎

[Jan van Eck + 7,558]

1 minute ago, Dan Warnick said:

I emphatically agree.  😎

And that, chum, is a quite dangerous thing to do!

[Tom Blazek + 38]

Its very interesting to me that the Administration is willing to tap the American Tax payers for 12 Billion Dollars to “help farmers”, but so far won’t allow year-round sales of E-15 ethanol blended fuels.  I view the 12 Billion Dollars as a hand out to the Oil Industry, to keep E-15 and real competition out of the fuel market. So why not allow year-round sales of E-15 to “help the farmers,” and reduce the need to hand out money to them? Well that’s easy, the Oil Industry is against it!  So, we’re really paying out these Billions to farmers, to support the Oil Industry and their Fuel Monopoly, rather than let a Free Market Work!

Don’t be Fooled.

Sadly, I believe President Trump is the one who is truly fooled. If his Administration would have moved on allowing Year-Round Sales of E-15 last spring, as promised, he would have guaranteed the Midwest Agricultural Vote this fall.  That would have given Farmers something real to vote for.  Sadly Mr. Trumps Administration sided with the Oil Industry, and their desire to block real competition on the E-15 issue. Now Mr. Trump is left pulling at straws, throwing money around trying to buy back Midwest Votes. Mr. Trump, I’m afraid its probably too late.  You and your Big Oil Buddies – Blew It!

[Tom Blazek + 38]

I learned this morning that the US Imported more gasoline in the Second Quarter of this year than we Exported. This is very surprising to me because we Export a lot of gasoline from the Gulf Coast, but evidently, we Imported even more on our East Coast. So how does the EPA, the API and the Trump Administration justify importing gasoline from Foreign Countries, sending our fuel money overseas, while they are continually blocking the year-round sale of E-15 ethanol blended fuels here in the US? Wouldn’t it be better to be sending that foreign gasoline money to our farmers and US ethanol industry, especially when the Agriculture Sector is hurting?

How About Putting America First, Mr. President?

[Jan van Eck + 7,558]

53 minutes ago, Tom Blazek said:

Its very interesting to me that the Administration is willing to tap the American Tax payers for 12 Billion Dollars to “help farmers”, but so far won’t allow year-round sales of E-15 ethanol blended fuels.  I view the 12 Billion Dollars as a hand out to the Oil Industry, to keep E-15 and real competition out of the fuel market. So why not allow year-round sales of E-15 to “help the farmers,” and reduce the need to hand out money to them? Well that’s easy, the Oil Industry is against it!  So, we’re really paying out these Billions to farmers, to support the Oil Industry and their Fuel Monopoly, rather than let a Free Market Work!

 

Yet there are other problems with ethanol.  It is difficult to transport as the material is corrosive, so you need to ship the stuff in stainless-steel, or poly lined, tanks.  That in turn causes logistics issues.  A more rational approach would be to motivate Midwest States to set up E85  (or even pure alcohol) pumps and tanks, so that vehicles sold in those local markets that are built as E-85 compatible could be sold there, and the Midwesterners could have their choice of buying either 85% alcohol or 10% alcohol-gasoline fuel.  My guess is that the price of alcohol would drop to the point where it would clear the market, so you could go distill alcohol to the end of time and have this vast local market ready to buy. And that is nirvana for the ethanol investors, and the farmers that supply them. 

I really don't see the logic in hauling stainless rail tankcars to Philadelphia and then blending the alcohol into the gasoline, all at huge expense and technical difficulty, when you can easily sell all the alcohol you can produce as E-85 or E-100 right next door. Ford is perfectly happy to build you a pick-up that runs on alcohol, why would they care?  They don't. 

[Tom Blazek + 38]

While ethanol does require separate shipping, we currently ship it all over the US and the world for that matter. Last year the ethanol industry exported approximately 1.6 Billion Gallons of ethanol, all over the world. Last year the US exported almost 11% of its ethanol production, this year the ratio of production exported is running just over 13%. Midwestern Ethanol is currently shipped to California for its Low Carbon, High Octane Clean Burning Benefits. Ethanol’s benefits as an economical octane booster, with an octane rating of 113, and its value in replacing Carcinogenic Aromatic Hydrocarbons in our gasoline pool like BENZENE, are too good to not take advantage of.  Ethanol bended fuels also significantly reduce ultra-fine particulate matter in vehicle exhaust. This is particularly important for people who live in large urban areas with lots of auto traffic.

There are plenty of Retailers who are willing to sell E-15 ethanol fuel with its higher-octane rating of 88, and its lower price of 5 to 10 cents under regular E-10 unleaded fuel. There are also plenty of motorists who recognize a bargain when they see it and are glad to take advantage of the benefits of E-15 fuel.

Gasoline is composed of between 25% to 30% known Carcinogens like” Benzene that are used by Refiners for Octane. By using “No Ethanol Fuels” motorists are unknowingly exposing themselves to increased amounts of these carcinogens in their fuels.

Using ethanol blended fuels, like E-10 and E-15 will reduce the quantity of Carcinogens in your fuel and your exposure to them. Ethanol provides very significant, real benefits to the general public.  Way more benefits than the API and the Oil Industry are ever willing to admit, and this is very much to their discredit, and I think shows, they really don’t care about You, or Your Children or Your Grandchildren, if you have any.

Do yourself and family a favor, and don’t use “No Ethanol Fuels.” You may live longer with less probability of developing cancer. Benzene and the other Aromatic Hydrocarbons forms used by Refiners for Octane in our gasoline, are Really Bad Stuff!

[tomd 0]

It certainly looks like welfare. 

Trump is borrowing $18 billion probably from China, adding it to the national debt,and giving it away to people he hurt because a) he needs their votes; and b) he started a trade war--with China.  And it probably violates WTO regulations by subdsidizing commodity makers enganged in international commerce.

[Tomasz + 1,608]

US has a quite big  problem with russian and ukrainian wheat which is really booming in last decade. The real problem for them  is that they have a low cost of production = level thats is not profitable for US farmers.

This process that started about 2000 was accelerated by Maidan Revolution and food embargo= rather unwanted consequence for western farmers. Or maybe just a natural slow return to  a situation about 100 years ago before October Revolution when tsarist Russia was big if not biggest world food producer.

Edited July 27, 2018 by Tomasz

[Jan van Eck + 7,558]

In 2014 the Hryvnia  (Ukraine currency) was trading at ten Euro cents;  today it is trading at 3.2 Euro cents.  This collapse in Ukrainian currency will  (should) allow Ukrainian farmers to capture larger shares of the Euro market for grains, except that there is this intricate web of price supports, tariffs and especially quotas in the agricultural sectors in Europe.  French and German farmers have been a carefully protected sector for centuries, and that takes real wealth out of the pockets of French and German citizens and hands it to a small number of farmers.  Whenever Paris attempts to restructure the farm segment, the farmers get in their tractors and go plug up the streets of Paris; those guys love demonstrations.  The result is perverse:  the really low-cost producers in Ukraine end up with closed doors. 

I am very much in favor of open grain markets, it will benefit Ukraine, and Ukraine badly needs cash inflows from exports to lift itself out from economic stagnation, and Europe is very much better off if there is a vibrant Ukraine on its Southern flank.  Given that dramatic currency devaluation, both farm and industrial goods should be huge sellers, yet important export goods such as jet engines  (from Motor Sich) and large aircraft (from Antonov) are not selling in the volumes you would expect.  I put that down to poor sales efforts; what those industrial companies need to do is hire second-generation Westerners, those who are fluent in English, French, German, Spanish, and also speak fluent Ukrainian.  Train those guys and turn them loose and watch the industrial goods sales take off.  (Man, I really love those giant Antonovs! Just magnificent!)

[BillKidd + 139]

Regarding farm subsidies, yep, it has been a 'way of life' for decades. But I will add that there has been a backlash against farm subsidies prior to this trump thing. Farmers used to get "allotment" subsidies, paid to NOT plant a certain crop. It amounted to large sums of money for certain farmers and with the rise of the internet, these payments became known to vast numbers of citizens due to them being published and then you have the viral effect of "news." And it is my understanding that they canned those allotment payments, they are gone. I do have some knowledge of this, my dad was a farmer and my brother and I have kept up with the plight of the family farm all of our lives. But it's all a can of worms, I tell ya. The government has played a big part in the business of being an American farmer for my entire life. Without a doubt, the number of family farms has plummeted, a graph of such is very eye-opening. I became friends with a guy recently who is manager of a farm corporation that recently came into our area and bought up some land... they farm 93,000 acres! (In three states.) The average farm when I was a child was probably a couple hundred, lol!

Edited July 30, 2018 by BillKidd

[mauricesheiner 0]

POTUS is in the process of negotiating.

Be patient, negotiating at this level takes time.

 

[Jo Mack + 43]

I'd like to see what China is going to do this fall.  Brazil's soybean season is ending and China has to feed millions of pigs for a billion people.  I believe we'll hear China's "come hither" to US farmers since it will have little choice.  

[mcambl61 + 20]

On 7/25/2018 at 8:09 PM, Nigerian Price said:

it is becoming clear to me why Trump's life has been a series of bankruptcies.

The measure is a temporary one to ease the transitions to a better trade deal. why is that a bad thing other than you do not like the guy, what would you do? any ideas???

[mcambl61 + 20]

On 7/27/2018 at 8:50 PM, tomd said:

It certainly looks like welfare. 

Trump is borrowing $18 billion probably from China, adding it to the national debt,and giving it away to people he hurt because a) he needs their votes; and b) he started a trade war--with China.  And it probably violates WTO regulations by subdsidizing commodity makers enganged in international commerce.

so, we should just let China abuse the WTO and keep on like we were, because that was working really well wasn't it?