OUCH!! get ready.

[SatinsRule]

Right now, the market is being driven by speculation on the commodities market. Once the harvest begins....we may...or may not see a downward adjustment depending on the quantity and quality of the harvest. DO NOT expect prices to fall as far as they rose...that will never occur.

The market is volatile at the present. That's the main reason behind the large feed price increases. I buy feed in 500# lots, 4 times a month. My profit margin on fryers has been all but devoured by the present costs of my feed. Given this situation, all grower's are taking it on the chin at the present time.

My processor requires/wants/needs 6000 head per week. If they don't adjust their purchase price to their growers, they'll be hard pressed to find anyone willing to continue on such a slim profit margin.

Thankfully, I've other avenues available for my stock that are willing to pay an adjusted price in relationship to my elevated costs.

grumpy.

Yep, and that speculation was a rather large part of why we ended up with $4/gallon gas in the days prior to the meltdown in 2008. The major oil company on the market (Exxon Mobil) saw the stock market taking a nosedive that fall and they directed their speculators to drive the costs of light sweet crude up so they could buy back their shares from shareholders who had invested in the company's research and development functions a couple of years earlier. They hsd to buy back those shares ahead of that meltdown.

They're doing much the same thing right now in preparation for the coming months, when we're going to see a further-weakened dollar on the international market coupled with a harvest in a region which grows a huge amount of food annually which we all depend upon in ways which we never imagined. If folks were hopping mad in 2008 when they were shelling out $4/gallon at the pumps, you can only imagine how they'll act when their prices at the local grocery stores begin to skyrocket. To top it off, just let Israel carry out an attack on Iran and see what happens once the Persian Gulf shuts down traffic.

 

[MamaSheepdog]

I've provided a link to a short article in technology review published by MIT. It speaks of a study done to determine what causes riots. The answer was surprisingly simple... it is the price of food. To quote:

"It stands to reason that people become desperate when food is unobtainable. It's often said that any society is three square meals from anarchy.

But what's interesting about this analysis is that Lagi and co say that high food prices don't necessarily trigger riots themselves, they simply create the conditions in which social unrest can flourish.

In other words, high food prices lead to a kind of tipping point when almost anything can trigger a riot, like a lighted match in a dry forest."

"Lagi and co say that two main factors have driven the increase in the food price index. The first is traders speculating on the price of food, a problem that has been exacerbated in recent years by the deregulation of the commodities markets and the removal of trading limits for buyers and sellers.

The second is the conversion of corn into ethanol, a practice directly encouraged by subsidies."

"Today, the food price index remains above the threshold but the long term trend is still below. But it is rising. Lagi and co say that if the trend continues, the index is likely to cross the threshold in August 2013.

If their model has the predictive power they suggest, when that happens, the world will become a tinderbox waiting for a match."

opcorn: Popcorn, anyone?

http://www.technologyreview.com/view/42 ... e-of-food/