Commodity Deflation

[farming101]

Canola holding its own, Wheat losing ground.
What the chart doesn't show is the producer's profit margin. As you say costs are out of control.

[farmaholic]

Thanks 101. Canola surprised me and I thought wheat would be even worse than it is. The linear lines sure smooth things out and there are some drastic extremes otherwise.

[farming101]

Yesterday my nephew was told wheat sold for $6 in 1980. Right away he got on the inflation calculator app and says, "that would equal $17.50 today."
We're already deflated quite enough thank you.

[farmaholic]

My thoughts exactly, but grain commodity prices will probably have to follow the rest of the commodity complex "in sympathy". Even if there is no real need for the deflation! Pawns... man I hate when technical signals move markets when fundamentals would dictate otherwise(not saying that is the case here because I don't do in depth market analysis)

[tweety]

People will always need food. There is at least some comfort in that, at least for the ones who own land.

[errolanderson]

The 1980's were very inflationary. Remember Canada Savings Bonds yielded 18%.

My first Mac computer with the power of a toaster cost $7,500.

But global governments had very little debt. Reagan's debt was miniscule. As the U.S. headed into recession, U.S. air traffic controllers went on-strike. If my memory is right, he fired them all . . . .

In those days, a U.S. recession could be fought with government spending. But today (IMO) government debt is far too enormous for that plan to work, (as markets are now finding out).

Interesting times . . . .

[blackpowder]

And it's become more common place to reward a ceo whose department is guilty of fraud while they fire 5300 underlings.
While the man on the street aspires to be that ceo.
The welfare thinking created by First King Pierre breeds on its own. Gimme Gimme Gimme.

By the way, you're producing a raw commodity for the economic system in which you've resided all your life. Get over it.

[perfecho]

Errol, not a financial guy at all...only pondering..., however was it Reagonomics that lowered business tax substantially and started to put more on the working class? Seems since late 90's, many businesses have had major cash, and buying up other businesses became the name of the game. Have seen that locally within the Nisku oil sector....some actually started companies to bought. (Things have changed in the last year though)
Look at the latest Monsanto deal...wonder how the change in tax (and control) has had on current situation......????

[errolanderson]

perfecho . . . good question and just a personal opinion.

We will see massive changes (shake-ups) in both the financial and corporate world over the next five (5) years.

Many companies will not survive this downturn. Many business names will simply disappear via take-over or bankruptcy. This will stretch far outside our world of agriculture.

An unstoppable train right now . . . .

[foragefarmer]

Errol


"We will see massive changes (shake-ups) in both the financial and corporate world over the next five (5) years.

Many companies will not survive this downturn. Many business names will simply disappear via take-over or bankruptcy. This will stretch far outside our world of agriculture."


This has been going on in business long before you started to predict doom and gloom here on Agriville.

Have you been sitting on the sidelines since you began posting these economic forecasts?