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| Another way to look at it is that as we consistently grow decent yields even with problems. There is no fundamental reason for buyers to bid up grains. We joke about killing off the crop 72 times before harvest, but we did have more serious problems in the past. Technology and decent weather have brought the bottom way up. Another thing to consider is just like my hog buildings, I'm always going to produce. Too much money invested to let any of it sit idle. None of that makes buyers feel there is much need to bid.
It's still a commodity market which could care less about cost of production and sometimes even apparent "shortages". Without intervention fundamentals could eventually force land out of production. You'd like to think it's somewhere else and there is a good chance that the places outside the US that had success at $6 corn may return to their original crops, but that's not a given. Conceptually, the market will drive prices low enough to reduce supply or increase demand. Typically this is no fun, but the good side is that there is good demand for commodities that are cheap and plentiful. We just need to adjust as it cycles.
The kicker is that there is lots of money around that used to go into other industries, but with our government continually cracking down on what it doesn't control, that money has no home. There really is nothing wrong with coal, yet it doesn't appear to be a good time to expand the business (coal lobbyist must have slept with the wrong wife or told a really bad joke at a party - the gov't is no more concerned about the environment than al gore). That said, this money could chase commodities at any time. My guess a hillary victory might work out pretty well until they outlaw meat for everyone except politicians (probably not all at once, just the slow grind of regulation). On the other hand, Trump may ease or stop the expansion of bureaucracy and that money will leave commodities for a long time (go for the brick and steel vs the roulette wheel of commodities). I guess we'll find out. | |
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4 years of record production Tara
