I am not following.......

[Mizzou_Tiger]

"In this statement you seem to think that the value added consumer items should have less mark up than the base commodity.  That is a total communist thought!  The communists believe that the lowest person on the totem pole has the same value as the person at the top."

I do not follow your statement..........if the lowest and highest have the same value then margins would not compress........I am suggesting they have some, but not to destruction levels compared to TODAY prices..........and take 10% off corn and we are at very manageable margins especially with cost averaging.........

That statement was to bring forward the idea that with current grain price levels we are not experiencing much if any demand rationing, and with the situation that is coming forward, we need to be...........or intervention will take place.........

I want the markets to work and be left alone, I am simply saying they need to work harder to compensate for what supply short falls we have coming that no one wants to admit yet.............intervention from the government will be the closest thing to your "communist thought" in all of this..........

As for supply and demand............I will challenge you this, I have put this out there on the other board too, more than once...........

This is the first time in modern history that we have 3-4 major crops with supply issues all bidding for the same acres and we can not produce our way out of this in one year.............in all other instances of grain tightness and price run-ups we were able to rob Peter to pay Paul with acres...........just slide some acres from one to the other...............WE CAN NOT do that THIS YEAR and its looking like 2012 is in the same boat unless the powers that be get involved...............this is not 2008 (IMO that was all air anyway, but it happened), and supply and demand are finally coming into focus............while we will have periods of up and down, every year that passes will only bring this new era of food production into focus............we have likely put a very hard floor in on corn around $5.25-$5.50 and major support in the $6.10-$6.20 range...............its a very different ballgame now...........JMO

[jrsiajdranch]

Mizzou, After I typed that I thought about it some more. IT is a communist statement however I am in no way calling you a communist. I don't want to dengrate into a name calling thread. I think that your points just show that depending on which side of the fence you are on you determine what market manipulation is.

As to your demand destruction statement. I would challenge you to tell me where there hasn't been demand destruction? Livestock is off almost 1.5 billion from it's highest year usage. How much more demand destruction do we need?  With etho moving to the hgihetst user status. They have no apparent demand elasticity either. WHy? Cause theya re not subject to the same market forces that other endusers of grain are. Therefore they have at best a different market signal and in truth a market distorting demand picture.  Ethol can pass on it's costs as long as oil stays high. So ethol profit margin is very limitedly tied to the cost and more so tied to it's replacement. SO the corn market is only an indicator of the biggest users margin. all others are therby secondayr in the market dynamics. WE cannot compete with that tyoe of market skew!

SO in the end the food guys get beat up till the masses starve. When starvation is a real possibility than the price of gas will no longer be the driving price in the corn market. However at that time you cannot put that horse back in the barn.

All you are left with is a big steamy pile of horse apples at that time!

[kraft-t]

I would deny grain to Budweiser and Jack Daniels first. We shouldn't be using food products to produce controlled substances or mind altering drugs. Besides think of all the gas it would save when people didn't drive to the pubs.

The livestock industry wasn't too interested in keeping us in business with $1.80 corn.BTW cargill could redirect some of its grain from food products to lifestock producers if your that serious about keeping livestock people in  business.

[animalfeeder]

O.K. I was not going to get involved in this discussion but I feel I have no choice. I am a poultry grower in Michigan and yes I do buy corn to feed. I have to commend jr he gets it. Kraft you say the livestck guys were not interested in keeping you in  business at 1.80 corn. Why should we worry about you, you guys have had gov,t checks for years to grow a crop so don't try to get us to feel sorry for you. We are scared to death right know as to how high corn prices are going to go. For the first time I wonder if I can make it through the year. When times get tough for me I don't have the gov't to go to to get a handout. You can take pp because the ground is to wet, you get a check if it gets planted and dos'nt produce. You guys at least get something.I would like to see you get nothing when it dos't pay and see how load you screem. If corn gets so high that I can't afford to feed it and have to shut down what are my choices---NOTHING. I personally would like to see every ethanol plant rot in hell. The only reason we are where we are at with corn is gov't intervention i.e. ethanol subbsidie oh yea another handout  for you corn growers.

[Mizzou_Tiger]

Livestock guys are obviously having to sharpen their pencil right now...........but you can not forget that grain producers have done that for many years too..........while the last several years have looked different, there have been several decades of cheap food policy that essentially kept grain prices at or below cost of production.......

There have been many chances to lock in old crop with a $5 and $6............and even more chances to lock in new crop at those levels...........remember $4 corn was not that long ago.............I guess some saw this coming and it shouldn't have been a surprise after the October report.............November gave many a chance to buy..........

Insurance and ethanol are two seperate issues with more twist and turns than this post has time for..........

[jrsiajdranch]

Ya know kraft I don't drink so I do not care about the alchohol industry. However your insesent drowning on about back when I was raisng corn for 1.80 is getting pretty pold.

First off you also got a gov. check to make up for it. And second you also got to feed some of that corn to your own hogs. Seems to me you benefited more than I from Cheap corn!

[jrsiajdranch]

Mizzou good discussion. this is a generic statement not intended at you just jumpoing off your post to point out something.

I would have bought all my corn last fall except I have used up most of my equity and all of my credit line just keeping my head above water the last two years!  This stupid montra of you had a chance is getting real old! When your credit line is maxed out how you gonna go buy up the bargains?  Using that logic you should have bought all the Land in you county about 10 years ago.

Yea Cargill and the ethol plants had the chance but guess what they bought up. The family farming livestock guy can't just go and borrow like the big guys do.  Also if you are also buying hay along with all the other things how you gonna decide which to put your money into? ( I am not buying hay)

The point is that yea we have a nation wide crop supply event. When do we wake up and see that to be proactive is far better than the wait and see approach?  The market isn't gonna straighten out policy blunders. Until there are such severe problems the correction is a outright slaughter.

Done ranting. Gonna try to chop hay now.

[jrsiajdranch]

Animal feeder welcome on board.  ALways glad to hear from a michigander!