Bob Brinker: Market Savant & Radio Host Message Board

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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Kirk © who wrote (6458)	8/6/1998 1:05:00 PM
From: Trebor	Read Replies (1) of 42834

>They overproduce and the government steps in and buys up their surplus so they don't have to take a loss...< If you are referring to the recent USDA purchase of a few million bushels of grain to give to Africa, that's nothing more than congressional and presidential window-dressing to give the impression they are dealing with the problem. It may raise the price of grain a few cents, but it is still below the cost of production for most farmers. Wheat has gone from $5.75 per bushel in 1997 to $2.50 now, the lowest price since 1991. Corn has gone from $4.50 in '97 to $2.11 now. This graph shows the precipitous drop in corn prices: usda.gov And this graph shows the rapidly widening gap between what farmers receive for their efforts vs. what it costs them to produce it: usda.gov And if we're paying farmers so much to "over-produce", why are experts predicting a $7.5 billion decline this year in farm income -- more than seven times the cost of the GM strike? Plus it's not a matter of over-production, it's a matter of declining exports due to the Asian situation, the high price of the dollar, etc. Cotton growers aren't over-producing, they are plowing up their crops in California and Texas due to both poor yields (too much rain in CA, not enough in TX) and the fact that the price they will receive this fall is less than their costs to bring the crop to harvest. Where you got the notion that farmers "don't have to take a loss" is beyond me. Anyway, my intent was not to stir up a debate on farm policy as much as to lament the fact that this story and other equally important ones are being neglected because our news media (and apparently the American public) can't focus on anything larger than Willie and his wee wee. It's a sorry, sorry chapter in American history. Can we agree on that much? Your other points need addressing too but right now I've got to go stuff my face with cheap food.

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