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Prices of wheat and other grain OT somewhat

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HENRY E NC

02-10-2008 19:39:41




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I just got off the phone with my oldest son who is a manager for a bakery supplier. He was telling me that rye flour is almost a thing of the past and they are the largest bakery supplier in the nation. He tells me that they are not going to buy rye this spring because of the prices. ALSO, wheat flour has gone from $22 a hundred to more than 50 in the last six months and they are expecting it to hit $1 PER POUND by June. Shortening has gone up 100 % and sugar will now follow because of the SC refinery fire. Where will this end. He says all the large milling companies are trying to get the land bank stopped. Most of this is because farmers are planting corn for ethanol conversion, and the crop failures in the world last year. These are facts, what do you all say. No snipes please just some honest discussion. When you start paying $5.00 for a loaf of bread you will feel the effects. Henry

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NEsota

02-11-2008 09:20:42




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  
Talked to a friend over the weekend who is a member and in the Pit at the Minneapolis Grain Exchange. He said that the "synthetic price" (That is a maneuver which involves using options to trade outside the normal daily limits.) was over $21.00/bu. Friday, for the March contract. He is of the opinion (But one never really knows.) that the Canadian Wheat Board and the commercials are short. My expectation is that some big players will get hurt. Please do not make any financial decisions based on what is said above.

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dave2

02-11-2008 07:13:05




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 Re: Prices of wheat and other grain OT somewhat in reply to dave2, 02-10-2008 19:39:41  

flying belgian said: (quoted from post at 07:58:31 02/11/08) I have never tried it but have heard you can "grind" wheat into flour with a kitchen blender. Does any body know if that works?


Don't see why not. You can go onto organic websites and get little presses and grinders that are hand operated. I've got a press and a grinder in my feed room that I paid about 15 bucks for the both together. maybe I'll clean the mill up and play a little. I don't pay much attention to wheat, but buy oats and barley for the horses and press it. Oats hasn't done much, but I paid 7 bucks for 50kg for barley in mid 06, 11.50 this time last year, and 22.00 now. Cheaper to buy ready feed now. Beer prices have gone up also (because of the barley). Funny thing is, I buy directly from the coop and there is a 7 buck difference between 3 locations within 50 miles of each other. A few years ago the big move here was toward furnaces that burned grain instead of wood, chips, pellets, and oil. Those stoves are a little dusty now.

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MarkB_MI

02-11-2008 03:22:57




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  
There is a historical precedent for this. A worldwide shortage of grain during and after World War I led to high wheat prices, which in turn led to overproduction and subsequent collapse of the wheat market. As a result, millions of acres of wheat ground were abandoned. This, combined with drought, led to the Dust Bowl and was significant factor in the Great Depression.



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Tradititonal Farmer

02-11-2008 04:56:42




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 Re: Prices of wheat and other grain OT somewhat in reply to MarkB_MI, 02-11-2008 03:22:57  
Its happens every 30 years hence the '30 year commidity cycle' late teens as you say late 40s,
late 70's and probably 09-10



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Tradititonal Farmer

02-11-2008 00:14:39




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  
Well the smart guys already saw this coming and have their garden plots ready to go this Spring.
The lazy and those that watched football and played video games last Fall instead of keeping abreast of the financial goings on in the World will be 'surprised'.A little grain to grow, a $150 grinder and you can have any type flour you want for a few cents a pound.Thresh it out in front of a floor fan.How many will do this instead of moaning and groaning about the high cost of bread?

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flying belgian

02-11-2008 06:58:31




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 Re: Prices of wheat and other grain OT somewhat in reply to Tradititonal Farmer, 02-11-2008 00:14:39  
I have never tried it but have heard you can "grind" wheat into flour with a kitchen blender. Does any body know if that works?



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T_Bone

02-10-2008 21:58:46




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  
Wheat is limit up to night on the KCB and almost limit up on CBT.

They say there's going to be a world shortage of grain for the next 2yrs according to the AP news wire.

Gold up, Oils up big time. Looks like the Dow is going up tomorrow.

T_Bone



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paul

02-10-2008 21:44:29




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  
My understanding is there is 5 cents of wheat in a loaf of bread.

A penny's worth of sugar in a cookie.

If prices of these crops doubled.....

Why should the price of bread or cookies also double?

Someone between me (the farmer) and you (which includes me) seems to be making a pretty handsome profit aside from the cost of the raw material?


These grain prices will hurt livestock producers. So much of their use is raw grain, price increases hurt.

Meat & milk have good reason to complain.

Baked goods & the like - most of what one pays is for middle processing, very little goes to raw materials. General Mills & the rest seem to have record profits every time grain goes up - they blame the farmer. Box of Wheaties goes up 25 cents, the 5 cents of wheat cost 7 cents now. Who made the other 23 cents????? Hum.

That's my take.

--->Paul

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JMS/.MN

02-11-2008 07:13:43




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 Re: Prices of wheat and other grain OT somewhat in reply to paul, 02-10-2008 21:44:29  
Wheat weighs 60 lbs to the bushel, but I understand that you get 70 one lb loaves out of a bushel because of the extra ingredients that are added. So the bushel price of wheat, dived by 70, equals the cents worth of wheat in a loaf of bread. $3.50 wheat would translate into 5 cents of wheat in a ONE LB loaf. $14 wheat would be 20 cents of wheat in a loaf. Processors take advantage of the ignorance of the public.

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HENRY E NC

02-11-2008 07:01:29




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 Re: Prices of wheat and other grain OT somewhat in reply to paul, 02-10-2008 21:44:29  
Here is a typical bread formula---<>100 lbs flour > 65 lbs water<> 4 lbs shortening< 4 lbs sugar< 3 lbs salt
many other trace ingredients that cost lots of money tp keep bread soft, kill mold and rope, etc. You figure it out. A 1 lb loaf will be scaled at 20 ounces due to loss during processing. Now, you truck your wheat to the elevator, they truck it to the mills. Have you ever seen a flour mill? very impressive and costly operation. From there it is trucked to suppliers and from there it is trucked to bakery. Figure out what costs more?

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paul

02-11-2008 22:26:09




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-11-2008 07:01:29  
Henry, your original message contends that ethanol (made from corn, which does not much compete with wheat, as corn needs water, wheat does not, so there is only minor overlapping ground) and the high cost farmers are getting for grains is to blame for the high cost of flour & bread.

I disagree with you on that on both points, as I explained.

Here you are saying it costs a lot to turn raw grain into flour. I agree with you on that. Energy, especially transportation, has grown tremendously in price. Govt regulation has added costs at every single turn in manufaturing. And so on. Then most middle processors tend to work on a percentage, so if it costs 2x as much to process their step, they seem to charge double their fee as well, adding to their profit & saying what you did - oh it's all someone else's fault the price went up.....

I can agree with you on this costs and profits of middle men have gone up.

But, now, you have said 2 different things, so we are very clear here;

I still disagree with your original message.

Ethanol has little to nothing to do with the price of flour made from wheat or rye. Heck, I live in the shadow of 5-6 ethanol plants, and wheat planting is increasing the last couple years around me, from almost zero to at least we see a wheat field every now & then.

Very little of the cost of a loaf of bread gets back to a farmer, very much of the cost of a loaf of bread goes to transportation, middle men processing, and advertising.

I think it is poor of you to try to blame farmers or ethanol for the rising cost of bread, as there is no connection at all.

No problems, I'm just chatting with you because it is about zero here for temp, got not much else to do. Don't mean to harp and not ranting, just explaining my point of view. :)

--->Paul

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Tradititonal Farmer

02-10-2008 23:53:16




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 Re: Prices of wheat and other grain OT somewhat in reply to paul, 02-10-2008 21:44:29  
Exactly right cost of ingredients goes up 30 cents a loaf they will charge $1.50 a loaf more.Same with diesel fuel at 10 MPG a 300 mile trip takes 30 gal at $1 or $30 worth, at $3 gal it tkes $90 worth you can bet the trucker will charge you $150 more 'because of the high price of diesel'.All the heck raising is just to be able to really raise prices without a lot of customer resistance. The result of all this plus the $600 gov't give away will be increased inflation which hurts us all.

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kyhayman

02-10-2008 20:44:14




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  
The market is sending a loud clear signal to the spring wheat belt to plant wheat. Also sending a signal to those of us in the winter wheat belt to go ahead and buy expensive nitrogen and potash to fertilize wheat.

Its classic supply and demand at work. Its not that the market wants that much more wheat, its that it doesnt want to see any more acres shift to corn.

Yet the best cure for high prices is high prices. There is already talk of letting some CRP ground bid out early (the most recent edition of Farm Journal). Already the livestock sector is feeling the hit. The hog complex is imploded. Lots of cheap pork hitting the market. Cattle cant be far behind. Breakevens are running in the high 80s right now on fat cattle. Were it not for excess capacity at both the feeder and packer level the cattle market would already be in a downturn. Yet we are still killing cows and heifers at a record pace. No sign of herd expansion.

Between fuel and food prices inflation is sure to follow. I'm not a nay sayer in that the sky is falling. Once inflation really takes hold the fed will have no choice but tighten the money supply. A strong dollar will sure kick the chair out from under the land bulls, lower energy prices, and as soon as crude gets back down under 50 dollars watch the corn market collapse since nobody will want any more ethanol than they have to have. That doesnt even address what will happen to our grain exports if the dollar gets stronger.

Without a doubt its going to be a wild ride, but thats when you can make money if you are flexible and decided to be a goat instead of a sheep. Following the crowd just gets you burned.

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flying belgian

02-11-2008 07:08:07




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 Re: Prices of wheat and other grain OT somewhat in reply to kyhayman, 02-10-2008 20:44:14  
I have always raised some spring wheat every year. I looked at it as more a ground enhancer than a profit machine. Figured I made the money on next years corn crop. I'm the only non-livestock farmer in 100 miles to raise wheat. neighbors always laughed at me for "waisting" my time and ground with wheat. They are not laughing any more and some are asking me for info in raising and marketing wheat.

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Texasmark

02-12-2008 16:56:27




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 Re: Prices of wheat and other grain OT somewhat in reply to flying belgian, 02-11-2008 07:08:07  
Followed all these comments and could comment but won't.

On your wheat you plant and your comment. Years ago (1960 timeframe) here in N. Texas crop yields started to drop significantly and Texas was having to import grain to support demand.

A PhD put together a group of agronomists and formed the Texas Agricultural Research Station at Renner, Tx., paid for by farmers and donations, (gobbled up by Plano.....almost, by now).

Anyhew wheat as a rotational crop, and the fodder (stemmy residue) from it's production was found to be essential to soil survival. I couldn't believe the quantity of organic material soil (heavy clay) soils need for maximum productivity. It was like a couple of tons per acre per 3 years. Amazing. It was 3 years because wheat was grown in rotation with grain sorghum and cotton.

It did the trick and convinced farmers to plow it in rather than burn it off and also proved that proper fertilization yielded 6x the profits for x bucks invested in fertilizer.

So, you are right-on with what you say.

Mark

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dhermesc

02-11-2008 06:09:24




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 Re: Prices of wheat and other grain OT somewhat in reply to kyhayman, 02-10-2008 20:44:14  
"Between fuel and food prices inflation is sure to follow. I'm not a nay sayer in that the sky is falling. Once inflation really takes hold the fed will have no choice but tighten the money supply. A strong dollar will sure kick the chair out from under the land bulls, lower energy prices, and as soon as crude gets back down under 50 dollars watch the corn market collapse since nobody will want any more ethanol than they have to have. That doesnt even address what will happen to our grain exports if the dollar gets stronger."

I agree totally. But I have a slightly differant take on it. The strong dollar is what has kept imports cheap and our exports expensive. After 27 years of this policy the country is in a world of hurt to the trade imbalance. The trade imbalance is what has built up pressure on the value of the dollar and other nations are finally starting to realize it.

Raising interest rates may defeat inflation at home but not be enough to induce foreign money to buy up US trade securities propping up the exchange rate of the dollar. The "subprime" mortgage screw up is financed by foreign investors - after losing their arses they may not be so willing to keep sending their money to the US even with higher interest rates.

As for grain prices, the world market determines the value as long as a strong dollar isn't forcing down US prices. I'd start paying more attention to world supplies and growing conditions in other countries.

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j heitkemper

02-10-2008 20:35:30




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  
O.K. No Snipes ,, Though I can concur and Add a few ,taking in 35 bu wheat to help the cause in the a.m. , that price has moved $2 up since JAN 1 ,fall beans sold for $8 , just cleaned out the rest and got $ 1325 per hundred Bu ,Hay and corn at $5 per bu and Sq .Bale.....THAT IS ... If You have any to Sell , because of drought , Cow Calf pairs will cost $ 1500 next summer even if We get another drought . Cow s are scarce , PRECIOUS Horses nearly outnumber cows in this county..... . NOW .You have to live in Europe to eat a horse , chuckle ..... ..... .. Big $$ in farmer pockets ???,,,,, ,,,,,Check Again !!!, YOU GOT TO HAVE IT TO BE ABLE TO SELL IT!!!!! INPUT COSTS HIGHER THAN h&(), FERT cost and AVAILABILITY , INSURANCE , CO PROPERTY TAX , SEED cost AND AVAILABILITY ?, REPAIRS COST DUE TO SQUEEZE MERGERS ,NOT TO MENTION FUEL AND LABOR ... Steel , Fert,ect. Free trade With China needs QUOTAS SLAPPED ON IT NOW THAT HELP AMERICA . Same with NAFTA , (we got the shafta ). go green All the Way!! ,School is not out Yet ,In My BOOK ,on Global Warming ,, However , To IGNORE warning and arrogantly stomp the greenhouse GAS peddle is STUPID . REAL TRUE SCIENCE IS OUR BEST HOPE . I know All of Us are doing are level best , But somewhere higher up Leadership And Direction Is LACKING , Perhaps in leiw of HIGHER PROFITS . I could preach and Rant all nite , My 2 cents . Let others chime in . Jim

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oj

02-10-2008 20:08:23




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  
As of tomorrow (Monday 11th Feb), all three US wheat exchanges (Chicago, Kansas and Minneapolis) are changing the daily limits on wheat from 30cents per day to 60cents per day after several weeks of nearly constant limit up trading days. Minneapolis has rallied from close to $10/bus to $15/bus plus since Jan 1 of this year. The new rules also allow for greater than 60cent daily limits if certain conditions are met... The markets are going to be interesting for the next little while.

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C-man

02-11-2008 06:13:29




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 Re: Prices of wheat and other grain OT somewhat in reply to oj, 02-10-2008 20:08:23  
You said that they are going to raise the limit to 60 cents a day. I hope it ISN'T to get the price DOWN. The price is NOT going to stay like it is forever. However, the price of fuel and fertilizer probably will. So when wheat goes back to the $3.50/bu. range and fuel stays at $3/gal., fertilizer at $550/ton+. what is going to happen. Personally, I think there is going to be a BIG wreck. We sold wheat off the combine the middle of July 2007 for $4.99/bu. Was waiting to get $5/bu. but it looked like the next day it was going to go down. Sold some more in October for $5.92. Was waiting for $6, but my wife said it was NEVER going to hit $6. I have to tease her everytime the market goes up. She's not seeing the humor anymore!! Anyway, we had a little overrun on our contract, and got $7.47 for that. Now we were very satisified with the prices we recieved, but if we would have waited..... We would have been able to do a much needed update on several pieces of equipment. When I checked the local elevator last Friday, cash prices were over $12/bu.!! But no one has any around here. Can contract 2008 crop for over $10/bu., but we don't know if our winter wheat has winter killed, as some of it didn't look very good last fall. So I think, or I should say I KNOW, wheat prices are NOT going to stay at the level they are for very many years. It is just a matter of time before the prices drop like a rock. Just don't know WHEN and how FAR!!!

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Randy S

02-10-2008 19:52:39




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  
When those prices come to us i know ill have to revert back to eating cornbread that is cooked from corn that i grow and have ground into meal. This along with eating what i grow and put up my self.

Old Hank Jr. got it right. A country boy can survive.

We are going to have to be self sufficient, im not sure what all the people in the big citys are gonna do. That is the scary thought.

If the price increases with out an income increase to match dont stop we wont be safe in our homes anymore, we will be robbed for our food.

just my 2 cents
Randy

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flying belgian

02-11-2008 07:15:48




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 Re: Prices of wheat and other grain OT somewhat in reply to Randy S, 02-10-2008 19:52:39  
I agree with you. If you have food and your neighbor in the city does not, that situation will not last long. People will kill for food.



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Howard H.

02-10-2008 19:48:17




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 Re: Prices of wheat and other grain OT somewhat in reply to HENRY E NC, 02-10-2008 19:39:41  

Most of the immediate area around us has slim to no dryland wheat because of lack of moisture. Some irrigated, but most folks save their water for corn here...

I know I only see a tiny sliver, but it may go higher, yet, if ours is any indicator of the coming crop...

Howard



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