• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

has the bubble burst

Some countries are hurting just like at any time in history, someone is declining while someone else is improving. With China on the rise of economic improvement with their population, it will have a large impact on trade whether you trade directly with them or not.

The world dynamic is changing. There will be increased competition for resources when larger populations now have enough finances to afford a seat at the table.

What is the most concerning about price stability is preventing a real or perceived tainted export product- such as BSE, drug residue, etc...

To me the market is like a bunch of gossiping high school kids. Everyone overreacts to any little blip on the radar.
 
Big Swede said:
It seems to me that in the near future if the cost of food gets higher people will maybe decide that food is more important than boats, pools, big screen tvs, cell phones, internet, movies, the list could go on but you get the idea. Americans have been spoiled by cheap food for so long it will be a tough transition for most. Just my opinion.

BAR BAR 2 said:
I agree Swede. My question that I've been asking is this, have Americans become so used to these privileges and luxuries that they now believe they are entitled to them? And if this is the case, will they then turn to our lawmakers to remedy the situation? Are the high prices that we are now enjoying worth possibly more government intrusion and regulations down the road? I understand the economics the rancher has faced and continues to face. I'm just worried about what these prices could lead to in the future.

Both of these posts are right bang on IMO. Never underestimate the "spoiled child" effect, or, "entitlement attitude" resulting from far too many years of having essentials for next thing to "free".
 
burnt said:
Big Swede said:
It seems to me that in the near future if the cost of food gets higher people will maybe decide that food is more important than boats, pools, big screen tvs, cell phones, internet, movies, the list could go on but you get the idea. Americans have been spoiled by cheap food for so long it will be a tough transition for most. Just my opinion.

BAR BAR 2 said:
I agree Swede. My question that I've been asking is this, have Americans become so used to these privileges and luxuries that they now believe they are entitled to them? And if this is the case, will they then turn to our lawmakers to remedy the situation? Are the high prices that we are now enjoying worth possibly more government intrusion and regulations down the road? I understand the economics the rancher has faced and continues to face. I'm just worried about what these prices could lead to in the future.

Both of these posts are right bang on IMO. Never underestimate the "spoiled child" effect, or, "entitlement attitude" resulting from far too many years of having essentials for next thing to "free".

But It doesn't take many nights of going to bed hungry to get folks's attention. You can't eat the satelite dish or the big screen. Maybe if folks remembered that it would be good for everyone.
 
Everything I'm about to say is just my opinion and a few things I've learned while listening to others. That being said, if something doesn't happen, and soon, the consumer will have to start making choices, just like Swede said. But, its going to be in the grocery store also.
Historically, grain and beef prices have run in oppisite cycles. For instance, if corn was down the feeders could pay more for the beef. If corn was up they paid less. At the moment both corn and beef are higher than ever. The bad side of this is people can't live without corn.
I am a certified welder and I have literally worked allover this country. Most of my work was in the upper midwest in ag plants, and most of those were some kind of corn processing plant. Unless a person raises corn or works in one of the plants they usually don't know how many products have some sort of corn in them. There are hundreds if not more products that rely on corn for something. Without corn we wouldn't have any meat on the grocery store shelves, or milk, softdrinks, cereal or even extension cords. Most people don't even think about this, but it's a fact.
I spoke with a good friend down in Texas earlier tonight and we were discussing a mutual friend down there who is buying yearlings. This mutual friend was talking to his feedlot man in Kansas and trying to get a feel for the market. The man at the feedlot told him that in the past all of their choice cattle went back east and the New England states for a higher paying customer base. He went on to say all of their number 1 cattle went into higher end cuts for the average consumer. Not anymore! The choice are still going to the high end customers, but the number ones they are selling are now all going in to be ground up for burger. How can this be sustained? With the price of beef and the price of grain, how will the cheapest cut of beef be able to compete with, say, pork or chicken?
Most of the nation is not your typical rancher who has a freezer full of beef and a pantry full of canned and dry goods. Typically, most families shop for their supper that day, not once a month. The reason for this is, they can't afford to. I understand that it is cheaper to go ahead of time and do your shopping at the big box stores and stock up. But, most families can't go and spend several hundred dollars at once, no matter how much they save. After their bills they don't have that much. When they do get in the store and see that a meal of chicken helper(Eww) is cheaper than hamburger helper, what do you think they are going to pick?
I know the rancher hasn't been paid for his labor cost and these prices are a welcome change, but in the worlds food category how big of a part will we continue to play? As a rule, people have come to expect too many luxuries with no thought of the true cost. Along with that, food prices have not kept up with the times. Now all of a sudden grain prices and beef prices have shot up. The consumer isn't going to say,"well, we've been eating cheap for a long time now, and the farmers and ranchers need this". No, they will say,"I just want some burger. What do I care if it comes from Mexico"? The consumer is the end of the line for our beef, and like it or not, they will have the final say. What's the answer to make everyone happy? I don't know.
 
Everyone has made some excellent points and like BB2 I'm concerned of what may arise from such high commodities prices. Is it actually as simple as supply & demand or is it because the current regime has devalued the dollar by printing money.

A while back I posted in Bull Session a story about Argentina. Their gov was worried about the consumers paying to much for beef.... so they instituted price controls and export limitations. It's worth the read and I'll bump it to the top if anyone wants to read it.
 
I just read that Argentina post. Scary stuff. But it also pretty much eliminates a source of imported beef too.

I read the other day that a huge proportion of American corn goes into ethanol now. It would be nice if someone somewhere had the good sense to drop the ethanol subsidies, and choose energy conservation over hunger.

That would change the whole dynamic overnight.
 
How many acres are now devoted to raising corn for subsidized ethanol?
How many of those acres were once devoted to raising feed or other food crops?
How high would beef be if feed was more moderately priced?
If the high beef prices continue, will the government step in with regulations to lessen the sticker shock for consumers?
 
>>How high would beef be if feed was more moderately priced? <<

If corn were $3 a bushel, 5 weight steers of any color (I don't care if they were purple with white faces) would be selling for north of $2 per pound.
 
From a blog I follow (NG pipeline scheduling is often the canary in the coal mine as far as what is going on in the "real economy"):

>>>Sunday Night Economic Assessment
http://1.bp.blogspot.com/_LV9WFFJ7JSU/TUbASObAVGI/AAAAAAAAATA/zwBz-on8HCk/s1600/Economic.png
(If the chart above does not appear, go to http://robry825.blogspot.com/ )


The US Industrial economy held steady last week (if pipeline scheduling is correct), while consumer spending.continued to grow. In the dailies (which I am including for this weeks post) there seemed to be a good, positive reaction in both consumption and production midweek following the Presidents State-Of-The-Union address.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) following three weekly advances in a row was unchanged last week (121.4 vs last weeks record 121.4). In its dailies (See the "Part 7" posts on the Investor Village site) the index started the week soft but firmed extremely sharply with the Wednesday/Thursday scheduling. Fridays raw gas-flow tracking picked up 2.07 Billion Cubic Feet scheduled for delivery to US factories, a record for the tracking model.

The Consumption Index also rose (for its second week in a row) to 144.2 (from last weeks 142.9, and just shy of its record 146.5 high). In its dailies the measure (echoing the Production Index) also reached record levels on Thursday and again on Friday.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index) continued in its long-term decline.

Overall, the recovery appears strongly supported by last weeks post State-Of-The-Union surge, buoyant consumer-spending, an uncharacteristically-large lead in the Consumption Index over the Production Index, and continuing declines in the Inventories measure.


-Robry825



Daily Tracking (Natural Gas Scheduled Deliveries)
=========================================

Industrial Paperboard
(Production) (Consumption)
------------------ ---------------------
01/21/11..........1.915..(BCF)........31.94..(MMCF)

01/22/11..........1.951....................33.90
01/23/11..........1.958....................33.80
01/24/11..........1.950....................33.80
01/25/11..........1.983....................32.42
01/26/11..........2.000....................37.10
01/27/11..........2.051....................41.38
01/28/11..........2.073....................42.63

01/29/11..........2.064i...................39.36i
<<<<<<<
 
As a general rule, isn't there usually a brief rise after the State of the Union, regardless of the econmic situation?
 
Kato said:
I just read that Argentina post. Scary stuff. But it also pretty much eliminates a source of imported beef too.

I read the other day that a huge proportion of American corn goes into ethanol now. It would be nice if someone somewhere had the good sense to drop the ethanol subsidies, and choose energy conservation over hunger.

That would change the whole dynamic overnight.

Just don't suggest that at a corn growers meeting . . . :?
 
I grow both corn and cattle, so I'm kinda caught in the middle. The one thing I wonder about in regards to the corn thing is what impact has increasing production had on supply. What i mean is, as the ethanol industry has matured, has increasing yields matched the increasing demand for corn?

I'm in total agreement about how spoiled most Americans are. My wife and I just had twins (our first kids) about 3 weeks ago, and I scares me what the future holds for them.
 
One possible result of the "food riots" will be further pressure by certain Countries to drop the USD as the base.

What will happen to North American ag. prices if that happens?


America and the Middle East Food Riots

First, because of the enormous deficts run up by Obama administration and the Democrat controlled Congress, the Federal Reserve has had to effectively print trillions of dollars which have flooded the global market. Commodities are priced in dollars, consequently emerging markets throughout the world, and the food sector in particular, are suffering from rapidly rising inflation.


The second factor in the overall global food situation is the American decision to, in essence, burn food in its cars, a policy championed by the environmentalists since the 1990's. In 2010 the United States produced 13.1 Billion bushels of corn, of that amount 4.2 billion bushels went into ethanol (33% of total production). That represents in 2011, a year in which global stocks are down nearly 8%, over 14% of all corn grown in the world being used in the most inefficient manner possible-American gas tanks.

http://www.americanthinker.com/2011/01/america_and_the_middle_east_fo.html
 
Texan said:
http://www.youtube.com/watch?v=UBhQhKWOZmk

I hear that train a comin'
She's coming 'round the bend
I aint cashed a calf check in...I don't know when
I'm stuck in debtors prison
Time keeps drag-in' on
When I hear that train a comin'
I hang my head and moan.

When I was just a baby
My momma told me son
Every man's a cowboy
And cowboys ain't no fun
But I bought a calf named Reno
Just to watch him die
When I hear that train a comin'
I hang my head and cry

Cattle and corn both up today. Seems to be a trend.
 

Latest posts

Back
Top