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College economics and the grain markets.
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95h
Posted 4/1/2010 11:13 (#1146021 - in reply to #1145557)
Subject: RE: economics-logic-etc,,, throw all that out the window..


Kittitas Co. Wa. State

It is a "cornerstone" of ag producers to always shoot for the highest yeild per acre.  And most importantly never never work together for the common goal of a fair price for the product produced.

Market prices would look completely different if there were only 10,000 producers. But there are 2 million Ag. producers and you will not find 100 of them willing to work toward a common pricing goal.

Every one of them think/believe,,, "well if I can shave $1.00 per acre off my input cost I can still make money if I sell it for $1.10 less per unit."

Here is another huge problem you hit on, "We depend on the USDA to give us a fair and unbiased report and to take all things into consideration when making that report. IMHO, some things are left out when they make these reports." 

The Market lives and dies with those USDA reports.  That is a huge percentage of what causes prices to go all over the board.  USDA reports are not designed for the Ag. Producers,, USDA reports are for the Market analyst's and Commodity markets to determine not what "is" currently,, but instead what "might be" or "should be" as in a future tense.   In short the Government looks over our shoulders makes us give them our production plans, etc.. then turns around and tells the Markets what we have.

Market prices would be exactly the same if every Ag. producer was legally liable to report their production figures, plans, amounts in storage, etc... directly to say,, the CBOT-etc..it would simply be a case of cutting out the "middleman" namely the USDA.

 

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