Lumber Prices

[Ccat]

The price of wheat is determined by the market:  supply vs. demand.  It’s the one of the most competitively priced things on earth.

MS Ag Econ, 1975, UC Davis (rated as the best Ag Econ dept in the world) and 43 years of hands-on, “money where your mouth is” farming experience.

You don’t want to be a wheat farmer:  brutal economics.

Ccat

Wheat is in high demand during food shortages and famine.

If prepared and stored correctly, it can remain viable for 30 years.

It is a great time to be a wheat farmer.

You might have noticed russia invade ukraine to seize control of their wheat supply.

Even Putin is getting in on the commodities action. Although I doubt many noticed.

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Nonsense.

“Wheat is in high demand during food shortages and famine.”   Short food supply implies higher prices not higher demand. Demand for commodities is relatively inelastic.  Higher prices will generate increased supply but with a time lag.  Yada, yada, yada...Learn about it.

“It’s a great time”...  For about five minutes.  Then prices will get back to normal which will be barely above or just below the actual cost of production due to near perfect competition, worldwide.  What you are referring to is “windfalls”.  You can’t do probabilities (and thus plan) on windfalls. 

“Commodities”....  you are speaking about *speculating* on a crop, not growing a crop at a profit.  The added expense of speculation decreases profit.

“Viable for 30” years, etc”:  it costs money (which increases expenses and, ceturus paribus, decreases profits)  to store/maintain a crop in sale-able condition.  All seed germ degrades over time.  You are talking theoretical germ viability, not crop profitability.

There’s no “gravy train” for commodity farmers over the long run.  It’s a hard scrabble life.  Once in awhile you have a lucky year and finally make a little and *think* like you are going to finally get rich.   But that is balanced out by all the marginal years or outright losses.

Making a profit by growing a “commodity” will be short lived because commodities are nearly perfectly competitive over the long run. 

perfect competition eliminates profits.

You need to learn basic economics.

Ccat