China devalues, Stops Agriculture imports

[Mr._Graybeard]

I've noticed wild-caught Patagonian shrimp showing up in the grocery stores. They're big and tasty but seem kind of beaten up.

 

[folivier]

Gulf shrimp? WHICH gulf?
Here in south Louisiana they better be from the Gulf of Mexico, northern central gulf that is. Otherwise they're NOT what we consider fresh. And there is a huge difference between fresh and "previously frozen".
BTW here in Alaska for the summer and bought 18 frozen "fresh" shrimp for $28.
Wow! we pay about $4/pound for same size back home.

 

[gerntz]

Many North American companies that sell products in China have to agree to build their products there. Buick and Volkswagen come to mind. So they don't actually import.

Didn't know VW moved to NA. Thanks.

 

[GravitySucks]

The FI part of FIRE means I don't have to eat at Red Lobster.

Wild Gulf shrimp have a flavor and texture farm raised can't touch.

Confounding farming soy and corn with pineapples is very misleading. Soy and corn are the basis for most of the modern worlds diet. A market thousands of times larger than a specialty fruit market.

You can buy gulf shrimp, they are the best. Go to Red Lobster, see if they sell Gulf Shrimp...

 

[Mr._Graybeard]

Didn't know VW moved to NA. Thanks.

Oops, I was gonna say Joy Global, but they have turned into Komatsu (but still headquartered in Wisconsin). Then I second-guessed myself and messed up. Of course Volkswagen is based in Wolfsburg, Germany.

 

[unclemick]

Thoughts on the farm economy? Not much said recently about the Chinese switch from the US to Brazil on soy beans among other commodities. The seasonal market is a moving proposition, and not just resolved by temporary storage.

So far, the national news is discussing the DOW, NASDAQ, and S&P. Whatever happens in the coming days, the longer term effects will come from individual stocks, and the place in the world economy. Were I in the market, my time would be spent in understanding the most volatile stocks. Going with the flow, would be last on my list.

When the dust initially settles, a look a the individual rates that exceed the standard deviation as a guideline.

Hand grenade and horse shoe wise - the average age of the American farmer is/is going north of 60, over 50% of American farms may change hands in the next 15 years, and over 80% filing Schedule F (farming) filed are less than $15,000.

So add in China, upper Missouri flooding this year and glycophosphate (no till) lawsuits - we are in for 'interesting times' as the old Chinese proverb says.

heh heh heh - Still full auto - Target Retirement has me(in 'old' age) down to 50/50 with re balancing. 25 years of ER and staying the course. Was pretty much 60/40 from 1966 to 2006.

P.S. Mailbox Shopper' at the farm yesterday - $ 15 for the Tractor Pull and I don't remember $ for the Demolition Derby at 103rd Northwest Missouri State Fair in Bethany.

 

[gerntz]

Did the markets drop earlier this week?

 

[aja8888]

Didn't know VW moved to NA. Thanks.

VW built a big assembly plant in Chattanooga, TN several years ago. They also have a couple of plants in Mexico.

 

[Popeye]

The FI part of FIRE means I don't have to eat at Red Lobster.

Wild Gulf shrimp have a flavor and texture farm raised can't touch.

Confounding farming soy and corn with pineapples is very misleading. Soy and corn are the basis for most of the modern worlds diet. A market thousands of times larger than a specialty fruit market.

Back in the 90’s we had a batch of visitors at megacorp from China. They had our equipment and were here to checkout an important repair job we were performing for them. First night they went to Red Lobster for dinner since it was right by their hotel. They loved it so much they wanted to eat there every night! We offered much better options but they loved the Red Lobster!

Fast forward 20 years and the business from China went to almost zero. They buy o-rings and gaskets. They figured out how to do all the parts themselves. That’s what the companies moving there may find. They copy the tech and then you get nothing.

 

[copyright1997reloaded]

Back in the 90’s we had a batch of visitors at megacorp from China. They had our equipment and were here to checkout an important repair job we were performing for them. First night they went to Red Lobster for dinner since it was right by their hotel. They loved it so much they wanted to eat there every night! We offered much better options but they loved the Red Lobster!

Fast forward 20 years and the business from China went to almost zero. They buy o-rings and gaskets. They figured out how to do all the parts themselves. That’s what the companies moving there may find. They copy the tech and then you get nothing.

Yes, this happens in spades. To do business in China typically requires technology sharing agreements which are then used to copycat the technology. Another game played is to use the US court system to dislodge secrets. Here's how it works: The foreign company sues the US company in US court. Part of that process requires disclosure of the technology in question. The foreign company loses the suit, but doesn't really care as they now have information on the technology in question, produce it at home. The US company is out of luck because they can't sue the foreigner in their home country.

 

[NW-Bound]

Did the markets drop earlier this week?

It surely did, and wiped out all of the covered call options I sold earlier. Yes, all of them. I have been buying them back for pennies or a dime on the dollar, even though I did not have to.

They are going to expire worthless next Friday, but I buy them back to free up my stocks, so that I can sell new options on them if the opportunity arises.

 

[zippy2020]

The US farms sell soybeans to Brazil. The Brazilian's sell soybeans to China. Problem solved.

Not sure if you were just being flippant? Won't work that way. The Brazilians are simply burning more Amazon forestland and planting soybeans. No need to buy anything from the US with scarce Brazilian cash.

 

[audreyh1]

Eek!!! Well gee, here we go again, folks.

Oh well, it's been nice.

That said, just six months ago the Dow was hundreds of points lower than it is now.

I would like to tweak MichaelB's cowbell response just slightly, because I think the perfect response for today is "More BLUEBELL!" Plus I plan to watch, wait, and do nothing. I'll diet later (yet again). Here is what you gotta get:

Love it! - More BlueBell!!!

Unfortunately, ice cream is off limits for me right now. If I found some with no sugar added I could eat it......

P.S. Tired of the news driven volatile markets and have pretty much ignored them.

 

[Caskem]

more cowbell?

i got a fever!

 

[copyright1997reloaded]

Not sure if you were just being flippant? Won't work that way. The Brazilians are simply burning more Amazon forestland and planting soybeans. No need to buy anything from the US with scarce Brazilian cash.

Not at all. Whether it is better to burn forestland and plant and grow soybeans vs. import from USA and relabel the shipments to send to China is simply a question of prices of the import vs. grow your own.

It doesn't even require (much) scarce (as you put it) Brazilian cash, the only financing required is enough to do the float (i.e. when the US producer must be paid vs when the Chinese buyer pays - both in US $).

You say it won't work that way, my degree in Economics says it will. It might take a while, but arbitrage opportunities are usually fulfilled.

 

[karen1972]

well if fields in the midwest are any indication, China not buying won't be a problem, I've never seen so many unplanted fields in my life, it was really scary how many didn't get their crops in because of unusually wet spring.

The other interesting thing about corn and such for me is just how many non-food products they are making out of it. I just got a delivery from one of those "ugly fruit" deliveries which pack in styrfoam and ice bags so they can delivery on hot days.. well surprise to me that styrofoam slips out of the recyclable plastic sleeve and melts in water because its actually corn based.. now thats a cool use of corn.

Thats the thing, there are so many moving parts. Heck where we live the primary driver for land is places to put manure, so who cares what you plant on it, with the regulations of how much you can spread per acres, the mega farms are buying ever spare acre they can just to spread cow manure.. what use to be $3K/acre is now running $10k/acr and you aren't making that up by selling soy or corn. Farming is expensive, kind of surprised most farmers are still in business. Still trying to get my mom convinced to sell the farmette as I worry the bottom will fall out when she most needs that money for nursing home care.

 

[skipro33]

well if fields in the midwest are any indication, China not buying won't be a problem, I've never seen so many unplanted fields in my life, it was really scary how many didn't get their crops in because of unusually wet spring.

I have family in Illinois that get paid NOT to plant corn by the government in order to keep prices high enough for the rest of 'em to make a living at it.

The other interesting thing about corn and such for me is just how many non-food products they are making out of it. I just got a delivery from one of those "ugly fruit" deliveries which pack in styrfoam and ice bags so they can delivery on hot days.. well surprise to me that styrofoam slips out of the recyclable plastic sleeve and melts in water because its actually corn based.. now thats a cool use of corn.

If you coat it with cheese dust, it's Chetos Corn Puffs! I sometimes get deliveries with the puffs and feed them to my dogs. They make them out of rice starch too.

 

[karen1972]

I have family in Illinois that get paid NOT to plant corn by the government in order to keep prices high enough for the rest of 'em to make a living at it.

I wasn't aware that program was still in existence. It was very common place in my childhood. The fields I saw not planted, had made attempts to plant, they are falling under crop insurance claims. Either way it kills me to see fields not at least covered in cover crops, its just so bad environmentally and for the soil itself... its not the way I was taught to farm.

 

[skipro33]

I wasn't aware that program was still in existence. It was very common place in my childhood. The fields I saw not planted, had made attempts to plant, they are falling under crop insurance claims. Either way it kills me to see fields not at least covered in cover crops, its just so bad environmentally and for the soil itself... its not the way I was taught to farm.

Their farm was designated 'commodity' based, not rotational. Lots of stuff comes into play when determining the 'base' for payment. If they decided to rotate crops, they wouldn't get the payment for not growing their commodity. Actually, I think they rented out the land for the commodity and raised chickens for their own living expenses, but I'm not sure on how that all worked. The chickens weren't considered a crop I guess...

 

[Koolau]

well if fields in the midwest are any indication, China not buying won't be a problem, I've never seen so many unplanted fields in my life, it was really scary how many didn't get their crops in because of unusually wet spring.

<SNIP>

I arrived in the midwest during the end of this spring's monsoon. I watched with anticipation as farmers waited for fields to dry enough to plant corn - many to give up and hope to plant soy beans instead. Still, there are several fields fallow due to the spring rains. Neither corn nor soy beans could be planted because of the wet fields. Corn and beans that were planted look quite small compared to past years. I hope they reach maturity in time for harvest. Ironically, it's been a relatively dry summer. Go figure.

With all the issues with the Chinese not buying soy beans from "us" it may still be the last laugh for the farmers. If soy beans are in shortage in the fall harvest, world prices could sky rocket and give those farmers with crops a windfall. Others, (most) probably have crop insurance - let's hope. In any case, YMMV.