AGRICULTURE ECONOMICS 101
02/11/08
AGRICULTURE ECONOMICS 101
The news media has decided to tell the American public that the price of their food is going up because the farmers in the United States want to make ethanol instead of food. I am hoping someone who is not a farmer will read this and tell their neighbors that the news is full of it! Any farmer can tell you that since the beginning of time, they (farmers) have not decided what to do with their products or the price they would receive; the market has ALWAYS decided the price and the use.
So, to help everyone understand: the market/public/government has decided that ethanol is a good use for corn. Farmers have listened to the market and have raised more corn. Farmers DID NOT make the prices do anything. If farmers had not raised more corn, and the ethanol plants would have been built, the price of corn would be a LOT HIGHER because of the simple economics of supply and demand.
In conclusion, if you want to know what is driving the price up on almost everything, look up at the sign in front of your local gas station at those prices. Ask yourself this: who is controlling how high those prices are and why are they not being scrutinized for raising the price of the food you are on your way to buy at the grocery store? Farmers have always been price takers and NOT price makers. AGRICULTURE ECONOMICS 101
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