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cropsey, il 61731 | There are plenty of us who have looked at the past few years of high prices (for everything btw) and wondered how it got here. Others thought 'it's about time' and think/thought high prices are here to stay. I have to admit after lots of years where we were basically out of beans the price bumped up a little, but once one extra bean was found in a bin the price tanked. The past few years though other things were driving our market and fundamentals were just the news 'attached' to the market move.
The fact is end users have been bleeding a long time and though expansion is an option I would say it will be conservative at most - adding a few pounds/animal uses more grain, but not as much as more animals. Also, to a large extent the players left are consolidations of other businesses making less players in the market and probably less excitement. It's no doubt every end user is hoping for a big reset.
To us it means back to thinking about the cost side of the business a lot more. There will be plenty of previous 'needs' that turn to 'wants' and eventually 'cant haves'. Unfortunately, as usual, it's a little late to playing defense with prices. We have been lulled into being offensive and defense always costs money. I would imagine $4 is a magic number for many of us and that might mean getting some of 2015 priced even though prices are falling. I hope we have some sort of bounce back to better prices and we are at the lows right now. This 'return to reality' might mean many of us get back in the habit of playing defense with our marketing. | |
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$3 corn and prospective planted acres, the driver.
