One for Errol

[rkaiser]

http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis

[kato]

Mmm... This should be added to the discussion on sustainability over on the beef forum.. Sounds like this way of operating wouldn't qualify.

[errolanderson]

Randy . . . there is no doubt that these funds (Goldman Sachs and others) create increased price volatility. This is an old bull story (2011) as the reverse is holding true in some commodities today.

Funds in my experience can push markets too high offering growers tremendous hedging opportunities ie: wheat this winter. But they can also drive prices too low as may be the case this fall in the grain world.

Funds can be a love/hate relationship for producers. Great when they are on your side of the ledger. But not great, when they are not.

But commodity funds and their activities have offered producers super profits, providing the producer takes them.

Story was true at the time of writing. But not so true these days.

[rkaiser]

And thus the reason for the bump that got all the grain growers horny for more debt and now the fall?

Point is, supply and demand seem to have gone by the wayside as emotion in markets screws with farmers heads. And seems to land them further and further in debt -- just the way Goldman Sacs and their big momma at the Fed like it.

[sumdumguy]

So true rkaiser. Some took the bait. Now the treadmill.

[errolanderson]

Randy, don't blame the funds for farm debt

A farm manager is only as strong as his or her weakest link. Marketing management and skill is and will always be critical to any business and their survival.

[TOM4CWB]

Errol

Correct

Foresight is the recipe for prospering.

[rkaiser]

Who do we blame for temptation and greed Errol? LOL

The fund players and the fed know damn well that humans will always gamble.

One thing for sure, buying cows with calves at $3K and using the bank to do it is pretty damn risky biz these days.
But them thar futures markets driven by funders and not real supply demand are tempting a lot of farmers and ranchers.

Funds are always about gambling Errol and never about gambling on a loss. Bullish as people are, the commodity player is the one who always pays the piper the heaviest in the end when the tide turns.

[BFW]

So just how much would you pay for feeders or invest in a cow or farmland if there were no futures market to give you an idea of what you might receive for your production. It can be brutal and seem unfair but if you stay on toes the market usually gets it right.