English 250 High Grain Price Mediation Mick Sitzmann.

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Presentation transcript:

English 250 High Grain Price Mediation Mick Sitzmann

Problem to be Solved  Drought of the Summer of 2012 caused record high grain prices.  Scarce amounts of rain caused the crops of the Midwest to have minimal yields. -Only 6.6” from June-Sept. in 2012  Low yields means small amounts of grain.  Small amounts of grain leads to low supply for consumers.

Grain Price Contracts  A Grain price contract would satisfy the needs of both parties involved in the conflict of high grain prices.

Who is Affected by High Prices  Prices as high as they have been recently are taking a toll on many different operations and families.  Two main groups in particular.  Row- Crop Farmers  Cattle Farmers

Row Crop Farmers  Not producing enough grain to keep the price low  Law of Supply and Demand  Farmers making huge profits if they have excess grain.  Worried about big crash of markets after these record prices.

Cattle Farmers  Really feeling high grain prices through rising feed costs.  Starting to question if purchasing feed is worth the cost of raising the cattle.  Rising meat cost at the store is the end effect of the high feed costs.

Some Against Grain Price Contracts  People want to take the chances of making money on their own.  Some have other strategies to sell their grain at high market points.  “Some people might make mistakes…..” (Sitzmann)

Mediation  Grain Price Contract  Price agreed upon by both parties in the contract to sell and buy grain at.  Helps row crop farmer because it takes away risks of market crashes.  Helps cattle farmer because it takes away fear of extreme high prices.

Works Cited  "2012 Precipitation." USGS Iowa Water Science Center., 23 Apr Web. 4 May  "Drought meeting with Vilsack draws hundreds." KCCI News., 17 Aug Web. 2 Apr  Thornberry, Tim. "The high grain prices of 2012 are likely to stick around through 2013, expert says." KyForward., 6 Jan Web. 3 Apr  "Look for Grain Prices to Remain Historically High." National Hog Farmer., 14 Jan Web. 2 Apr  Hurt, Chris. "Drought Creating Decline in Cattle Numbers, Value." AgFax., 6 Aug Web. 1 Apr  Piller, Dan. "Rising beef prices worry producers." USA Today., 18 Feb Web. 4 Apr  "Grain Contract Glossary." Farmers Cooperative Co. Web. 2 Apr  Sitzmann, Jim. Personal interview. 1 Apr