16-04-2003, 09:44 AM
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Wheat prices
In article , writes:
If a lot of people are planting it who usually don't,
doesn't that imply a forthcoming glut? What do the
people who are suddenly planting wheat USUALLY plant?
A lot of farmers around here lucked out. They grow a lot of ryegrass
seed. I think 90% of the US supply of grass seed comes from Oregon.
Farmers contract with seed companies to raise specific strains, then
clean, bag and label it for the seed company. Terms are COD.
Well, the seed companies contracted too much acreage, so the farmers got
stuck with the seed, sitting in their warehouses taking up storage while
not getting paid for their crop. Some farmers had to wait 2 years before
they could deliver the crop and collect their money. That hurts. How
many businesses do you know that could wait 2 years to collect their
annual receipts?
The farmers got peeved at the grass seed companies, and refused to plant
any more grass seed without contractual payment dates and storage
charges. When the grass seed companies dragged their feet, the farmers
planted wheat instead. You always knew I was getting around to the
point, didn't you?
It worked out pretty good. The farmers have wheat to sell during a
market runup, and the grass seed companies are in short supply again and
being a lot more conciliatory about payment dates.
In the Palouse, wheat rotates through with millet and barley. In other
areas, rotation crops are corn and soybeans.
The crop failure in Australia means the northern hemisphere will be able
to get a crop in and harvested before the southern hemisphere will be
able to respond. Winter wheat is going in now in Canada, Europe and the
USA, but won't be planted in Australia and Argentina until 6 months from
now. The Ukraine had a bumper crop of wheat this year, and the wheat
shortage is going to do wonders for their economy.
--
http://home.teleport.com/~larryc
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