America’s Farmers Suffer Huge Losses in Wake of COVID-19

LE MARS, IOWA – “I should’ve just shot the pigs as they got off the truck. I wouldn’t have lost so much money…”

(More below.)

Exploring Rural America

Greetings from Le Mars, Iowa…

My family and I are on an epic road trip around America.

We’re camping out. So each day we drive a hundred miles or so, then at about 3 p.m., we look for a place to sleep.

When we find somewhere – often a city campground – we unpack our tent, cook dinner over a camping stove, brush our teeth in a public restroom, and then sleep under the stars.

People all over America are reading about our trip online and they’re writing to us and inviting us to camp with them. They let us camp in their driveways, backyards, barns, fields, etc.

We’ve been on the road for two months. Here’s the route we’ve taken so far…

As I write this message to you, we’re on a farm in one of the most productive agricultural regions of the world… the northwest corner of Iowa.

It’s one of the top regions in Iowa for producing pork, beef, chicken, milk, ice cream, eggs, and ethanol. Crop yields are so great here, the farmland commands some of the highest prices in the state.

We’ve baled hay. We’ve slaughtered chickens. We’ve watched a cow give birth. We’ve collected eggs from a chicken coop. We’ve met a mini pony. We’ve sat in the driver’s seat of a semi-truck. And we’ve shared a home-cooked feast in the farmhouse with a big farming family.

Here we are…

Scary Times in America’s Farmlands

Times are scary in America’s farmlands. Many meat-packing plants have become COVID-19 hotspots.

Workers aren’t showing up to work, and those that do must follow rules to prevent the spread of disease. These rules slow down the production line. So the meat packers can’t slaughter all the animals they’d normally be slaughtering.

A big backup has developed in the supply chains. (A similar thing happened with oil in March.)

Take hog farming, for example. It’s a “just-in-time” assembly line… where pigs move from the farrowing barn to the nursery to the finishing barn to the slaughterhouse.

“These are live critters, not boxes of tee shirts,” says our host, a lifelong hog farmer. “If the line gets backed up, even by a few days, someone’s going to lose hogs. So the industry has been euthanizing 160,000 hogs a day… about a third of the animals that make up the industry’s normal output.”

“We have friends who spent four months fattening hogs and then couldn’t give them away. ‘We should’ve just shot the pigs as they got off the truck,’ they told us.”

Some hog farmers have supply contracts with the meat-packing plants. In those cases, the meat packers have declared force majeure, reneged on the contracts, and refused to purchase the hogs they’d agreed to purchase.

It’s the same situation in the cattle business. “We’ve got a wall of cattle still to be processed,” says our host. “I don’t think the cattle business is going to be worth a damn for the next six months.”

– Tom Dyson

P.S. To those of you who have written to us, inviting us over: our absolute and sincerest thanks! I can’t respond personally to thank each of you, but Kate and I read and receive every one of your messages.

P.P.S. Here I am standing on historic Route 75, which crosses the breadth of America. At one point, it stretched 1,700 miles from Winnipeg, Manitoba in Canada, to the Gulf of Mexico at Galveston, Texas. They built it in 1917, but it was an important route for settlers and American Indians long before that…

Like what you’re reading? Send your thoughts to [email protected].

Concerns about the U.S. dollar and silver today, along with why Tom chose to use the Dow-to-Gold ratio for his financial decisions…

Reader question: Enjoying your postcards immensely and your travels through the real USA. If the Dow-to-Gold ratio gets in the “8” range and the Federal Reserve goes crazy, leading to a collapse of the USD before you are able to spring your trap, how are you going to provide for your family? Happy travels and be safe. I love what you are doing.

Tom’s response: If the dollar disappears (which I don’t expect for one moment), gold will become the hottest commodity on the planet and we’ll be rich. I don’t expect I’ll have any problem finding someone else to trade gold with me for whatever I need.

Reader question: If the market shoots up and you make a ton in your investments, say, over the next year or two, and then put that money (which may have doubled) into buying gold, why wouldn’t you do better that way than having very little in the market now and putting it all into gold?

This is something I just don’t understand about how to contextualize investing with the Dow-to-Gold ratio… Would you be kind enough to explain?

Thanks so much, and thanks for having the courage to share your inner journey (not just the outer one) and for writing your postcards. They’re always a fun read (from one writer to the next)! Stay well.

Tom’s response: Almost all our savings are in gold and silver. The only “investments” we have are in tanker stocks, and I only own those because I think they’re aligned with our gold trade. In other words, they’re uncorrelated to the general stock market and very cheap – while providing a little diversification.

[Editor’s Note: If you’re not a paid-up Tom’s Portfolio subscriber yet, find out how to get access to Tom’s full list of oil tanker stocks right here. As a Tom’s Portfolio subscriber, you’ll also get the 11 gold names Tom recommends to take advantage of his Dow-to-Gold trade…]

Reader question: Love your postcards. Quick question on gold vs. silver. On Aug 22, 2011, gold was at an all-time high of $1917, and silver reached its high on Apr 28, 2011 at $49.50. But gold and silver crashed shortly after, especially with silver. Then, after nine years of waiting, gold finally came back to $1800, but silver has been *languishing* at $18. What went wrong with silver?

Tom’s response: Gold and silver are not the same and shouldn’t be analyzed as such. (Although they do respond to the same forces, most of the time.)

The biggest difference is the price. Gold is 100x more expensive than silver and therefore silver has many more industrial applications than gold, but gold has more demand from billion dollar capital flows looking to escape the dollar. Therefore, they have different supply and demand curves.

Other readers suggest homeschool material…

Reader question: Tom, are you curating Dusty’s reading list? You said in your July 8 postcard, “Our son, Dusty, 12, loves and admires Teddy Roosevelt. He specifically asked us to take him to Mount Rushmore before we started this road trip.” Teddy Roosevelt helped mark the beginning of the Progressive Era in the U.S., and helped mark the end of free market competition and laissez-faire policy.

As part of his history/economics education, he should be reading Murray Rothbard’s Conceived in Liberty, and then followed by Rothbard’s The Progressive Era (available at Mises.org for free). It would be good for Dusty to understand who his heroes are and are not.

Tom’s response: Dusty’s admiration for Teddy Roosevelt is not based on his career as a politician, but on how he overcame his asthma as a child by ignoring the advice of his doctors and spending as much time as he could outside. Also, when Roosevelt was a kid, his father took him traveling for a year. This partly inspired us to take our kids traveling.

However, we have started to curate Dusty’s reading list. He’s only 12 and our first priority is to make sure our kids love reading. Currently, we’re reading a lot of great science fiction. But soon we will begin The Fountainhead by Ayn Rand and the Uncle Eric series by Richard Maybury. He’s a bit young for Rothbard still, but we’ll get there soon. Mostly, though, I’m just happy he’s showing such an interest in history…

Reader comment: Hey Tom, it was fun to listen to you talk about gold in that presentation you did – I listened out of curiosity because I already am fully invested (to the extent I want to be) in gold but was curious to hear you speak, and well worth it… you are well-spoken!

Please tell your son for me that Mt. Rushmore is an abomination – the face of no man should be carved onto or into a beautiful mountain, much less one that is held sacred by the people native to America!

And please tell ALL your kids to read up on the horrors of commercial hog farming – they will rue the day you took them there! Or maybe they already are because of the horrendous smell. Another abomination!

Tom’s response: We want our kids to know where food comes from in America, so we’ve been having lots of these conversations already. But “showing” is so much more powerful than “telling.” We want our kids to see things with their own eyes (age appropriate, of course). I passed on your message to him all the same.

And still, others continue to offer kind words to the Dyson family…

Reader comment: Your postcards have informed and entertained me for the entire endless vacation. I have read every one of them and saved them. Also. You might think about sending the hosts from your trip a copy of your book as thanks.

Reader comment: Greetings Dyson family. So great to see you visited our favorite place in Minnesota – Itasca State Park! The family photo you now have next to the Headwaters marker is iconic.

I am extremely happy and excited to know you visited one of the most beautiful destinations in Minnesota. You are clearly demonstrating if folks take the time to get unwrapped from all the chaos, life is good here in America. Have fun, Dyson kids!

Reader comment: 55 years ago this summer, my parents, older brother, and I stood right where you were at Lake Itasca. Your picture brought back many warm memories sadly long forgotten. The best memory, however, was my brother falling off those stones in the background into the lake. They are all gone now, but that was a wonderful summer!!! Thanks for the photo!!!

Tom’s response: Thanks for all the kind and thoughtful messages! As always, please keep sending us your questions and comments at [email protected].