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Senior Contributor

The "flip" side of the 4% per month incline in usa food prices..

If the rest of 011 follows the uptrends of Jan, Feb, and March, usa will have 48% higher food prices by year end.

 

There is virtually no way to stop 3.8% to 7% monthly inclines thru July 1st.

 

There might be a way to "put a lid" on things later in the summer though.  ( perhaps be govt price mandated ).

The usa govt might start thinking mandates work ( it will for 012 votes ).

Supposed food crisis govt solved ( at least for awhile ).

Folks from the USA naive enough to believe the govt ), with the "e" example of course the latest supposed govt madated agri success example. 

 

Granted things like 8 to 10 corn, 15 wheat, 25 beans, protiens "to the moon also, " might seem nice for a while.

Price/prod mandates could take some getting used to for producers, if ever.

 

 

 

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Senior Advisor

Re: The "flip" side of the 4% per month incline in usa food prices..

When there is reckless pricing pressure on your domestic markets and consumer--the export market will soon loose it's luster as political pressure mounts from several fronts---restaurant -- grocery retail--etc.  

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Honored Advisor

Re: The "flip" side of the 4% per month incline in usa food prices..

It seems like as grain prices rise the inputs are sure to take a taste and bite to keep the cost of production inline with the average price, you need to sell above avg or you`ll go behind. Hopefully this Administration will have studied how the price controls of the 70`s flopped.  In a recent elevator newsletter it stated `more food will have to be produced in the next 50 yrs than was produced in the last 10,000 yrs combined just to keep up with world population`.  On the backside of my pickups sunvisor is taped the 'Fear, Hope,Greed,Worry` chart that so many gurus have gotten rich peddling marketing advice with.  Perhaps that model has worked in the past, if we have to produce more in the next 50 yrs, that marketing will lose you money. Seed has gotten too much credit with raising yeilds, Herman Warsaw raised unbelievable, unheard of yeilds 30 yrs ago.  IMO, Round-up seed was by far the main cause of high yields, keeping clean fields is the foundation, especially controlling foxtail that sucked up Nitrogen in fields.  That and farmers who didn`t want to "waste money on high priced fertilizer" on their 160/a farm, retired then a 4,000/a farmer rented it, tiled it, fertilized it and planted in April. When ethanol plants can make money at these prices and 9 cents of corn is in a $4 box of cereal, you ain`t seen nothin` yet.  That`s not to say prices go straight up, there might be 12 month periods when a Bull`s mettle is tested.  

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Senior Contributor

Re: The "flip" side of the 4% per month incline in usa food prices..

    If there ever is a government mandate on our pricing,time to fire the gov. Why was there no government mandate on cars,trucks,health care,houseing cost fuel,fert, and equipment makers. Every time we had price hikes in the past 40 years (at the ag level) packers,processors and grocery chains never lowered prices when the ag commodities went back down,and some times lower than the previous lows. Inflation is here,and we need our share of it,and its time the people might truly give thanks for some thing to eat.As far as future production to feed a hungry world,nothing promotes pruduction more than profitablity!

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Frequent Contributor

Re: The "flip" side of the 4% per month incline in usa food prices..

You all already know that the U.S. spends around 10% of income on food.  Was reading the other day that China spends around 45% of there's on food.  That is incredible.  Is that a sign of things to come for countries that haven't had the inflation bug hit yet.  Obviously ours won't get to that proportion, but where do you guys/gals think we will sit at for this percentage in another 5 years? 

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Senior Advisor

Re: The "flip" side of the 4% per month incline in usa food prices..

The US has had the lowest percentage cost of food of any country and that will continue. Most countries with low incomes spend a huge portion of income on food, usually as raw commodity or flour. That's why modest % price increases for food can be devastating.

 

We will continue to have low food costs. We are not directly following less developed food cost patterns even though real wages are declining, and have been for some time. The cost of raw corn, wheat and soy are not propelling significant food cost increases across the board. And price controls are not even on the horizon.

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Advisor

Re: The "flip" side of the 4% per month incline in usa food prices..

   These are unusual times.  History repeats itself but I think we are making new history right now.  So we really have no past events to judge what the forcoming events will be.  Buy land and equip. now before it goes higher?  Wait for prices to settle?   Contract grain at guaranteed profit or wait for more?   Take the middle of the road approach so you don't fall off the wagon either way?  What a dilemna!

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