socrateazz

What Lies Behind the CFTC's Revocation of Exemptions in Agriculture Position Limits?

I believe current attempts to lower food prices will probably have the opposite result because too many farmers are already in such a marginal position that they may go out of business. Corporate farms may save the day. New farmers are not as likely to because new farmers tend to make some mistakes and there is not much forgiveness for such. Also, the capital investment in farming is great, Where does it come from? Fertility of the land will need to be replaced. Where will it come from? At what cost? Food will not get cheaper long term because needed nutrients will need to be replaced or production will reduce. The choice has been made. And I expect the government may act even stupider long term to make things better for the next few days. Will the folley subside? Only after trying to force changes which really just makes things worse. I believe a little hunger will become widespread starvation before realization that an economy needs to really be balanced and not controled by the ignorant short term policies. Especially ones that cause less incentive to produce. The future is what will be. Hope is an expectation things willl change without making the changes needed to accomplish such. Will they?

Agricultural Commodities in the Face of Deflation

As a farmer I can not disagree with your analysis. Interesting you mention fuel cost. Even more important to me is my fertilizer cost which is about double my total fuel cost even though I feel and leaf analysis indicates I am shorting the needed nutrients. As with any business, costs can not continue to exceed return. There will not be as many farmers as long as margins are as tight as they are. My margin has been negative for the fifth year this year. There are a lot of folk having the same problems. If return relative to cost of foods do not increase, then severe and drastic shortages will develop. Some foods will increase markedly in price and more production will result. The need is for important people to realize how important food is! I suggest minimal interevention. Over the long haul costs of production can not continue to exceed returns. I may become an exfarmer if the current trend continues. And many others are in the same situation.

Jim Rogers Believes World Is Heading for Depression

Debasing a currency is really a problem when it is taking place. Once it is finished, It could be a boom. China did many things right! And they made many errors since Mao days. Why is China in a boom? One answer: It encouraged its people in Capitalism! What a communistic country being good at Capitalism? Capitalism creates the wealth that can be used within any society. Generally China has enough wealth production within the country to cover its own needs. And of course if you look at socialism within the country it is minimal. There are communistic projects in the country, Many actually create much wealth. The socialistic programs in many countries are using up wealth reducing peoples abillity to create new wealth. Until western countries wake up, expect an ever increasing depression!

DBA: Challenges for Agriculture Could Benefit Soft Commodities Prices

My view, Droping farm subsidies will probably help farmers more than hurt them! Why? The subsidies are offered more as a way to stabilize production of foods rather than as real help for farmers. Most of the monies go to food stamps which help farmers marginally but are really there to help poor with food. The variable cost of production is a greater % of the expenses for food production. Many of the costs are trade-offs of more imputs or lower cost. The real needed imputs are soaring in cost. Fertilizer cost has increased 150% to 500% in the last decade. The lower natural gas value has not been translated into fertilizer prices seen about the year 2000. The costs needed for farms is just much higher than ten years ago. Look at the big imputs. Fertilizer, fuel, transportation, chemicals, water, and Taxes! Has the value of food commodities Kept up? If many good farmers need and can not get loans, what do you think? The juice is pretty much squeezed out of farmers operations. I think the future is very bright for farmers but not by farmers taking a penny to supply a dollars worth of goods at a ninty cent return. I think that is where farmers are at currently. Can not continue!

How Obama's Budget Will Affect Commodities

Do expect commodity prices to have extreme spikes! Also expect the government to suck wealth out of those spikes causing fewer people to be willing to invest in those areas causing even more extreme commodity spikes. The markets will be trading markets. Probably more like roulette than Poker. Policies will be extreme and fleeting during Obama's term. Obama seems to have beliefs which say belief is more important than facts. Will reality set in? I wonder if we have another Fidel, Sadam, Hugo. Adolf, or what! I guess time will tell. The next twenty years should be interesting if not exciting May God help all deserving!

How Obama's Budget Will Affect Commodities

I know most average folk would not believe this. I am confident most farmers budgets are so close another bad cost to return year would sink them! Why do you think those so called well off farmer need an operating loan in the first place? Most farmers believe in using their own wealth from previous harvests for production costs. Likewise most farmers are not in a position to do such. I view farm programs as bait to keep farmers producing for minimal return. So I am all for dropping them. food shortages will develop anyway! It happened in USSR, China, Cuba and where ever communist policies have been implemented! What makes people think the US would be any different. I know Obama's policies are not communistic! To that I say: LOL

@CIWC: Bubbles and Supply Shocks

I think things are worse than you may think. Agriculture is leveraged too greatly and a lot will find they can not get the money to plant the crops to produce the food. Fuel may be more important than a shiney metal alright. But food is more important than fuel. I think everybody will be shocked at the record agricultural bankruptcies they will see in the next six months. I assume major agricultural production will need to be guaranteed by bailout also this spring. A failure to do so will pobably result in so called unexpected food shortages.