Inflation in Agriculture

By Tom Karr, OCA President

How much is the freezer beef that you are selling this year? What are your bred heifers, breeding age bulls, and feeder calves worth? Are they worth more than the price you received last year? Of course, they are!!!

Is the cost of your inputs higher: gasoline, diesel, mortgage interest, car and truck payments, all are still increasing? Of course, they are!!!

Unless you are one of the unidentified flying objects that we are seeing now on a regular basis, and living on another planet, inflation is eating away at our already thin margins. But as far as I know, none of them are dues paying members of OCA and won’t see this article.

OCA Directors

Shane Riley Director At-Large

Washington C.H. • Term expires 2023 740-572-2044, shane.rileywch@gmail.com

Jim Rogers Director At-Large

Logan • Term expires 2023 740-591-7311, jrogers@reedbaur.com

Frank Phelps Director At-Large

Belle Center • Term expires 2025 937-539-1442, frankph@watchtv.net

Jaymes Maciejewski District 1

New Bavaria • Term expires 2023 309-222-0850, jaymes.maciejewski@gmail.com

Andy Lohr District 2

Bucyrus • Term expires 2024 419-569-3613, andylohr61@gmail.com

John Ferguson District 3

Chardon • Term expires 2025

440-478-0782, john@fergusonshowcattle.com

Mark Goecke District 4

Spencerville • Term expires 2023 419-233-3101, goeckefarms@gmail.com

Jason Dagger District 5

Cable• Term expires 2024 937-604-8820, jason.dagger@rwe.com

Kirsten Nickles District 6

Wooster • Term expires 2025 330-345-0477, KNickles@certifiedangusbeef.com

Brad Thornburg District 7

Barnesville • Term expires 2023 740-310-9196, thornburgcattle@yahoo.com

Linde Sutherly District 8

New Carlisle • Term expires 2024 937-875-0670, linde@lindeslivestockphotos.com

Jim Jepsen District 9

Amanda • Term expires 2025 614-560-5919, jepsen.drfarms@gmail.com

Sarah Ison District 10

Moscow • Term expires 2023 513-314-5382, sarah.ison01@gmail.com

Lindsey Hall District 11

Hillsboro • Term expires 2024 937-763-8115, lindseycgrimes@gmail.com

Dale Taylor • District 12

Bidwell • Term expires 2025

740-709-6461,daletaylorfarming@gmail.com

Money is just another commodity, no different than oil, pork bellies, corn, soybeans, or beef. So, the value of money, just like other commodities, will rise or fall, depending on supply and demand. But because money is, by definition, the one commodity that is universally accepted in exchange for every other commodity, we have a special term for the fall in the price or value of money; we call it inflation. As the price of money falls, the price of every other commodity must go up.

What causes the price of money to fall? The answer is very simple. An increase in the volume or supply of money relative to other goods and services. During and after the pandemic, our Federal government decided to “jump start” our economy by printing enormous amounts of paper money, not real money, because it had no backing. So much newly printed paper money, that we still have approximately 10-12 million able bodied adult males between the age of 18 to 55, that have chosen not to return to the workforce. Have you seen any “help wanted” signs where you travel? They are everywhere.

The freshly printed new money was not free to those of us still working. We are paying for it by the fast and furious rate of inflation that it caused, and we haven’t learned anything as we continue to print more money as just last week’s “Debt Ceiling” legislation passed. It was packed full of special interest “pork” which will continue to fuel the inflation fire. Then we still have the “Build Back Better Bill” plan lurking in the background. It is our next printed money debacle, that could add at least $5 trillion to our national debt over the next decade. So, hang on for the rest of the show, “you ain’t seen nothing yet.”

Yes, the beef industry was included in the money printing scheme, but we are still working, never stopped producing a product, and feeding the world. That doesn’t make it fiscally prudent, but better than the drones referenced above, that don’t need or want a job, yet.

There has been great debate as to where we are headed in curbing this inflation. The Feds will probably continue raising interest rates to slow inflation, but they were slow to react initially, and thus deferred the inevitable results. But we avoided the normal result of prolonged inflation, which is recession. We kindasorta avoided recession, we changed the definition from two consecutive quarters of decline to three quarters!! Brilliant minds at work!!! Who could have thought that up?

Ok, ok enough of this rant. This all started with how you are pricing your freezer beef. I have heard quite a range from $2.25/lb. hanging weight to $3.50/lb. Don’t underestimate what your cost is today. It’s higher than last year and probably lower than tomorrow.

Thank You, Insidiously, Tom Karr