[Sca-cooks] Current farm prices and affects on feast budgeting
t.d.decker at worldnet.att.net
Sat Feb 16 11:37:27 PST 2008
> One of the most devestating price indicators for grains and dairy products
> seems to have been that it is a commodity traded publicly in the markets.
> Prices wander up and down periodically (over a couple weeks or months)
> simply due to trading trends. Sure, there are marketplace pressures like
> Cariadoc and Bear have menitoned. Take a look at the commodity trading
> prices for wheat and block cheese for the last 5 months, and you will see
> lots of plain old trading fluxuations based on just the fact that people
> buying and selling futures contracts.
> niccolo difrancesco
Commodity speculation doesn't usually whipsaw major corporations which
purchase large lot futures well in advance for use as raw materials. They
want delivery of the commodity not a paper trade. What has happened is a
more about a thirty year trend of declining increases in crop yields and a
steadily growing population. There is a rough equilibrium, but with some
widespread crop problems, actual yields drop in relation to the populations
they feed, so prices jump.
The U.S. government used a commodity reserve system to control prices, being
the buyer of last resort in bad times and selling reserves when prices
started to go to high. Curiously, the system turned the Treasury a small
profit. Some of the members of this list will remember the government
giving away commodity cheese because it couldn't be stored as the grain and
legumes could. Much of the system was discarded a number of years ago in
favor of direct subsidy payments to take acreage out of service, I suspect
as a political ideological decision based on the fact that we had seen
marked increases in yields from the same acreage in many years. Of course,
when the increase in yields slowed, the situation was ignored.
If anyone is interested in the current situation, an article in The
Economist from a couple months ago covers most of the basic issues and
More information about the Sca-cooks