In all fairness, the article doesn’t once mention how high fuel and fertilizer prices (astronomical!) impact the corn and soybean producers. And except for a mention on the flooding, the article is short on acknowlegment of the inherently risky business of farming because of many weather, pest, weed and disease factors, the latter three more prevenatable or treatable but again, at a cost.
That said, the higher prices obviously do help the corn and soybean producers. But another reason the market has been so high are speculators and investment funds trading in the commodities. Which the article doesn’t mention either.
December corn futures have fallen $1.37 since June 27. Ethanol is not to blame for high prices. Weather has been the largest contributing factor. Sometimes it doesn’t rain and you don’t harvest much. You have all of the expenses to pay for still. MAP fertilizer went from $200/ton to $1000/ton and Urea $160/ton to $700/ton.
I don't buy this argument about grains or oil. Speculators NEVER take physical delivery. Eventually every contract is delivered from an actual producer to an actual consumer. Speculators add liquidity between the two. For every contract bought by a speculator, one has to be sold. Actual supply and actual demand ultimately drive prices. If speculators drive prices of contracts up, some actual consumers MUST ultimately buy those contracts from them and the speculator will take a HUGE loss if there is not enough actual demand.
Correct,
In fact, the cost of fertilizer has quadrupled. (Made from oil.)
The “Organic” mantra will pretty much dry up as people see the difference in price and better quality from the “dirty-evil man-made” food products.