Click to enlarge.
Who does this trend help most?
1. Farmers
2. Banks lending money to farmers
3. Commodity speculators
4. Banks lending money to commodity speculators
5. Illusion of prosperity theorists
6. Slow motion train wreck gawkers
7. Anorexia nervosa wannabes
8. Fans of Ziggy Stardust
9. All of the above
Feel free to postpone your decision until reading the rest of the post.
2010
Debt, Income and Farm Financial Stress (pdf)
From 2004 to 2008, total real farm debt, as measured in constant 2005 dollars, doubled for large farming operations, rising to $60 billion (Chart 1).
...
Falling incomes alone could significantly increase financial stress for many livestock producers.
March 28, 2012
State's farm incomes edged up 1.3% in 2011
It was probably the best year we have had since 2007 or early 2008, and primarily what drove it were record milk prices," said Partick Lunemann, a dairy farmer near Clarissa, Minn., and president of the Minnesota Milk Producers Association.
...
But milk prices are "heading south" this year, Lunemann said, as farmers have added cows -- i.e., supply -- across the country, and warm weather has led cows to produce more milk. "We are not going to repeat 2011 in 2012, I can tell you that," he said.
March 13, 2012
Milk Souring as Record Profit Spurs Expansion of Herds
Record dairy profits and milder weather are leading to a surge in milk supplies from Auckland to California, turning last year’s best-performing commodity contract into one of the worst of 2012.
I feel like we've been through this before.
March 14, 2008
Holy cow! Consumers get a milk break
The U.S. Department of Agriculture says milk prices won't come close to the 12% surge in 2007. A 1.1% increase in the cow population and 1.7% growth in the average output per cow are expected to help keep wholesale prices under control this year.
Source Data:
USDA: Agricultural Prices
St. Louis Fed: CPI
Answer: #5
ReplyDeleteCP,
ReplyDeleteI admit that I am an illusion of prosperity theorist, that I like milk, and that lower milk prices would therefore help me. It was supposed to be a closely guarded secret though!
What gave it away? My white moustache?
It makes no difference. My anti-hyperinflationary plan can't be stopped now. You are too late! Got milk glut?
In the never ending battle between Mad Money and Mad Science, I have just this to say. Mwuhahaha! ;)
I am something of a physiocrat -- all wealth comes from the land in the end.
ReplyDeleteI need to develop this thinking more, but I do want to make a game out of it eventually (MicroProse's Civilization did a pretty good pass at it already of course).
http://i.imgur.com/reipg.jpg is a cool simulated satellite map of how California looked prior to all the irrigation, and from it you can see how immense the central valley is, and how well-supplied with water it would become.
It's my thinking that wealth creation is somehow levered on the primary sector -- the larger the primary sector, the larger the secondary and/or tertiary sectors can become.
One story of this century is our food exports to China (hello food inflation here), and/or China just buying our good land up outright, kinda like how Japan moved on Hawaii back in the day.
$300B buying land at $15,000/acre could pick up 30,000 sq miles of farmland, that's 300 miles x 100 miles.
apropos my previous comment.
ReplyDeleteTroy,
ReplyDeleteIt's my thinking that wealth creation is somehow levered on the primary sector -- the larger the primary sector, the larger the secondary and/or tertiary sectors can become.
I would not heckle your thinking. Loved the Civilization games by the way.
Speaking of which, here's the next Simcity.
ReplyDeleteThus far I've been extremely unimpressed with their videos. This is like two weeks of work and I wouldn't even bother making a demo vid out of it.
Civ + SimCity + DSR = ?
I hate typing that out on the internet since you're apparently the only guy on the planet besides me who can understand that potential : )
The only problem with that is on game design terms, the more elements you add to a design the smaller your target market becomes -- I learned 25 years ago that game designs operate on the intersection set operation, not union.
That design is also pretty damn messy, all over the place. Finding the core play mechanics has been a lifetime of thinking and dreaming, LOL. . .
Ca. 1990 I was playing around with a Civ-type idea, but my design never got close to Sid's sublimely clean mechanics.
I am something of a physiocrat -- all wealth comes from the land in the end.
ReplyDeleteSorry but I gotta heckle that one.
By physiocrat reasoning Japan and Hong Kong should be like Haiti. And speaking of Haiti, did you know they share an island split about down the middle? Seriously, if you got all your info from the news, print or broadcast, you would think they are on their own little island like Cuba or Puerto Rico. And with that kind of wealth disparity, how does the DR keep them out? Again if you got all your info from the news media, it's impossible to secure a border against determined economic refugees. OK, enough on Haiti.
How's the immense resource wealth of Rhodesia working out for them?
Or Russia before and after Nicholas II?
Or those 41 years of the GDR? I don't know Germany's geography all the well, but for a state roughly the size of Ohio, Indiana, and Illinois I find it hard to believe it was simply luck that all the good land happened to be in Western Germany. Maybe it's like Oregon & Washington over there, but I think I would have heard of that.
BTW, what's DSR?
ReplyDeleteAnd boy am I giving something away here, but I always thought SimCity was Civ++. It's from the same people right? OK, off to wikipedia for me... :-)
physiocrat reasoning Japan and Hong Kong should be like Haiti. And speaking of Haiti, did you know they share an island split about down the middle?
ReplyDeleteYes, the DR got all the good land and Haiti was stuck with the mountainous scrap land with no rain.
Manufacturing is something of a zero-sum game, as Japan is beginning to find out. Better than nothing, but it's something of a race to the bottom.
Being an entrepôt like HK is *really* a zero-sum game.
Now, if China really could make xboxes for $300 for us, it'd be great and we'd have no business making anything here in the US any more. But these cheap Chinese goods are coming with a deferred settlement that's going to come due in the future.
DSR?
http://www.ss-alpha.co.jp/products/ds7ex.html
Troy,
ReplyDeleteI hate typing that out on the internet since you're apparently the only guy on the planet besides me who can understand that potential : )
Hahaha! Yeah, I would buy that game in a heartbeat.
I do have a request though. Don't let Bethesda make it. Still waiting to buy Skyrim for PS3. I see no need to torture myself.
3 Stars out of 5
What seems to be the problem? Bugs. What's new though? I waited until Oblivion hit the bargain bin (and many patches were therefore released) before buying it and even then it was incredibly buggy.
How's the immense resource wealth of Rhodesia working out for them?
ReplyDeletePhysical wealth is only a start, the basis of the entire economic engine.
Services can be exchanged among service-providers with very little friction (ie loss of capital wealth), the more abstact the service, the higher the effective multiplier and resulting GDP.
Eg. piano teaching doesn't consume much hard wealth at all. But we all can't be a nation of piano teachers, somebody's got to create and maintain the hard goods and other lower level services of the economy.
I see Zimbabwe's current GDP is $500 per capita. Yeah, that's poverty. My digs, Fresno, isn't doing so hot economically either, and that's with a $5B/yr ag sector feeding wealth into the community (~$10,000 per capita!).
My preferred praxis with economics is to look at the hard wealth creation vs hard wealth consumption. Very little of our alleged $15T/yr economy is actual wealth creation and consumption, so much of that is just rents being ping-ponged through the System.
AllanF,
ReplyDeleteMaybe it's like Oregon & Washington over there, but I think I would have heard of that.
In 2002, I went back to the small farming community in Western Washington where I grew up (20-year class reunion).
It felt like a ghost town. There were more than a few empty businesses. And how have things done since?
Well, the 2010 census says the population is down 15% since 2000.
Perhaps I should move back.
Look what $56,000 gets you.
Skyrim is all that I hate about today's gaming. Beautiful, but empty-headed.
ReplyDeleteAll mass-popular games suck these days. Nothing comes close to the vision of the old Carrier Command.
Portal was great but something I only felt to play through once.
What I want is a virtual chess set. Simple on the surface, but full of depth of play.
Minecraft was a move in the right direction, but IMO it needed/needs much more of a Dwarf Fortress story and play mechanic superstructure imposed on it.
Troy,
ReplyDeleteSimple on the surface, but full of depth of play.
Classic Empire (video game)
Talk about a time sponge. I loved that game.
One day I walked into the living room. One of my roommates was playing the game on my Atari ST. He asked me what I was doing. I told him I was going to work.
He thought I was joking. He sat down to play the game. It turned into an all night adventure. It sucked him in and time ceased to flow. Hahaha!
Cyberstorm was also a favorite of mine. It was one of the few Sierra games I bought (and I worked there!).
Although CyberStorm was a limited commercial success...
Bah!!
True story: one summer day in 1990 I was sitting across from Sid Meier in the company meeting room area, reading the Empire manual for some reason.
ReplyDeleteI think during this time he was still working mostly on getting Top Secret shipped, but he didn't say anything. Little did I know that soon after my time there Sid would release the greatest game ever made.
Apple is launching a game-matching service for OS X this summer, I want to be on that, to get that game I've been working on since ~1987 shipped: )
You got a Mac or iOS perchance? I've decided to move to native OS X since Unity's 2D environment is little better than what I've handrolled already.
Being a big PC Empire fan myself, I've been following the travails of the guy who licensed Empire from Walter Bright for 10 years now.
ReplyDeleteHe couldn't make a go of it, but that was before the whole app store thing got going.
I suspect his programming chops aren't quite the level necessary to shift to a multi-platform strategy, but I shouldn't talk #### since he's actually got things shipped and I haven't done squat in 10+ years.
Troy,
ReplyDeleteYou got a Mac or iOS perchance?
I'm hobbling along on Windows 2000 still, because I'm too cheap, too lazy, and too stubborn to upgrade, lol. :)