Quote:
Originally Posted by Otto
Diesel John, I'd like to get your farmer's perspective on a couple of things:
First, you mention the commodity problems with buying farmer's crops later this year. Can you elaborate on that?.
|
Normally i can call the elevator on the river and sell my crops up to two years in advance. for example ,normally $3 is a fair price for corn, so when the price got to $3 in the spring of 2007 alot of producers sold corn out one and two years ahead. Fast fwd to June 2008 by a series of unlikely circumstances corn is over $7. When an elevator buys on fwd contract, they sell on the board to stay balanced but the price went against their hedge, normally no problem. Normally when actual crop is delivered they pay the producer
the $3 contract, sell the grain for $7 and use the difference to pay off their hedge, but this year the $4 difference cost them more interest than they could afford. millions a day. So they all just stopped buying grain. And they will not even bid on grain until 60 days before the actual delivery date. So the
commodities markets have failed to provide for the future, the very reason they were created. There are the options markets but they generally a lose, lose.
Quote:
Originally Posted by Otto
Second, Oregon State University is doing algae biodiesel research, with an eye to local production and consumption by farmers such that the stuff does not need to be shipped and distributed around the planet.
See: http://www.wired.com/techbiz/media/news/2006/04/70702
I'd be curious that if such a device worked, how would farmers react to the idea of making their own fuel on-site or in the immediate neighborhood. |
farmers are already making their own bio-diesel, methane, and ethanol.
the byproducts of which are oxygen, cleaner air, and high protein food.
farmers adapt every season to changing parameters, that is what they do.
farmers pay a percentage of every bushel sold to research. it is called the checkoff.
the farm bill is miss named, it is a food bill.