Fertilizers – Gouging or working markets?

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Farmers have asked the US Department of Justice to investigate whether recent spikes in fertilizer prices are attributable to market manipulation by fertilizer companies.

“The group, which has more than 6,000 farmers and rural members, alleges that fertilizer companies set prices’ not on the basis of basic supply and demand, but rather on the price the farmer is paid for his staple crops. “

Uh … I know we’re on the wrong side this time, but isn’t it the same ?? The demand for fertilizer IS based on the profit the farmer can make with said fertilizer.

Now if the fertilizer manufacturers agree to restrict supply or fix prices, that is another (monopolistic) matter. But I do NOT want the government to dictate to private companies the price of their goods or services, because one day the shoe will be on the other foot.

As it is commonly said, the cure for high prices is high prices. Again, as long as they are not in collusion, they will all want to take advantage of the profits, increase the supply, lower the prices. We do this as farmers whenever the prices go up, so maybe the high fertilizer prices will make us less greedy and the high prices may last a little longer if we don’t tear up all the abandoned farms. and the CRP which we missed in 2013. I will fertilize for my APH next year, instead of the usual 20-30 drunk above my APH. Also worried about the lingering drought next year, so I’ll be a lot more conservative than usual. But if by the time I have to lock in urea prices, I can also lock in $ 5 of new crop corn and get RP insurance with a guarantee of around $ 5, the numbers still work. We’re just running a lot more money now, but the margins are still there as long as you don’t take too much risk of falling prices for the crop we’ll be planting in a few months.


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