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Message: Re: Agrium shutdown notice

tau
Dec 12, 2008 05:12AM

Speaking as a farmer, the reality that everyone needs to eat isn't much of a financial safety net for the industry. Grain and oilseed prices on the prairies are down about 50% from their highs last winter (which were really high!). Canola is a bit of a bellweather, and it is at $8 a bushel or so locally, which is somewhere around a long term average. Fertilizer prices are still waaaay higher than long term, so if we buy at todays fert price and sell at todays canola price, we are losing money. Fewer of my neighbours put on fertilizer this fall, as well as my father (I am organic, no fertilizer). I told my Dad that I thought that the only way fertilizer will be as high in the spring, when we really need it, as it was in the fall, was if grain prices rebounded. Otherwise, with similar grain prices, fertilizer will not sell at current levels. I find few who are bullish on grain prices, tho when everyone is on one side of a boat, it often goes the other way, right?

Last spring, everyone called this an "all in" year, referring to betting all your chips at poker. Our inputs were so high, and so were prices. We had to spend so much to put the crop in, we couldn't afford a crop failure, or much grain price reduction. Most places had decent crops, we were above average, but prices have certainly declined for what was not pre contracted. As far as livestock, it has been poor for yrs, with the price we get for finished (slaughter) cattle being the same as when I was in highschool in the '80's. Hogs are no better. Worse, I think.

Don't know if that helped or not! Keep eating, and if you can find a farmer that sells direct to the consumer, you will likely get a better deal, so will he, and I bet you will find the food better quality.

Cheers!

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