Posted by ss55 on March 19, 2018 at 11:07:23 from (63.147.218.40):
In Reply to: Farm Problem posted by VADAVE on March 19, 2018 at 10:08:57:
Nearly all farmers sell to the commodity markets, not to the public.
It seems that whenever farm commodity prices rise, too many farmers bid up the cost of inputs to match until their profit margins are nearly the same as they were before. When commodity prices fall, input costs don't fall anywhere near as much and the less efficient producers can no longer stay afloat.
Very few farms sell directly to the public, we sell our production to meat packers, food processors and grain export companies at commodity market prices. Those companies are better positioned and are better skilled to maintain their profit margins. When their profits get squeezed, they drop their bids for farm commodities and it is the farmers that get squeezed.
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