[Sca-cooks] Current farm prices and affects on feast budgeting

Terry Decker 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 
> are
> 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 



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