The deflation report

[ajl]

Yes I know that deflation doesn't exist, however regular gas at UFA Vegreville is 1.326. That actually compares to price levels from a number of years ago. If you remove the carbon tax, which did not exist then, you will find that the underlying rack price lower today. Oats are bid at $4 in Camrose today which is down somewhat from the $9 plus last spring. Apparently hyper deflation is a thing look out below. Farm input costs, just like back in the 80's are the last to go down of course. Ritchie will be busy.

[TASFarms]

Zellers is making a come back. Is that not an example of deflation

[Old Cowzilla]

Zellers is making a come back. Is that not an example of deflation

Zellers is kinda a dollar store of the 70's so maybe tough times are closer than we think.

[furrowtickler]

[furrowtickler]

Fertilizer up again
Herbicides up again

[TOM4CWB]

Interesting chart on commodities:



As we get to Dec22, the year on year change will decide significantly… it is a matter of how these benchmarks are created…

Fear is driving the Fed and the markets…

[furrowtickler]

This needs to sink in with the ag industry as a whole …… as they drive up inputs to unprecedented levels .
For those with poor crops it’s going to be a long winter .

[ajl]

This needs to sink in with the ag industry as a whole …… as they drive up inputs to unprecedented levels .
For those with poor crops it’s going to be a long winter .

This is what amazes me is that the only place there is inflation is ag inputs. This is true almost all the time. Collusion among suppliers is well tolerated in the canuckistanian ag space apparently. My barometer of inflation, pump gas, can be had around here in the $1.20's now.

[AlbertaFarmer5]

This is what amazes me is that the only place there is inflation is ag inputs. This is true almost all the time. Collusion among suppliers is well tolerated in the canuckistanian ag space apparently. My barometer of inflation, pump gas, can be had around here in the $1.20's now.

Natural gas is a major input into most of our Ag inputs. And a lot of the places that make those inputs also import most of their natural gas. And a lot of fertilizer used to be made in those same places. In the case of europe, they have chosen to keep the lights on over making fertilizer.

This is one of those hypothetical scenarios I had often wondered about. If push comes to shove and there isn't enough of something to go around, would society have the foresight to make sure that agriculture gets first priority so they can continue to eat, or would they put their own short-term comfort and convenience ahead of the actual necessities of life?

I think we have our answer playing out in real time in Europe right now. Greenhouses shutting down because they can't get energy, or reselling their energy because it's more profitable than making food. Fertilizer plants shutting down, etc. Personally, I was more optimistic that we would do the right thing.

[shtferbrains]

All talk about EU and Ukraine but virtually no mention about China.
That's the big gap in input shortages and about everything else.
They are going through one of their weird authoritarian periods.
This one is called "covid zero". Lockdowns and mandates take priority over all else. No end in sight.
Feeding the people could easily become more of an issue. Their economy had some problems prior to this.
Are they the 2nd largest economy?
A return to totalitarian rule at it's worst.

[AlbertaFarmer5]

All talk about EU and Ukraine but virtually no mention about China.
That's the big gap in input shortages and about everything else.
They are going through one of their weird authoritarian periods.
This one is called "covid zero". Lockdowns and mandates take priority over all else. No end in sight.
Feeding the people could easily become more of an issue. Their economy had some problems prior to this.
Are they the 2nd largest economy?
A return to totalitarian rule at it's worst.

On the ag input side, I lump China and Europe together, just for different reasons. China's is more self-inflicted, with the lockdowns etc. Even having put outright bans on fertilizer exports. They import much of their energy, and even their domestic energy production costs have gone way up.
Some analysts are going as far as to suggest that China is enforcing these lockdowns because of shortages of energy and inputs and budgets. So if you lock down the population they don't consume as many of these things. Doesn't exactly seem like a good long-term solution. The base ingredients for nearly all of our inputs regardless of where they are made or sold, come from china.
The only country even remotely capable of scaling up production to meet the shortfall on short notice would be Germany. Who can't afford the energy or the natural gas inputs right now.

Long story short, I don't buy the theory that we are being gouged for inputs when you look at the big picture in the rest of the world.

[AlbertaFarmer5]

Tying the last three posts together, one might go as far as to suggest that China may have actually been putting food production ahead of the comfort and wants of their population. Banning fertilizer exports, hoarding food and inputs, diverting huge resources to attempt to mitigate the effects of the current drought. The lockdowns may even fit into this category. It seems that they are prioritizing food production as opposed to Europe.

[LEP]

I don't know, but if we had a government that was led by knowledgeable practical people wouldn't they encourage or incentify industry/business to find local solutions to imported essential items? Maybe even self sufficiency in energy and fertilizer, herbicides, etc.

Let's make sure we aren't reliant on imported phos and nitrogen. N is easy. Phos needs work.

[TOM4CWB]

Tying the last three posts together, one might go as far as to suggest that China may have actually been putting food production ahead of the comfort and wants of their population. Banning fertilizer exports, hoarding food and inputs, diverting huge resources to attempt to mitigate the effects of the current drought. The lockdowns may even fit into this category. It seems that they are prioritizing food production as opposed to Europe.

FedEx pulls forward advice on earnings…20% down… closing offices and

Economy sputtering…
Cdn$ lowest since 2020…75.2 Dow down 400 more…



If the central banks use a sledgehammer on our economy… we will have difficulty… as Fed government spending seems without restraint…