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What do you propose as an alternative to low prices to balance supply and demand?
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redoak
Posted 5/3/2015 12:16 (#4549570 - in reply to #4549463)
Subject: RE: What do you propose as an alternative to low prices to balance supply and demand?


deep SW On.
Alberta Farmer - 5/3/2015 11:55

Here, and everywhere else in the ag community there is constant complaints about the prices we receive right now.  And trust me, I am no happier.  But if we all got our way, and magically prices were always above our COP, what method of balancing supply and demand would you propose?  We are all openly wishing for our fellow producers in South American and the Black sea region etc. to cut back.  But how does wishing for higher prices accomplish this goal?  Last I checked, the free market does an admirably job of motivating suppliers and end users through an intricate mechanism known as price.  It is usually painful for one side or the other.  So if we remove that, what tells me to cut back on grain production and increase my livestock, or vice versa?  

Blaming funds and traders for the long term trend has to be the most ridiculous concept I've ever heard.  Maybe we can blame them for scalping profit in between what the producer receives and what the end user pays( assuming that they aren't just making and losing money from each other, a net neutral)

So please tell me what method you would use to keep production matching usage without price? 



Human nature & greed says as long as its not a supply managed system you cannot expect too receive a profit or your COP each year as like you see in every business when profits stay "good" for a length of time expansion takes place and new people enter the business .....gov't payments can also alter mkts. as giving safety net and for guys with 0 debt a good profit . The "greenhouse vegetable business" in my area so far seems too be on an expansion mode for that last 20 yrs , and these expansions are $10-50 million so they must be profitable too keep building /getting financing . There lifestyles rally those of the rich & famous .I figured the longest it could last was 5 yrs. before a crash and I was completely wrong. Unless we want to move too even more of a socialist or communist soceity model I don't think there is an answer . What will be interesting is hoiw all the "free enterprise/no gov't involvement" farmers will deal with a few yrs. of low too no profit. Good question Alberta Farmer
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