Farmer Focus: My first ‘sheriff’s sale’ as inflation bites
© Kandace Griffin Inflation has been accelerating here recently and is starting to bite. The Biden administration has shifted from “there is no inflation” to “there is inflation but it’s temporary” to “there is inflation and it’s a good thing for wages”.
Of course, in the real world we aren’t all incompetent career politicians suffering from selective memories.
Some of this is obviously related to Covid-19 supply chain issues, but liberal easy money policy, exploding government debt, and insane social programmes should get a lot of blame.
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My wife is an accountant by training and really tracks this stuff. Our grocery bill is up 30% year on year, and we don’t buy meat.
The ranch side is biting even more. The price of steel pipe is up more than 75% on the year.
We have a simple corral that we need to build. It is cheaper to buy a 2.4m post and set it in a bag of expensive concrete than to buy a 3m post and set it further in the ground.
What was supposed to be a quick project is now going to cost close to US$15,000 (£11,000).
Going into winter, we are starting to look at feed values. Dried distillers’ grains from ethanol plants make up a big part of our winter rations, and they are nearly 30% dearer.
This would be OK if cattle prices were also up a lot, which is what you learn in basic economics classes, but Covid-19 has changed that formula, too.
Animal protein prices are beating inflation. But the packing industry realises it has no competition and doesn’t have to pay up for cattle if the other handful of competitors don’t. There is about $700 (£500) of profit to be made on an animal from birth to plate.
Packers are making $800-$1,000 (£580-£730), so yes, the cattle businesses are losing $300 (£220) an animal.
The consequences are not pretty. We had a sheriff’s sale in our community this week.
That means a local farmer – a great guy and a neighbour – was foreclosed on.
The bank took his place via a court order and the local sheriff sold it on the courthouse steps. I have never seen one before, but I wouldn’t be surprised if more are coming.