Glad I’m Not Farming Anymore

I really liked farming, but I’m rather glad I’m out of the business these days, especially when I see headlines like this one over at agweb.com:

Betting the Farm and Losing: Banks Seek Collateral as Debts Rise

The financial situation for a lot of farmers is pretty stressful right now. Farm income is down 42% from what it was in 2013, farm land prices are dropping and they’re predicting land prices could drop 20% or more over the next couple of years. Corn prices are less than half what they were in 2012, cattle and hog prices are down 38%. Corn and soybean inventories are going to be at the highest level in something like 30 years. The University of Illinois says many farmers in the state are going to be losing about $28 an acre on their corn, and while soybeans are still profitable, they’ll be lucky if they make $67 an acre this year compared to $229 back in 2010.

The situation isn’t good when you look at the financial data. The Federal Reserve Bank of Kansas City is reporting a decline in the financial health of farmers. They have less working capital, are having to resort to taking out loans just to meet operating expenses. In the Midwest banks are reporting that about 22% of farmers will have a negative cash flow for 2016.

As usual the farmers who are getting hit the worst are the young ones who are just starting out or have only been in business a few years. They don’t have the land base or the credit history to get enough capital to buy equipment or to even continue operating.

Farming is a difficult business at the best of times. And it operates under financial conditions that pretty much no other business faces. How many companies would invest huge amounts of money in infrastructure, equipment, land, buildings, labor, etc. when they have absolutely no idea what their product will sell for when it finally gets to market?

That’s the situation farmers face. Farming is a long term proposition. You invest hundreds of thousands of dollars in tractors, combines, planters. You spend tens of thousands of dollars on seed. You invest huge amounts of money buying or renting land. Invest tens of thousands of dollars in labor to plant and tend to a crop.

And you have absolutely no idea what that crop is going to sell for because you have no control over the markets. You could have a boom year like we had a few years ago when the drought drove commodity prices up through the roof, or you could lose your shirt because prices on the commodities markets fell. You can make predictions, run models, listen to the experts, make educated guesses. But in the long run you’re depending on a market that has so many variables; weather, political climate, disease…

I miss farming, but I am glad I’m not doing it any more.

The Future of Tumblr

You may not be aware of it, but I’ve had a blog over at Tumblr for years now, and I’m far more active over there than I am here for a variety of reasons. But that is probably going to be changing in the near future.

Tumblr was bought up by Yahoo a while back, and they have not exactly been kind to their new toy. They’ve made a number of questionable decisions that have seriously annoyed many of it’s long time users. Advertising has become far more intrusive, paid, commercial blogs are being injected into our feeds over there. They’ve tampered with the user interface, adding features that no one seems to want, while removing features that people liked.

A few months ago they removed the “Reply” function, replacing it with some kind of messaging function so you can send a message to the author of the blog, but not make a public comment. They really hyped up the message function. And hype was exactly what it was. We always could send messages to the author of a blog if we wished to. It was already part of the system. All their “new” version did was add an icon to the bottom of each post to make it easier to do.

Meanwhile, the Reply function, which was widely used and widely liked, was eliminated, causing such a storm of protest that they’ve been promising to bring it back RSN (Real Soon Now).

The biggest problem with Tumblr, though, is it’s parent company, Yahoo. Yahoo hasn’t had a very good track record. It’s been losing money for years. It’s only really profitable venture is Alibaba, and there is ever increasing pressure on the company to reorganize itself, shed it’s unprofitable ventures and try to become something it hasn’t been in a long, long time, a profitable business. It’s CEO is under fire constantly, with increasing pressure to either resign, or attempts to force the board of directors to fire her. There is even pressure now from some of the bigger stockholders to fire the entire board. And to be perfectly honest, there seems to be considerable justification for both of those actions.

Shortly after buying Tumblr, Yahoo announced some sweeping changes. There would be new terms of service which would regulate what content could be posted to try to eliminate ‘offensive’ material in an effort to make the service more attractive to advertisers. Censorship/filtering software to weed out ‘unsuitable’ content would be installed. Advertising would be injected into people’s dashboards. Paid blogs would be injected into people’s dashboards. Etc. etc. etc…

There was such an enormous outrage over these new policies that they were forced to back off. While the injection of advertising into the service did take place, they backed off on the threats of censorship and other types of content restrictions. I won’t go into all of the other attempts they’ve made to “improve” the service that have irritated and alienated it’s users. While they’ve backed off on some of the more potentially destructive changes they wanted to make, they’ve continued to do things that have irritated it’s users.

But to return to Yahoo and it’s problems…

Right now Yahoo has announced it’s drastically cutting staff, firing people left and right. It’s trying to either sell off or spin off different units of the company in order to shed it’s unprofitable ventures. One of the ideas the CEO put forward was that they’d spin off everything except Alibaba. Basically Yahoo would become Alibaba, and everything else would be dumped into a company that would immediately go bankrupt because all of Yahoo’s less than successful ventures would be rolled up into that new business.

That plan got shot down. Now they’re trying to sell off various parts of the business. If they can find buyers for the stuff. In any case, the handwriting is on the wall. Yahoo, as it is known today, is not going to exist for much longer. 

What’s going to happen to Tumblr? I have no idea. Tumblr isn’t all that profitable, to be honest. It’s difficult, if not impossible, to monetize it to the extent they would like because doing so would drive away the people who create the content that draws viewers to the site in the first place, as Yahoo quickly discovered when it took over the service.

I think it’s highly likely that Tumblr will not remain the property of Yahoo for much longer. Whether they sell the service or spin it off into an independent company is something I don’t know. (Frankly, from what I’ve been reading in the financial press, I don’t think anyone at Yahoo knows what the hell they’re doing.)

My dissatisfaction with what’s going on at Tumblr and the uncertainty about the future of the service means I’m going to try to move more content over to grouchyfarmer.com in the future. Over here I don’t have to worry about injected advertising, dealing with the ridiculous way they keep changing the user interface, etc.