cancel
Showing results for 
Search instead for 
Did you mean: 
Honored Advisor

decline of commodity economics

The market today is a good example of how deteriating the economy is for production agriculture.  

Last night on the open for the third week in a row, after the weekend,  up significantly and remained up all night. Yet finished the day with big swings.  Wheat kc went from 8 up to 7 down for no factual reason.  The things that are wrecking wheat production are still in place and we are nearly guaranteed lower production on lower acres and poor conditions.

Soybeans were up 10+ all night and are now at +4 with a 16+ trading range on the day.......yet the local coop took increased basis protection so the producers will recieve the futures price - $ 1.20 instead of the -$ 1 we once had.  So today was a -$ 0.16 for the producers on a day that traded up all day.

It is indicative of where farming is in the general economy...... That Coop in many communities is the only choice for a market.  And as elcheapo has harped on....... but missed this part of it.....coop consolidations primarily mean less competition for input expenses and grain buyers, as well as less service for the individual producer.

There are fewer choices and less volatility in almost every imput expense category..... with the exception of chemicals that have generic production........ the result of monopoly economics.

 

Think about it ....today if you wanted to market soybeans the futures market gave you an opportunity to price  12 cents higher ....... yet when you got to the coop to contract those beans you only had the opportunity to sell at 8 cents lower.

It is criminal and something our federal regulators ignore.

I hope grain prices go up this year....as supplies fall "in truth".  And I hope "time" is wrong on the long term future of grain prices.  But it is the economics surrounding farming and lack of competition that dooms agriculture either way.

 

0 Kudos
11 Replies
Veteran Advisor

Re: decline of commodity economics

Bids - new Crop   Columbus Ne,  corn @  $3.71    -  Hwy east  US281- US 30 area -  Beans @ New Crop @  $ 9.45  -  $9.60  Range  close @  2/20/18  according to radio AG  News ?

0 Kudos
Senior Contributor

Re: decline of commodity economics

Would you sell corn for $1.10 over Chicago mar.  for 350 mile freight, if you would get a semi. We are running 3 on that haul 2 to 3 times a week.

0 Kudos
Veteran Contributor

Re: decline of commodity economics

Nitefarm, I would. Where do I need to haul it??
0 Kudos
Advisor

Re: decline of commodity economics

350mi freight? Could you elaborate s bit more. I’m not reading this right. 350$ for the freight or 350 miles at my rate 16c a bu per mile. Semi 900-1000bu per run Six Wheeler 500-600 bu per run. 1.10$ over chi- town.?.
0 Kudos
Advisor

Re: decline of commodity economics

I also completely agree with you SW. It is unbelievable how this market ( marketing system from source) is so broken. I have personally noticed this gradually getting worse for the last 10 years. Honestly at this rate just a matter of time.
0 Kudos
Veteran Advisor

Re: decline of commodity economics

'''''''  Consolidation  '''''''  rarely  has  a  connection with compassion, although I've been told it's oblivious to more of the same - consolidation --- Seems  Greed  is  Good  as  long  as  it's  parked  in  another's  back  yard - maybe ---

 

ALL posts  state great points ,  hint - follow  the  camPAIN  $$$$$ to your state capital & then to the beltway, and reflect what the discovery might display, someone once told me ? ?           

0 Kudos
Senior Contributor

Re: decline of commodity economics

My corn out of the bin at $1.10 over march Chicago, delivered 350 mi. south of western Ky ,at multiple locations. All I am saying is don't complain about the market until you have checked all you're potential markets.  

0 Kudos
Honored Advisor

Re: decline of commodity economics

great point nitefarm.

 

Our beans will go 250 miles for a 75 cent better market only because we can get good back haul rates that direction. (30 to 35 cents)  but then we gotta bin em and handle them and that is not free.  SSSoooo I understand your point.  There are a few costs that come with that distance if it is a farm truck that can easily eat up some of that meager gain.

 

But I gotta ask..... If you knew going in that your only profitable market for a commodity was 350 miles away, would it affect your crop choices?

0 Kudos
Veteran Advisor

Re: decline of commodity economics

SW  - Interesting  point  -  backhaul  &  good   - interesting  kinfolk  ---     

0 Kudos