Skid in Fertilizer Prices Continues

[checking]

There is one other way I look at this. Mr. Doyle's policy may give a bigger boost to our farms than anything else could. It's been determined that world agricultur can not produce the current surpluses without potash use. It is those world bumper crops that are making it hard for all of us. Get rid of, or prevent that 10%-15% over production and our farm income can double. My jury is still sequestered, but it may recommend that Mr. Doyle be placed on my X-mas card list.

[ado089]

I don't care if the guy wants to make money...hell my goal is to make money. They do help Sk. along as far as jobs and paying taxes. My beef with Doyle is two fold. First the Chinese have already decided that they're paying too much and are building their own mines in Russia and I beleive one near Esterhazy/Stokholm area. Secondly that day this winter when he was on BNN saying that it's the farmers "obligation" to grow food I wanted to punch him in the throat.

Food is not an issue either. All of these models that the agri-buisness use are flawed. They don't take into account fundemental rules of demographics, such as when a population get's wealthier they delay having children and have fewer. The western countries populations are static to shrinking, China's will be stable in 20 years, all that leaves is India and Africa after that. Beside that 1/3 of the population would be happy to have a shoe to chew on, another 1/3 are content with a bowl of rice or loaf of bread a day and the last 1/3 has so much money food will neve be a concern for them. It's the last 1/3 that needs to run out of food before prices will react and we are a long way away from that happening.

[dmlfarmer]

checking:
there are 2 problems with your reasoning. First, can the consumers who ultimately buy our grain afford to pay double for the foods produced from the grains? No question they can in Canada or the US, but the majority of our exports go to areas where it this is likely not the case.
second, you are assuming that all the price increase resulting from any decrease in supply will go to increased farm gate prices. Recent history shows this is not the case. Everyone in the value chain will seek to maximize profits and the the ultimate price taker - the farmer - will likely see prices increase by a small fraction and even this fraction will be counteracted by input costs rising as suppliers see farm gate prices have gone up even by a small amount.
The only check on high prices is competition. And we do not have that in fertilizer production.

[checking]

I suspect I don't much care for sunny day free enterprizers who when a dark cloud grabs onto them decides that someone has gained the advantage at their expense. Ado089 comments on the construction of new potash mines will take care of your lack of competition concerns that lead to high potash prices. If China is willing to build one in Saskatchewan, then I say we should be pleased to accept their royalities, and all the other spin offs. That may be one more thing that I can congratulate Mr. Doyle on, as a by-product of his actions, for bringing to this province. In this area, there was a single gas plant operator, who when asked by an oil company to increase raw gas prices to them gave them a flat out "no" response. The result was that over the course of the next few months, the oil company decided to plan and build their own gas plant. When word reached back to the first gas plant owner, they were suddenly prepared to grant a raw gas increase. Trouble was that they had so offended the oil company that they didn't care what the increase was, or what their own plant would cost them. They built it, and now both plants are running at capacity. In fact, the oil company plant is not only selling methane to Transgas, but they are producing propane, and are set up to produce butane. Dmlfarmer, I think you're back to the "how many loaves of bread can be made from a bushel of wheat, and what's the price increase/loaf if the bushel raw product is doubled?" You know the answer, and even if it did double it wasn't the double farm price that caused it.