I'm trying to reconcile the idea that the USDA sets prices when the prices are set by sales and purchases in the exchange markets.I get that Rob, but you’re acting like the free market and supply and demand are dictating prices and that’s just not true. “Prices are determined” by supply and demand. That’s a trick of words. The USDA looks at market data and sets prices based on a algorithm with metadata in a software program. It’s still a price able to be manipulated artificially. You seem to think that farmers inherently have money, but that’s backwards. Only people with a lot of money can be farmers now, so a lot of farmers are rich. It’s corporate farming. The prices have been purposely squeezed based on simple math of production/acre to set the economic conditions to force the need of a ton of land and bulk farming to make money, squeezing out family farms. Every dumb farm hick in Kansas figured this out years ago, but why listen to a dumb farm hick?,,,,
That's like saying the government sets the stock price for Microsoft, when it's the market trading that actually does it.
Wheat prices can be affected by government action, but it's the market traders that actually set those prices. And ANYONE can trade in those open markets, just like the various stock markets.
If open public trading drives the prices, how does the USDA "look at market data and set the price based on an algorithm"? What is their actual mechanism to do so? Do they just go in and change the market price at will? Wheat closes at $6 and then opens the next day at $8 with no trading?
if there is an utter glut of wheat, can the government make the price higher, or does oversupply still drive prices down? If there is a shortage, can they force the price to stay low even though demand is high?
I never said farmers are rich. I spoke to the subsidies they receive that (as you infer) can be used to "buy their vote". Pay the subsidies and get another vote for the GOP.
Farming is not a rich man's game, but it CAN be with the right crop. Hemp can get $40,000+ per acre, but I dunno what the COGS is. I'm sure it's a better money crop than corn by far, though.
You state that prices have been "squeezed" on purpose, but that sounds conspiratorial. A ton of land is needed to produce the sheer volume of product that is needed. Just imagine what it takes to provide produce for a single business in a day: Disney Orlando. With up to 200,000 visitors per day, how much beef, chicken, lettuce, green beans, etc. must they go through? Small produce farms just cannot be competitive in a big market. it's not a conspiracy to get rid of them, it's business that has gone on the same way for centuries.
