Sunday, June 16, 2019
Price of corn per bushel
The steepness of the price rises can be breathtaking. The price of corn rose from $3.70 a bushel to $5.88 (almost 60%) in the time span from July 19, 2010 to November 1, 2010 and then stayed above the current price, $4.50 until the middle of 2014.
From the middle of 2014 until recently it wandered around between $3.50 and $4.00 a bushel.
What is critical to understanding is that farming is a high fixed cost business. Small movements in price result in large changes in net profit or loss.
Unless, of course, you are one of the farmers who has not product to sell because you got washed out or drought killed your crop.
From a consumer standpoint, $8 corn makes for expensive pork and chicken but if your only concern was to eat enough calories to live, $80 would buy you 3000 Calories a day for a year.