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Joined 2 years ago
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Cake day: June 13th, 2023

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  • Right, so up until the point the USDA PLC programs get exhausted (afaict ~$25B/yr), they compensate for the difference between the price floor (not sure if we’re above or below that now) and market price. But that’s a subsidy to the farmers, not an effect on the market price - the expense comes to taxpayers. And sometimes, they scoop up surplus through CCC, then remarket it elsewhere, an indirect/artificial market mechanism, which can include exports.




  • It depends on the market. If producing less food with the same resources costs more, prices will rise–especially on large commercial farms, which dominate the U.S. agricultural sector.

    The part you quoted from what I said was in reference to an agricultural buyer being lost. There are other reasons to anticipate the costs of inputs increasing, but I’m going through analyzing factor by factor (descending analysis) and all of a sudden we’re jumping back up to the top to talk about something else.

    Re: grocery chains (not USAID) and futures contracts - not sure how this ties in either, we’re talking about USAID, which AFAIK does procurement through a bidding process for direct purchases, not via futures.


  • I’m not sure what your main point is here. I was responding to you grouping together a labor shortage and a demand shock as - from what it sounded like - a reason to expect high prices. But demand shocks lower prices on the consumer side of food production, as opposed to raising them, because the food at that point exists, and whoever has it needs to sell it, more desperately than they were before.


  • True, well, I mean, take the effects I described and apply them to the respective agricultural sectors. We will very likely see price increases in fresh produce and some price decrease in corn, soy, wheat, dairy, etc. (I say “some” because the actual global demand for food hasn’t decreased, rather, the purchasing power has been decreased because some subsidization has been lost due to USAID absence).