Lumber Prices

[Space Karen]

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.

---

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.  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.

“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.  Why wouldn’t they be?

You need to learn basic economics.

Ccat

There are different types of farming utilizing different methods and strategies.

Some use crop rotation and organic fertilizers. While others are agro chemical based factory farms.

Chemical based herbicide, pesticide and fertilizer are derived from natural gas or petroleum products. Causing herbicide, pesticide and fertilizer costs to rise in lock step with the price of natural gas. These farmers won't fare well in current economic conditions due to their overhead being dragged upwards with uptrends in fossil fuels.

Farms using organic fertilizers won't be as severely affected. The high cost of agro chemicals could force more farms to adopt organic methods.

If you have ever seen a chart for wheat prices and agricultural commodities. They do not trade horizontally. There is a significant amount of volatility for obvious reasons. The pipe dream of "perfect global competition" failed to manifest when industries became centralized and consolidated.