The market is sending a loud clear signal to the spring wheat belt to plant wheat. Also sending a signal to those of us in the winter wheat belt to go ahead and buy expensive nitrogen and potash to fertilize wheat.
Its classic supply and demand at work. Its not that the market wants that much more wheat, its that it doesnt want to see any more acres shift to corn.
Yet the best cure for high prices is high prices. There is already talk of letting some CRP ground bid out early (the most recent edition of Farm Journal). Already the livestock sector is feeling the hit. The hog complex is imploded. Lots of cheap pork hitting the market. Cattle cant be far behind. Breakevens are running in the high 80s right now on fat cattle. Were it not for excess capacity at both the feeder and packer level the cattle market would already be in a downturn. Yet we are still killing cows and heifers at a record pace. No sign of herd expansion.
Between fuel and food prices inflation is sure to follow. I'm not a nay sayer in that the sky is falling. Once inflation really takes hold the fed will have no choice but tighten the money supply. A strong dollar will sure kick the chair out from under the land bulls, lower energy prices, and as soon as crude gets back down under 50 dollars watch the corn market collapse since nobody will want any more ethanol than they have to have. That doesnt even address what will happen to our grain exports if the dollar gets stronger.
Without a doubt its going to be a wild ride, but thats when you can make money if you are flexible and decided to be a goat instead of a sheep. Following the crowd just gets you burned.
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Today's Featured Article - Usin Your Implements: Bucket Loader - by Curtis Von Fange. Introduction: Dad was raised during the depression years of the thirties. As a kid he worked part time on a farm in Kansas doing many of the manual chores. Some of the more successful farmers of that day had a new time saving device called a tractor. It increased the farm productivity and, in general, made life easier because more work could be done with this 'mechanical beast'. My dad dreamed that some day he would have his own tractor with every implement he could get. When he rea
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