Interesting video clip

[grassfarmer]

Cargill's profits are $471,000 per hour! See who is profiting from the global marketplace and the food crisis at:
http://therealnews.com/web/index.php?thisdataswitch=0&thisid=1495&thisview=it em&renewx=2008-05-14 10%3A10%3A20

[brian99]

I don't have to see the clip to know what's on it, grassfarmer. Every ag commodity is getting the same treatment...There are lots of names for it, but the result is the same. Our product moves in price and the "value chain" amplifies the move up or dampens the move down and makes more money. My favorite is press stories of retailers "warning" consumers of higher prices, like they are doing them a favour. LOL

Why are no ag groups talking about this issue?

[wd40]

welcome to "Free Anarchy"

[smcgrath76]

I don't particularly have a problem with Cargill making a profit. The fact that they are making a large profit is also indicative of the fact that they are a large company with a lot invested.
That said, I am concerned with the size and scope of the profits from many of the input suppliers. There have certainly been a slew of recent stories on groups such as Agrium, PCS, etc. Cargill is a bit different, but there is certainly no reason that one could not own shares in several of these other entities as a way to offset some risk.
How do we decide what is an acceptable level of profit in a business as essential as that of food production? Certainly non profitable businesses aren't sustainable. In a free market the players will charge whatever the market will bear. Should we be looking at alternatives to a free market place? If so, what are the alternatives?

[grassfarmer]

It's all relative Sean, I like most others in agriculture also have a considerable investment - in land, machinery livestock etc and not many of us are boasting huge profits. I do have a problem if their good fortune (profit) comes at our expense.
As you say we could own shares in these companies and reap some of the benefit. Lucky us - but what about the majority of the world's population whose food supply is not secure and due to the "global trading" of the mega corporations cannot afford to put a meal on their table every day let alone buy shares?

[farmers_son]

Apparently Cargill’s jump in profit was from its bio fuel divisions. It could be argued that those high profits had more to do with high energy prices than anything else and I do not want or need to defend Cargill but at least some of that profit has made its way down to the producer of the grain. I have been told that the bio fuel industry may not be so profitable in the coming years and it remains to be seen if the world economy can sustain $100 plus a barrel oil for any length of time.

The bio fuel industry and world hunger is a big and difficult topic. We should not overlook that higher world grain prices should benefit the third world farmers too. At least in the developed world it costs money to produce food and the grain guys were not going to be able to keep growing it for the prices they received before bio fuel saved their industry.

I think it is incorrect to say we have a free market economy. Even the bio fuel revolution came as a direct result of government subsidy and policy. China is emerging as a major economic power yet they do not have a free enterprise economy. See:

http://economics.gmu.edu/candidates_2007/zhangjobmarketpaper.pdf

It will be interesting to see how the world economy evolves at it adjusts to the China reality with the world's largest population but a different kind of economic model.

I am reading a book, “The Bottom Billion Why the Poorest Countries are Failing and What Can Be Done About It" Paul Collier. I have not finished it yet but so far it is interesting and I would recommend it to anyone interested. Paul Collier is a Professor of Economics and Director of the Center for the Study of African Economics at Oxford University as well as a former Director of Development Research at the World Bank. Collier points out that world poverty is falling quite rapidly for about 80% of the world. The real crisis lies in a group of 50 states comprising the bottom billion people. The problems these states face defy traditional approaches to alleviating poverty.