Van Trump Report
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Last week, I presented some free Van Trump report information. Here’s a quick summary. Van Trump thinks interest rates, and the US Dollar will decline which should eventually help US commodity exports. Stock market: short-term unsteady, long-term Van Trump is bullish. On inflation, as energy production increases, expect both fuel prices and inflation to decline. Fuel and freight costs are around 25% of most cost of goods.
Van Trump offered some insight on the Generation Z. Most like to travel, like really good healthy food and they are willing to pay for it. Many do not want to buy a house and would rather rent to be free to travel. They tend to want the best of everything now, so many are broke. They like to work from home and do not want to physically go to work but overall; their job satisfaction tends to be low. They are not learning from their co-workers. That hurts productivity.
Van Trump expects that very soon artificial intelligence (AI) will take over many mundane jobs that are repetitive. Future job skills needed will require creativity, problem solving, personal service. For our youth, the change is going to be faster and greater than the change from horses to tractors, calculators to computers, etc. To prepare youth and all of us; be flexible to change, be good at basic educational skills (reading, math, science, writing), and be mentally nimble. The same applies to farming. Generally, its not the largest, the wealthiest, or the smartest that survive change. It’s those that are the most flexible, willing to change, and the quickest to see what is coming and act on it before everyone else.
On AI, it is going to require huge increases in energy especially electricity to power the AI. Farmers have trillions of data points that can be measured in each field. In a few years, the weather may not be as much of a mystery with a 50% chance of being wrong. More weather data that is optimally analyzed will figure out unknown trends for better weather predictions. That will require a lot data and computer power. Another example, medicine; especially cures for diseases and cancer, will benefit from more data.
On robots, expect smaller tractors, mini planters, and a lot more drones. Robotic self-propelled planters and harvesters are already being used. Smaller equipment will reduce soil compaction and allow more timely planting, spraying, and harvesting. If all this sounds crazy, Van Trump says, just realize that the agricultural business is one of constant change and crisis followed by short bursts of intense success. You have to be ready for the change.
Van Trump related an important statistic on farm estate planning and survival. The first (1st) generation are the Founders or pioneers. They have a great struggle and many do not survive. The second (2nd) generation, only about 30% survive to take over the farm. Many see how hard their parents struggled and do not want any part of it. The third generation (3rd) often did not see their grandparents struggles, and do not maybe appreciate their sacrifices. Only about 12% survive. By the fourth generation (4th), the farm may be well established but often the youngest generation may not be allowed to make as many decisions, so only about 3% survive. The moral: it’s the climb and the struggle to survive that keeps farms healthy, able to change, and to adapt to that change. If you want your farm to succeed long-term over many generations; let your children participate, take over early, and make some mistakes. When they are older; they have the wisdom, skills, and confidence to keep going.
Emily French, another national economist, was much more bearish on agriculture. She offered a few thoughts on South America (SA) weather. Farmers should always sell on the rumor of a SA drought, and if you need to buy corn and soybean meal, buy on the fact when it is verified. Over many years, South American droughts are predicted almost every year but SA gets lots of rain. Sometimes the rumor lasts hours, a few days, maybe a week; but after that the price can fall quite quickly.
Do not wait too long to sell your crop. Both Van Trump and Emily French advise farmers to contract ahead 30-40% of their crop before planting. Why? Because as eternal optimist, farmers tend to have a hard time selling when prices start rising. Usually they miss the high, and then they wait, and wait some more; until the price drops. They only sell when they absolutely need money or the spouse starts complaining. That’s usually close to the bottom of the market.