K-State Ag Today: Understanding fluctuating grain prices
9:28 a.m. Friday, September 5, 2008
Rising grain prices have brought profit to some, and pain to others, but change is inevitable.
Barry Dunn, director of Texas A & M's King Ranch Institute for Ranch Management, and a guest speaker at this year's K-State Beef Conference, says profits often get pumped into research and technological developments.
"And we could see yields of major crops increase dramatically," Dunn said. "Well, if they do, we could see a drop in price, a dramatic drop in price, because the commodity prices are extremely sensitive to supply, and a one percent change in supply can change price 6 or 8 percent. So, it's not something to be taken lightly."
Dunn adds that the most dangerous assumption a producer can make, is the assumption that things will stay the same.
"The marketplace will respond, and if history has any message for us, it's that if there's a dollar of profit out there, every farmer in America is going to go after it, and the window that they're going through gets pretty crowded, and price drops," he said.
You can find more information at your local extension office or at the links below.
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