Food inflation is the killer of all business cycles

[charliep]

[Burbert]

HUNDREDS OF MILLONS OF DOLLARS in farmers pockets??????????????????????????

[wilagro]

Yep, lets get back to the days of "take or leave it" trading where its every dog for himself.

They'll pick pick your bones clean and look for the next sucker.

[checking]

Yes, burbert, it is hundreds of millions.

You are sharp enough to realize that for each 1 million tonnes of wheat sold, a dollar per bushel equates to $36.744 million. If you were making a profit on wheat at the present CWB fixed , or expected price, then that entire dollar above that of the CWB price is pure profit. The market price is this much higher.

Is the CWB worth more for you to keep than pure profit is worth in your pocket?

[vvalk]

Wilagro. With the CWB protecting you from these predators then wheat and barley acres must be exploding. All those scary open market grains like canola, pulses and specialty crops must be in decline.

[FarmRanger]

In canola we're the dog; in wheat, the fire hydrant.

[ado089]

Jensen. Your logic suggests that money spent on food is somehow worth less to the economy than money spent on anything else. As long as the money being spent on food is reinvested and grows it will not effect the overall economy. It's like taking 5bucks from one pocket and putting it in the other and saying you have no money. Sectors cycle just because things will look different 10 years from now then they did 10 in the past doesn't mean it's bad.

[Burbert]

Sooooooooo, once the CWB is gone, its all profit for Comedian farmers? You don't think that some other entity, like a greedy grain company er incredibly greedy railroad, might think they are entitled to some more profit and raise their rates? Then with nobody to represent them, Comedian farmers might in fact become BIGGER LOSERS than they currently are? Or would the open market come to their rescue and stifle the greed to help all Comedians?

[jensend]

all i'm saying is that you can't spend it twice. the premise is that if food inflates it will affect the business cycle because it cuts down on spending in other sectors. if food spending goes up does it necessarily mean more is consumed?

[charliep]

within North America and Europe (other parts of the world are different), the consumer does adapt. They change where they eat (more at home) and what they eat (more hamburger/chicken and less steak). The food inflation issue will be a bigger issue in areas of the world where diet is basic and represents over 50 % of the consumers income.

A lack of consumer confidence brought on by higher home expenses/more expenditure on basic needs will change attitudes. As indicated, the consumer is the driver of the current up surge in financial markets (accepting they are doing it in Canada on the backs of cheap interest rates). Locked in a 5 year morgage at 3.69% on my house.

[hedgehog]

trouble is, the world is eating oil.
what price will wheat be when there is no fossil fuel to make nitrogen?
definitely no plasma screens then.

[ado089]

Buisness wise i don't care about the people how spend more than 50% on food. They will spend 100% if they need to, socialy a different story. As for North America...Lets analyze a typical persons monthly expenses. Mortgate $800, vehicle payment $750, gas $450 utilities $400, insurance $200, Entertainment $400, groceries $400. I'not icluding eating out because that can be any figure you want it to be but food is far from being the money hog that say owning a vehicle or house is.