Higher Food Prices Bane of Farmers, Boon to Agriculture ETFs 5 comments
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As food prices soar, corn and soybeans have tripled in price and they’ve given agriculture exchange traded funds [ETFs] a chance for growth. But in the meantime, other industries are getting killed.
One casualty of higher food and grain costs are the catfish farmers in the South. They have been unable to keep up with the high cost of corn and soy bean feed and have no choice but to drain their ponds.
Among the reasons corn and soybean prices are so high are harvest shortfalls, demand from the Asian middle class, government mandates for corn to produce ethanol and the flooding in the Midwest, reports David Streitfeld for The New York Times.
Feed has become more than half the total cost for raising catfish, compared to one-third for pork and beef production. Catfish has become vulnerable as the economics went astray and other industries will fall victim as well.
It’s a bonanza for corn and soybean farmers, but not so much for consumers.
ETFs that could get another growth spurt as resources become more scarce:
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This article has 5 comments:
By double top, I assume you mean 43 for DBA. Chartists are like weathermen. One sees double top, another sees support at 34, still another sees 35. Today it broke the 200-day moving average, which is supposedly bearish.
On the fundamental side, the cost of production, energy, fertilizer and seeds, have gone up compared to last year. The demand only increases. Unless you predict a bumper crop, the bull won't die.
But given the inflation and limited production of grain based products in other countries, I think food price will continue to go up in the intermediate run.