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According to the article, the bubble did indeed burst: > Then, like all speculative bubbles, the food bubble popped. By late 2008, the price of Minneapolis har

According to the article, the bubble did indeed burst: > Then, like all speculative bubbles, the food bubble popped. By late 2008, the price of Minneapolis hard red spring had toppled back to normal levels, and trading volume quickly followed. Of course, the prices world consumers pay for food have not come down so fast, as manufacturers and retailers continue to make up for their own heavy losses.

te_platt 15y ago
Thanks, I must have skipped over that part. Also I was able to find a good chart at http://www.wikinvest.com/futures/Kansas_City_Wheat_Futures http://www.wikinvest.com/futures/Kansas_City_Wheat_Futures The article still isn't clear (at least to me) on who took the losses for the speculators.
- tsotha 15y ago
  The same people who always take the losses - speculators. Some of them are the same people who bid the market up; some of them are people who foolishly bought at the top.
justincormack 15y ago
Prices are back up. Not quite up to the peaks of 2008 but not far off. http://www.indexmundi.com/commodities/?commodity=wheat&months=240 http://www.indexmundi.com/commodities/?commodity=wheat&m...
- randomdata 15y ago
  Speaking as a farmer, these are the prices required to remain profitable. I'm sure it wasn't covered here, but prior to 2008 we were seeing numerous farmer protests against the destabilization of our food sector. And then, all of a sudden, the prices rose. Maybe it was purely coincidence with investor actions, but I have always felt it was something else. Though it raises some interesting ethical questions. Is it better to have the farmer subsidize the poor by not turning a profit, or is it better to have the farmer turn a profit (the goal of the business) at the cost of starvation of others?
  - justincormack 15y ago
    Good point, and of course there are the government farm subsidies too, which could go to the poor instead if the farmers were profitable, certainly here in Europe the subsidies have not necessarily achieved the right goals, as there is still extensive poverty in agriculture. There are also buy side issues, such as concentration of buyers. And in the UK I see farm land prices are rising fast, which will reduce much of the potential profitability long term.
  - tsotha 15y ago
    At some point the farmers have to turn a profit. Maybe not every year, but most years. Otherwise some percentage of farmers will get out of the business and do something else. The price will rise until it becomes profitable. Over the last few decades the real problem has been food is too cheap. First world governments are subsidizing food production to the point that a farmer trying to grow rice in southeast Asia can't compete with imported rice shipped from California. So that farmer moves to the city and gets a job making Nikes. When there's some disruption in food production thousands of miles away all of the sudden people are starving because everybody is making shoes instead of growing food.

te_platt 15y ago

Thanks, I must have skipped over that part. Also I was able to find a good chart at http://www.wikinvest.com/futures/Kansas_City_Wheat_Futures http://www.wikinvest.com/futures/Kansas_City_Wheat_Futures The article still isn't clear (at least to me) on who took the losses for the speculators.

tsotha 15y ago
The same people who always take the losses - speculators. Some of them are the same people who bid the market up; some of them are people who foolishly bought at the top.

justincormack 15y ago

Prices are back up. Not quite up to the peaks of 2008 but not far off. http://www.indexmundi.com/commodities/?commodity=wheat&months=240 http://www.indexmundi.com/commodities/?commodity=wheat&m...

randomdata 15y ago
Speaking as a farmer, these are the prices required to remain profitable. I'm sure it wasn't covered here, but prior to 2008 we were seeing numerous farmer protests against the destabilization of our food sector. And then, all of a sudden, the prices rose. Maybe it was purely coincidence with investor actions, but I have always felt it was something else. Though it raises some interesting ethical questions. Is it better to have the farmer subsidize the poor by not turning a profit, or is it better to have the farmer turn a profit (the goal of the business) at the cost of starvation of others?
- justincormack 15y ago
  Good point, and of course there are the government farm subsidies too, which could go to the poor instead if the farmers were profitable, certainly here in Europe the subsidies have not necessarily achieved the right goals, as there is still extensive poverty in agriculture. There are also buy side issues, such as concentration of buyers. And in the UK I see farm land prices are rising fast, which will reduce much of the potential profitability long term.
- tsotha 15y ago
  At some point the farmers have to turn a profit. Maybe not every year, but most years. Otherwise some percentage of farmers will get out of the business and do something else. The price will rise until it becomes profitable. Over the last few decades the real problem has been food is too cheap. First world governments are subsidizing food production to the point that a farmer trying to grow rice in southeast Asia can't compete with imported rice shipped from California. So that farmer moves to the city and gets a job making Nikes. When there's some disruption in food production thousands of miles away all of the sudden people are starving because everybody is making shoes instead of growing food.