Paradigm Shift

[Zaphod]

I agree that the oil price situation is a key change. How long it will last, nobody knows. I'm still not convinced it's permanent. I heard someone smarter than I am (that could be just about anybody) talk about $40 a barrel the other day. What happens then? I personally think this high grain price environment has another year or so as the acreage battle Charlie mentioned will keep prices up. I'm just not convinced about the new paradigm (I've heard it from a number of people). I may be old school but I think the cycles are going to continue. Don't forget, people are most bullish right at the top -- that's what gets it there. Is this a top now? I don't know, and we'll never know for sure until it's long past (because we probably won't admit it until prices have lost a dollar or two a bushel).

[jensend]

i think cycles have been lengthened/flattened by the scale of individual operators in the industry and the technology being used. i think oil prices will drop from where we are but the trend will remain higher and prices of products won't drop back as dramatically.

[cottonpicken]

I agree guys,it is definately a cycle type thing but it has a long way to go.

The "paradigm" is proper management when everything has changed.Higher input costs,higher incomes,shortage of labour,volital interest rates,machinery inflation,land inflation and the tax man are going to make farming as fun as ever but generally keeping your head above water should be easier than it has been since 83'.The key is to maximize these good times.

I'm to young to remember the 70's but i'm guessing very few people were exiting farming during that time(maybe some of the older guys will correct me on this).

Back to the cycle there are a lot of things driving it.Peak oil,monetary inflation,7 billion souls,urban spraul,desertification,weather pattern shifts,war and satellite t.v.

Some social commontarity types say that the world "really" changed in the mid 90's with the introduction of satellite t.v..It may sound silly to us but for the first time ever the 5 billion have nots of the world were able to see on t.v what the other billion or so had.And they wanted it.

So were back to square one,one gang of cave men fighting another over the local watering hole.

[Zaphod]

Interesting. I was wondering where the satellite tv thing came in. I would probably lump the internet in with that. Same reason.

No argument that the cycle may last longer than usual, but I was surprised how fast we came off the 2006 lows. Is it possible that it could tip over that fast too?

[DogPatch]

Grain prices are great...... We best not forget that the hog and cattle industry is still in the can. We better remember who bought our light feed barley, frozen wheat Fusarium grains when the world prices were in the tank. Its no different that hay prices when the drought was on.

Some of the best local markets are still in danger because low commodity prices.

[charliep]

I put the paradigm shift in terms of what a farm manager does differently in an optimistic but uncertain time period. As an example, I note SASKFARMER3 comments about using the current time period to get a farm balance sheet in shape (assuming the crop quantity and quality are there).

What changes will farmers make in managing their businesses in this new paradigm?

[TOM4CWB]

Charlie,

I see the need to consider a $1.25CDN/US Dollar...

When this occurs... how do we prepare our debt/equipment/land balance sheets to accomodate this change?

[jensend]

http://www.youtube.com/watch?v=ljbI-363A2Q

opportunity or threat? like everything else probably both.