Only Time Will Tell
Will it be different this time? Are the fundamentals of the grain markets really different than they are every other time we experience a price spike that is “outside” of the normal range? There are many valid reasons why the grain markets have rallied: world population, huge demand from China and other developing economies, and an increase in domestic use of grains. But the “buzz” of a new threshold of grain prices and prosperity for agriculture is loud.
Over the past five years agriculture has been one of the best industries to be involved in, but it is hard to ignore history. Take a look at what has happened when we have a sharp increase in grain prices in the past. Will it be different this time?