pennicilan and semen

[TOM4CWB]

Ian,

You are right to say in the end supply and production restrictions are required to stabilize wheat values!

My question is, morally can this be justified?

How many starving people in this world are ok?

If the starving people had the power to blow us up with an A-bomb, then what would we do?

Who says, and by what justification, that I am poor, when by the standards of northern Africa, or India, China or Russia, I am in the top 1% of the richest people in their countries!!!

We are talking over 50% of the worlds population in the countries just mentioned, is anyone involved in this discussion willing to go and farm in any one of these regions?

No Way, and you and I both know it!

We have things really good, are families are well fed, can get a good education if we want, and good health care compared to 95% of the rest of the world!

Now, do we have the right to say production should decrease so more poor people will starve, so we can fill our bank accounts?

Just because other segments of "civilization" like big muli- nationals do it, does this make what they are doing right?

Do we want to be accused of the same evils, and be part of destroying the world, instead of making it a better place?

[ianben]

Hi Tom
I think stable prices would help the third world.
Most of thier ecconomies are based on agriculture so realistic prices would be better for them too.
Ultra low prices are not passed they get gobbled up along the way.
Look in your supermarkets!
OUR CUSTOMERS LIKE STABLE PRICES is the excuse they use over here for not lowering prices.
Lets give them what they want I thought that was part of your master marketing plan.
I don't want to hold the world to ramsom just even out the peaks and troughs. It is not a new idea it is in the bible! you know the story of Joseph in Egypt and the 7 fat and 7 lean years.
That would be the way I hope it would work.
Where is the morality in futures trading anyway. Do you think speculation is done for the good of mankind??or to protect the multi-nationals butt!!

Chas's view is nearer the truth, gambling without going to Vegas!!!

Regards Ian

[TOM4CWB]

Ian,

I disagree that hedging my grain is gambling!

Economics dictate that at $5, $6, and $7 a bu different people will be able to survive and make a living growing Canola!

This year, people had the chance to sell canola over this range of prices!

If my farm couldn't make a profit at $5, it could likely at $7.

The market got supplied, we were competitve world wide, and noone held a gun to my head and said I had to sell my Canola at $5!!!!

The speculators needed Canola and were short of this product, but it is amazing how much could be found when the price hit $7!!!

That 15,000 short spec position got filled in a hurry.

Now about Egypt and Joseph the inspired one.

I wouldn't trust anyone today to know what the weather, or the production ability over the next 7 years should be to make sure everyone has a full tummy!!

If a benovolent dictator who is as wise as Joseph was shows up, let me know, I would like an appointment with him right away!!!!!!

How this wise person could ever get into the position of power Joseph had; today this would be less possible than having this special knowledge to begin with!!!!!!!!!!

Boy we are really hitting the fantasyland topic square between the eyes tonite, but hey, its fun, and it is really interesting!!!!!!!!!!!!

[ianben]

Hi Tom
I agree you are not gambling, I was refering to speculators who just trade paper and questioning the morality of that.
Now I am not waiting for Joseph either, but I know there will be fat and lean years, can't beat nature no matter what!

How are your crops looking ? Still looks like a very lean year here, not quite enough water now but darn't pray for rain in case it never stops again.

Lets try something with those canola prices I think I could live in that range too.

Between $6&$7 we would sell as before.

If the price dropped below $6 we would put some in the lean year bin if we had had a fat year and hope that stoped the fall.

If the price got down to $5 we would NOT sell. I still fail to see how silly low prices help anyone only middle men they never reach the end user.

When the price was over $7 we could sell from the lean year bin and hope this kept the price down. I don,t like high prices either they just alienate customers, not a good marketing stratagy.

No dictators, no laws, no hard and fast rules, grow what you like.
Just use your common-sence and hold the minimmum price.

Why not ? Would that be immoral?
It need not be a fantacy now we can comunicate like this.

Regards Ian

[TOM4CWB]

Ian,

Sounds good what you are saying!

I do hope we can have Canola back over $7/bu on a more long term basis, although if Brazil keeps expanding bean acres, I hear they have the potential for 100 million more acres, we may not see it happen!

It would be good for the earth if they would stop burning the jungle and save the rainforest, should industrialized countries be partly responsible to pay so they don't wreck the environment and upset the grain production industry around the world?

[ianben]

Hi Tom
That Is what I've been trying to say for the last six months, perhaps I explained it better this time.
I would like prices higher too perhaps $6to $8 would be more acceptable. The important point is to draw a bottom line somewhere and all stick to it!!
We must avoid those crazy lows.

I have difficulty finding an acceptable solution to Brazil etc.
I truely believe higher prices will help their peoples standard of living, but may not save the rain forest. Paying people not to do something is not good for their dignity or self-respect.
How can we refuse them what we demand ourselves?

We could do with a Joseph for this one!!!

Regards Ian

[chas]

Ianben: I believe you and I are on the right track but we can't seem to convince Tom4cwb and Melvil that the mental and physical high that you get from speculating need not be in our industry. We speculate enought by keeping inventory that is unpriced. But then they say price it. But pricing into the future works against us by keeping the same low price into the future. The only way to move price is to with hold product from the market like car makers do. But that is all speculating I quess, confusing isn't it.
Just to try and clairify my statement of large speculators. I'am talking about the large corporations such as Cargil, Louis Drefus, Tyson foods, ADM and McCains foods. It is in their best interest to keep prices of grains and oilseeds at the lowest price they dare manipulate to and still maintain a supply. They accomplish this manipulation by lobbying and buying political votes with governments. The market distortions are created by subsidises to certain commodoties which creates over production and maintains the low prices for companies who are intergrated into the food supply industry to great depth. There is also a great suspicion that these companies have a great influence on out coming USDA crop reports. The right report gets the right price. Lets not kid ourselves food is a big and lucative industry and moneymakers have no morals.
Tom the price of our product has nothing to do with the hungry and the poor of the world. If we gave it to them they would still be hungry and poor. Don't put a world political problem on the backs of farmers.
Governments must be removed from the pricing mechanizm and speculation must be removed by, if you sell you deliver, if you buy you take delivery. Amen. Pass the wine Chas.

[TOM4CWB]

Chas,

To refuse to accept that supply and demand of a grain product over the long term equals the value of this product is not facing reality!

If Brazil can grow soybeans profitably at $3.50/bu, by breaking up the rainforest, means our Canola is worth less than $5.50!

Now the "market" knows this, and unless a value added side can be added to the sale of a grain product, no one will pay more!

I am not saying that we are directly responsible for the hungry or starving people in the world today, as we do not have a cartel on grain like OPEC.

However, once we do set up a cartel, then we cross the line and take this responsibility upon ourselves!

I do not have the knowlege of what the weather will be in the next 5 years, therefore I cannot tell people how much to grow, because I cannot know what the supply will be over this time period.

Further, restricting supply and withholding a product to make this product "high priced" from a historical point of view is only cutting our own throats!!!

Mark my words, OPEC will pay big time for what they have done in the last year, because oil prices will come down!!!

It is just so profitable to find and produce the stuff that eventually the demand will fall and the supply will increase making a glut of oil at some time in the future a certain fact!!!!!

Now, when we do this with our grain, and anyone on the planet can produce grain, what makes you think if the supply is limited by us, causing the price to rise, that others will not produce making a glut and getting established?

Once they are established, they innovate, and learn to grow it for less than we can, and you guessed it?

We can't grow it profitably and are out of the business anyway!!!!!!

So now that we can't efficiently grow grain anymore Chas, because we got these other folks growing the stuff by our own greed, just so they could feed their own hungry people, why would we consider this as a solution???

[ianben]

Hi Tom
Try looking at it the other way round.

Our canola is trading at $6-$7 Brazilian soya is now worth $4.50 are they going to say we only want $3.50.

They will take the $4.50 improve their standard of living and CONSUME MORE!!!

Who says they are making a profit at $3.50 anyway, we still sell at the best price we are offered, never had a buyer worried about my profit.

You and I know we cannot grow enough to keep the whole world well fed. Iv'e mentioned before if every Chinese person was able to eat chicken once a week the present grain stocks would be gone in a year.

Just who does benefit from low commodity prices ??
Not farmers no matter where you live in the world.

Regards Ian

[TOM4CWB]

Ian.

Profit is a strong incentive to produce!

100 million acres of reserve land is a huge resource such that Brazilian farmers can bury the rest of us in beans and corn!

I certainly hope this does not happen, but ignoring reality never constructively solves any problem!

[TOM4CWB]

Chas and Ian,

Have a look for yourself on the Brazil situation!

http://www.agweek.com/docs/0725/0725ellison.htm

[ianben]

Hi Tom
Thanks, I looked up the site. A bit scarry I agree, but why are they doing this. Look at the second paragragh.

More than 15 years have passed since his father, a penniless pre-World War II immigrant from Japan who first planted soybeans in 1948, last increased those holdings. But with world soybean prices at a 30-year low, he and his brother need the cash flow and improved economies of scale.

Sounds to me like they have the same problems over there too. Crazy low prices!!!
Doesn,t look like they would be expanding if prices were higher, they haven't in last 15 years and I presume land has always been there.

Who sets these prices?

You say the "markets" you cannot interfere with supply and demand.

I wonder why not?

NONE of us producers are making money at todays prices so why do we keep selling??

I thought Canadians could produce canola at £140 atonne del Liverpool and make a profit. That is what my buyer infers when I try for a better price.
You tell me you really need $8/bushel that would be over £200 in Liverpool.

A price I would be equally happy with.
What would those Brazillian guys be doing at these prices?

Did you notice those comsuption figures up 20million tonnes/yr.

Production was up 27 million I know, but in percentage terms 7 million is small.

Just a few tonnes each in the lean year bin.

Can we not try to change a system which is wrecking farmers lives and rural comunities through out the world.
Are we going to bury our heads in the sand and be ploughed in.

We are all in the same boat lets at least try paddling.

WE ALL NEED HIGHER PRICES!!!

Regards Ian