SE IL | Sat - 10/10/2016 20:21
"farm storage causes loss of market share?"
Can't really conclude that, history records from the 1970's/80's say it does.
Search "US grain reserves" you maybe surprised how much you can read that's NOT from the 1970/80's
Evidence in a nut shell would be corn stocks have been rising, while corn price has been falling.
One can conclude what-ever he whats from this, tho the facts pretty much stand for them self's.
IDK here but it still feels like we have enough guys out there that will not learn from history, will not learn from the mistakes of our fore-father and are willing to just store it one more year and make that killing on $5-6 corn. This was fairly evident this past summer where 4.25-4.50 cash corn was not enough for many.
I don't believe that anything before 1996 farm bill is going to help your case. Govt was in the supply mgmt business and the target/loan price was above market clearing price. Therefore farmers produced for a false market signal. So yeah, we had tons of product around that was priced too high and nobody wanted it. In that scenario we did give up mkt share as our competition priced theirs a couple cents below us. Fast forward to today, and there is no false market signal being provided by our govt. the price is a mkt clearing price. Unless the CCC loan rate is above the market clearing price. The fact that stocks are building while price falls is merely a result of generally good growing season weather coupled with the possibility that our competition is a lower cost producer. The market knows how much supply there is and the price reflects it. So I don't think that a few "ignorant farmers" are going to influence our market share. You seem to want to project the actions of a few onto the whole industry. And we haven't even touched currency exchange rates. Surely that couldn't have an effect. I don't believe you are thinking this through. But I'm open to other ideas. |
On farm storage?
