I noticed wheat prices closed over $14 yesterday. How is this affecting the movment of said commodity by rail?
I havent heard too much complaining recently about Montana situation. Is the high commodity prices taking care of that issue? It sure is affecting the food prices for just about everything wheat, corn, or soybean related.
ed
BNSF appointed Kevin Kaufmann as VP Ag, and he comes from the industry, formerly at Henry Dreyfus. That seems to have evened out many of the rate differentials – in favor of higher rates for everyone. So, now ND, Kansas and Colorado growers are complaining too, particularly since a rail car shortage has been building for quite some time, and notwithstanding record profits by the rail industry, little or nothing has been done to alleviate it.
I think discussion of those kinds of issues have disappeared from Trains forums due to the nature of the debates that ensue resulting in the uninformed, voluminous and vituperative responses that are generated by people who don’t know a **** thing about it but for whom personal agendas always trump all facts.
Recall the nastiness of one individual here who argued that BN actually deserved an award for doing Montana and North Dakota farmers favors by lowering grain rates – which he asserted had happened – and he had all sorts of theories about how good the rates were, how they had been generally declining … and spent three years here arguing about it in vituperative terms that the moderators seemed unable to “moderate”. The farmers were lazy, the state was worthless for agriculture, and the Governor was even denounced as a “moron”. I found the entire exchange patently offensive, particularly because of the dishonest representations and manipulations of statistical data combined with the "I once worked for a railroad therefore I am r
Commin out swinging, I see. Even though I agree with some of what you say. On the other hand, is that price ($14) for a bushel of wheat? Wasn’t $3.50 or $4.00 a bushel once considered high?
Ed. Where was this price quoted?
AP: Wheat for March deliver surged the daily limit on the Chicago Board of Trade, jumping 30 cents to fetch $10.03 a bushel. Wheat was just shy of its all-time high of $10.095 a bushel.
Prices in the PNW are ranging between $10 and $14 a bushel at Portland. Prices are as high as $17 for 17% protein HRS. But, the farmers aren’t getting those prices since most of the crop has already been sold at considerably lower prices. That’s why the prices are so high – unexpected foreign demand has come after the wheat crop was pretty much contracted for sale, and there’s not much out there to sell. A few wholesalers will make some money – taking the differential between contract breach payouts and the higher price they can obtain – but that’s Big Ag, not the farmer that grows the stuff.
Wheat at $3.50 to $4.00 was once considered high … in 1973. It’s pretty much stayed there ever since as the industry took advantage of (or was forced to implement, depending on how you look at it) productivity increases – and including unprecedented bankruptcies which lowered the cost of some inputs such as land. The only cost that really went up over that time – failing to reflect productivity increases – was rail transportation.
The price I saw was in today’s Wall Street Journal…delivered St. Paul.
Unless of course, my eyes played tricks on me, which could have occured.
Hopefully this conversation will remain civil and wont be locked down.
ed
Don’t forget that world commodity prices when expressed in US dollars are reflecting a depreciation of our currency. As an example, on January 1, 2000, the Canadian dollar was worth $.69 USD. Today, it is about $1.01. If you quote wheat in Canadian dollars, the increase will not be nearly as impressive.
Fortunately for the US, while the Canadians do export a lot of wheat, their #1 export is those pesky [censored] cold fronts!
As chef, I feel the wheat prices going up. Dinner rolls would cost 6 cents to make now, 14 cents to make. Keep in mind the bread you eat at the restaurant we don’t charge you.
Considering the prices I pay at restaurants (which have been going up), I would say the cost of the “free” bread is amply covered.
Enjoy
Paul
ED, I think the prices you seen are futures in anticipation of big supply-demand report [I think] do out today or tomorrow. Early guesses are demand up - supply down.
I check with our local elevator on cash price [yesterday],
Corn - $4.71
Beans - $12.74
Wheat - $8.11 [futures]
Those are the prices a farmer would get this morning, it’ll most likle change later. Rail shipments don’t seem to be up. It seems to me farmers are holding on to on farm storage for higher prices or to fill their summer old crop contracts
I check the futures market and found yesterdays future for March
Corn - $4.99 ; beans were $13.31 ; no listing for wheat though
I can remember back in the 60’s getting $1.68 for shelled corn and a $1.50 for wheat. I never thought I’d ever see prices this high and holding this long.
The higher grain prices are raising the cost of grain baste foods, but also the price of feed cost which will raise the meat, milk n egg prices. Combine those cost and the transportation, rising utilities, well you now where this is going.
A college teacher I knew told me one time “Today’s high prices are tomorrow bargain price”
inch
Paul
When we cost a recipe for Example: Eggs and potatoes we include the items you use but is not charge. We call it Q-Factor. Bread, Salt & Pepper, sugar, butter, Jelly and Cream . Once we get the Q-factor we included in all the breakfast recipes. Usually between 14 -20 cents per recipe.
Once you determine the cost then multiply with the food cost. You get your selling price. [C=:-)]
Elevator prices, end of last week:
Portland
HRW $11.50/bu
HRS $17.53
Great Falls
HRW $10.21
HRS $13.24
Gulf Ports:
HRW $11.45
HRS $17.28
Futures, for March
Chicago $9.43
Minneapolis $14.03
Through the ports, loadings are generally 101-107% of last year’s, except at Texas Gulf ports where export wheat arriving by rail car is 176% of last year’s, about 13,000 carloads. Notwithstanding that, nearly half of all US export wheat arriving by railcar continues to go through the PNW ports of Seattle, Tacoma, Kalama and Portland.
Your eyes are fine.
And that’s a good point. Prices of wheat and oil, measured in dollars, reflect the price of the commodity on the world market. A couple of years ago we discussed here the fact that China was refusing to revalue its Yuan, and keeping it artificially cheap to stimulate its exports. Well, if they wouldn’t revalue, the only alternative was a devaluation of other currencies relative to the Yuan. So, the world price of wheat is reflected in the dollar value received as a considerably higher dollar price, even as it may not reflect a change in the price denominated in Yuan or other currencies.
The irony, of course, is that the Chinese Yuan got revalued, whether it liked it or not, its exports will become pricier on the world market, even as US exports will now become cheaper on the world market and therefore more competitive.
Perhaps this discussion should include the US Dept. of Agriculture policies which regulate the acreage which wheat farmer can plant. These were in place at one time and I assume remain in some form.
Shades of Franklin D. Roosevelt!
The program is still there. It is a price support system, and is voluntary. By agreeing to limit the amount of acreage growing wheat, a farmer would have a guaranteed floor price for his wheat plus a payment for acreage taken out of production to try and stem what was an ongoing dilemma of farmers becoming more productive, and increasing both yield and acreage, which was just crushing the market price as more and more wheat came on the market. Back in the 1930s, and during the 1950s and 1960s when wheat was $1.20 a bushel, that floor was a reassuring difference between profit and failure in a market that was generally pretty soft for wheat. It was basically an insurance policy and although there was a “payment” for the land taken from wheat production, the farmer paid for the insurance by foregoing the wheat income on that extra acreage.
Since 1973, I doubt that the USDA has had to pay out the floor price to anybody. Few farmers have any incentive since that time to take any land out of production for purely market reasons. The program still exists – I fill out paperwork for it every year – but we have had no particular incentive to grow more wheat than we historically have, and the program does have some conservation benefits available, which is why we still participate even though at that, our last big project was in 1985 for some water control, and we haven’t had a need for anything since then. I don’t think we’ve gotten a check for the “acreage out of production” for 25 years or more and frankly, I haven’t paid that much attention to it. It was a useful
Chef:
Do you make your rolls from scratch? I bake my own bread, but am always looking for a new recipe, if you wish to share.
ed
Where I live we there are miles and miles of potato fields. In the middle
From $2.00 a bushel to $14.00 a bushel, this is just the beginning I see a loaf of bread going up in price once a week here, milk just jumped up and it’s controlled. But, like they say, the day of cheap food is over. and it’s coming sooner than anyone thinks.
It means the railcar owners (leasing companies) will be charging top dollar to make their rolling stock available (to the highest bidder) and the railroads will continue to charge top dollar to move the cars across their systems. [:O]