DEFLATION: Comin-in strong

[biglentil]

Biglentil, good point. Supply chain issues have created the perfect opportunity for gouging. Just look at grocery chain profits recently. Is this true inflation?

Once the suppliers losing control of tight inventory, prices collapse. This is now happening one-by-one. Wait for the layoffs, wait for the bankruptcies, welcome 2023 . . . .

Central bankers don't appear to have a clue. They'll destroy the economy on their march to battle inflation and make the current recession/depression far deeper. Asset prices are in big, big trouble (in my view) . . . .

Luxury items like large homes, boats, RV's..... will suffer. However I see cost of living going much higher food and fuel in particular. Biden administration just kneecapped China's ability to manufacture computer chips by revoking all US personel and support. Yara with another large fertilizer production cut in Europe. Nordstream 1 and 2 may have a large effect on Germany's ability to manufacture. Higher rates could create a debt crisis that makes 2008 look mild in comparison. Its ugly...

[furrowtickler]

Perspective..
https://m.youtube.com/watch?v=v5JjWNdXjGM

[errolanderson]

Luxury items like large homes, boats, RV's..... will suffer. However I see cost of living going much higher food and fuel in particular. Biden administration just kneecapped China's ability to manufacture computer chips by revoking all US personel and support. Yara with another large fertilizer production cut in Europe. Nordstream 1 and 2 may have a large effect on Germany's ability to manufacture. Higher rates could create a debt crisis that makes 2008 look mild in comparison. Its ugly...

good comments . . . my view on commodities is; prices are demand-driven, not supply driven.

We are taught in economics school that demand + supply = price. Well, academia is wrong in real life. Demand is king. If crude oil demand drops globally, prices will drop, no matter the supply concern. There will be rallies, but short-lived. (IMO) . . . OPEC or no OPEC. OPEC knows this and must be a worry for the cartel.

[biglentil]

[AlbertaFarmer5]

It is interesting how we have multiple threads at the same time, discussing the massive and ongoing inflation in farm machinery and inputs. Meanwhile we have multiple threads about the impending and ongoing deflation.
They can't both be right, can they?

[TOM4CWB]

Natural Gas prices going negative on spot markets…
Both EU and US gulf…
Russia / Putin are buying all the oil/LNG transport ships that they can … chaos and market disruptions… command and control…

Turning off GPS tracking…

Volatility and instability… grains can get sucked into the vortex of chaos…

[errolanderson]

U.S. money supply is now decelerating rapidly as sign of strong incoming deflationary pressures.

Bloomberg reports that 37 percent of small business now not paying their rent . . . discounts, discounts, discounts.

[Hamloc]

It is interesting how we have multiple threads at the same time, discussing the massive and ongoing inflation in farm machinery and inputs. Meanwhile we have multiple threads about the impending and ongoing deflation.
They can't both be right, can they?

I have been trying to figure out if the reduced supply of new equipment is intentional or a result of actual unavailability of parts to build them. According to the one salesman I deal with, the problem is the manufacturers can’t get the parts they need in a timely manner from their Chinese suppliers. Certainly glad I bought the equipment I did last year and the year before. Prices on Mfwd tractors are up 50% over last year. Absolutely no signs of deflation. Potash is up 50% from what I payed last year, again no deflation. Diesel fuel, last week for farm diesel was $1.51 a litre. Just bought cow mineral the other day, it was up $6 a bag from 2 months ago. Errol where is the deflation, when will I see it?!

[furrowtickler]

Agree , I see zero discounts and only continued inflation in everything Ag related ….. everything

[fcr]

A bit off topic a litre of dmo 15/40 oil at our coop is 9.00 bucks , walking tru Walmart and noticed they sell dmo 15/40 for 3.43 a litre. Did some on line research and it looks good .Anyone using it .

[shtferbrains]

I started using Walmart Trans hydraulic as it was a lot cheaper to keep extra around to refill after blown hoses.
Have an old 6400 FWA with 17000 hrs that has seen a lot of 15-40 over the yrs. Use coop synthetic in the winter.
A guy who said he worked in the lab at the Coop refinery told me there was nothing wrong with it.
The price seems to stay the same no mater what a barrel of oil is worth.
Used to buy JD +50 on the annual sale.

[ajl]

Agree , I see zero discounts and only continued inflation in everything Ag related ….. everything

As it was in the 80's, deflation started on the output side not the farm inputs side. This is why so many were in financial trouble. We see oats, once bid at $10 locally, now $4.35. (Better than the 3.25 it was). Canola down from $28 to around $20. (Canola price rose after the fact that canola yields were lower than expected) Wheat got picked up at $12.50 yesterday, now you can't get that. My 13.50 wheat target has expired. First time a grain target expired in a long time. Wheat has a war premium in its price as the crop was fairly good around here as were oats that do not have a war premium in the price. Watch for deflation on your outputs.

I have used Walmart oil to top up anything that burns oil, which is most equipment. All equipment still going. I also use Agco 15/40 which is $99 per 5 gal pail. Can usually get Case No 1 for similar if they refill my bucket. $9 per litre seems pricey for non synthetic. Have gotten Shell T6 synthetic for around $130 per 18.9L pail during UFA oil sale after rebate. Stocked up and use it in the snow pushing tractor and the diesel pickup.

[errolanderson]

As it was in the 80's, deflation started on the output side not the farm inputs side. This is why so many were in financial trouble. We see oats, once bid at $10 locally, now $4.35. (Better than the 3.25 it was). Canola down from $28 to around $20. (Canola price rose after the fact that canola yields were lower than expected) Wheat got picked up at $12.50 yesterday, now you can't get that. My 13.50 wheat target has expired. First time a grain target expired in a long time. Wheat has a war premium in its price as the crop was fairly good around here as were oats that do not have a war premium in the price. Watch for deflation on your outputs.

I have used Walmart oil to top up anything that burns oil, which is most equipment. All equipment still going. I also use Agco 15/40 which is $99 per 5 gal pail. Can usually get Case No 1 for similar if they refill my bucket. $9 per litre seems pricey for non synthetic. Have gotten Shell T6 synthetic for around $130 per 18.9L pail during UFA oil sale after rebate. Stocked up and use it in the snow pushing tractor and the diesel pickup.

Right-on-the-money . . . Deflation is swirling all around the ag industry, for those that can see it.

[Guest]

have been using rotella T4 15w40 from walmart for years , usually $69 for 19 liter pail
can tire will match price
have been out for a while but i see they have it again at $98
just hasta wait for oil sale and get it cheaper
Co-ops have become high priced convenience stores

[blackpowder]

BoC chief should be buying his own necessities personally, maybe the rate increases would stop.