Filling A Vacuum

FTLComm - Tisdale - January 23, 2001
Between four and five "B" trains of wheat will come from this massive pile just East of town. This wheat suffered some frost and mildew damage and will graded at 2 or 4. The loading process is impressive and very noisy. A large field tractor is used to power a vacuum pump that sucks the grain from the pile and blows it up a spout into the waiting truck. Definitely easier and safer to use than a conventional auger as this sort of equipment is become more and more commonly used for moving grain.

The continuing low prices for wheat trouble producers throughout the world as there is not an over abundance of the commodity yet its price remains far below its usual value. For many years the wheat producing nations had a working agreement that regulated the sale of this grain but in 1969 various countries broke the agreement and since then it has been every country for itself. Those like the United States and the European Common market can afford to provide their producers with huge subsidies so that they can produce this grain and it be sold on the world market well below production costs.

Now there is talk of forming a world wheat cartel, similar to the marketing association for the oil producing countries. OPEC has been able to manipulate the world markets for decades, though not always to its own benefit as the 1973 shortages were artificially created and the market place responded with sharp reductions in demand. Few economist feel that there is any hope of an international wheat agreement simply because it would not be in the interest of many of the producing countries.

Some analysts have pointed out that if the downturn in the US economy continues and begins even a minor recession there will be a movement in capital from the stock market and there might be increased speculation in commodities. The result of such a shift would affect grain prices and some have suggested this process has already begun as spring wheat futures are already showing some positive indicators.