Part 1 Of A 2 Part Series

RICHARD E. HICKS

OCEAN SPRINGS, MISSISSIPPI

Several seasons ago after the pandemic, I penned an article I titled The Economics of Things. It was a post Covid treatise speculating on the impact of the world economic slowdown would impact agricultural products and our markets in general. At that time, the so called "experts" were convinced the malaise would continue. Supplies were high due to the loss of demand. They failed to take into account the loss of demand was a large part artificial. The world economy was shut down. We felt the proclaimed "gurus" were a bit off on the

economics of the situation. During the duration of the shutdown, products did not move, the supply chain was "broken". The experts failed to take into account the larders were empty.

Now to the heart of the matter. Prices in the general economy are exorbitantwhether, you are buying a house or a jar of peanut butter prices are sharply higher than a few seasons ago. Prices over the past few years have skyrocketed. It onlytakes a trip to any store to see this evidence. Politicians point to the drop in the inflation rate, yes we are slowing down the rate of increase, we are not lowering the price. The

$80 widget now costs $1OS. the base price of the widget is never going back to$80. We are starting at the new level of $1OS and slowly but surely increasing from that level. Even with a slowdown in the inflation rate we are making the widget increasingly out of reach for the average consumer.

Where are we now? Let me begin with a simple example. Go sell a bushel of corn and see if you can buy a jar of peanut butter. As producers become increasing awareof the unaffordability of everyday items. Those necessary to produce the crop, seed, fertilizer, fuel, rent etc. All these items have increased in price geometrically frompast years. These prices are in stark contrast to the reality of today’s ag prices. Unless you are a master marketer and can pull the trigger at levels that are not fantastic but are at least at the top of the ranges. The past few years have been difficult. The answer appears to be economies of scale runmore bushel across the scales and hope for the best. Not necessarily the best answer or outcome. Faced with all these facts I would like someone to explain to me the disconnect between nearly every item consumed in our economy and the lowest prices we find are in the ag sector. We are seeing everyday items increase in price by leaps and bounds, while grain and soy products grind lower. This season reminds me of the early 2000's a large number of commodity markets were on the prod. Yet, grain prices languished from the over production we saw starting in the late 90's.Many commodities saw advances, precious metals, oil, base metals all saw rapid increases. Scrap iron was on fire. grain prices managed to ignore the advance and continued to suffer.