"Ted Mittelstaedt" wrote:

They do not want to go out and separately negotiate orders of
corn of this magnitude from 100 separate small farmers who
can each only supply a ton of corn. This is why the big
agribusinesses thrive, it is the presence of a market.

Corn is a commodity. It is sold at market prices. The only leverage a
farm has is to store its grain until the price goes up or sell futures.
Both small and large farms can take advantage of this through co-ops.
The difference is that large farms frequently don't go through a co-op
and are more apt to have their own storage facilities. Unfortunately,
the misguided idea of using food for energy with little accommodation
for supply has created high food prices and high energy prices.

Here in Pennsylvania, ethanol plants are located near coal mines since
the transportation of corn is much cheaper than the transportation of
the coal needed for ethanol production. Identical plants are used for
either gasoline additives or vodka. The agricultural industry is using
different varieties of corn for ethanol and food, so futures are very
popular.

And large farms don't irrigate when there is no rain, nowadays?

This statement is grossly false in the West where many regions are only
agricultural because of irrigation and there are very large farms. When
you fly over the West you see the landscape dotted with large circles of
green where irrigation systems make agricultural regions in what is
otherwise a dessert or prairie. When I moved from the West Coast to the
East Coast, I was surprised that many farms in the East didn't even have
access to irrigation. This is standard in the West. If you buy a farm
in the West, you buy irrigation rights or the deal doesn't go through
since the farm would be worthless. In the East they cry drought and
ask for disaster assistance.
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