Inflation

[cowman]

Our govt. keeps telling us it has got inflation pretty well wrestled to the ground. I sure wish they could come out to my place and do some wrestling!
I see hay costs me 100% more than last year, barley about 25%, cell phone 8%, insurance 15% and on and on! Land prices in my area have gone up anywhere from 10% to 50%, but fuel is down from the peaks of last year...of course it is still up from the year before. I assume my health care costs are up and my education costs and my general all around govt. costs, as they all are getting healthy raises. In the meantime my Canadian dollar is worth 6% less so I guess any parts(or almost anything else) I buy will be up 6%. So what has gone down? Well interest rates for sure...unfortunately that works both ways!!
They talk now of deflation...does this mean we can roll back the big wage hikes they gave themselves? If inflation is practically nil why did they need a 20% increase?

[nakodo]

I thought higher prices for land, hay and barley meant good times for agriculture? :-)

[ianben]

Do your land prices ever reflect the state of agriculture?
They don't seem to over here!

There always seems to be enough people looking to live the dream with money made elsewhere.

Hay and especially straw are very expensive here too. It seems the only people farmers make real money out of are other farmers.

Regards Ian

[cowman]

Nakado: Higher prices are great if you're selling; not so good if you"re buying! As far as higher prices for hay and barley go, no one is getting rich as the yield was so poor in most areas. Probably a lot less than when prices were low. No one wins in a drought!

[nakodo]

one of my friends has several aerated bins full of spices, he buys in the years when the price is low and holds them till the other growers quit growing for a year or so and the price rockets and he sells. Another tarps his hay for up to 2 years and sells it old stock first in years like this year. I agree a drought is not good for those dryed out but then Inventory control is also a part of doing business .....

[cowman]

And this is fine if you can afford to do it. But storage has costs too and still the bills must be paid. Meanwhile the product quality goes down. I'm not saying that it can't work, for your friends it obviously must or they wouldn't do it. Maybe you've just solved the western grain problem...we'll all build huge graineries and wait for the price to go up! Sort of store it up for seven years with the hope of seven lean years!

[nakodo]

Isn't that what all those concrete elevators are for? :-)

[Steve]

Try to see the trees before you see the forest.

You store a small part of your grain and sell when the price is right. This is nothing new because farmers have been doing this for years, and is not as risky as buying options on the futures market.

If you have to sell every kernel of grain that you produce off the combine every year, I suggest you take a good look at your overall operation, because there is something missing.

[cowman]

No Steve I don't sell every kernel because I don't have any! Over twelve years ago I decided grain was a loser and got out of that game. Besides going around and around a field was not my idea of fun...especially when I could make more money watching cows eat grass! So I sold off the grain equipment and started doing what I enjoyed. And I never regretted it for one minute!