FOOD AND FUEL
All truth passes through three stages, German philosopher Arthur Schopenhauer once explained. “First it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.”
That line came to mind June 18 when I heard a nationally-known ag radio reader report that, the day before, the National Farmers Union had publicly called on the Commodities Futures Trading Commission to investigate “the extreme futures price volatility and lack of convergence in the hog, grain, dairy and cattle markets.”
Hah, hah, noted the golden-throated farm broadcaster in a sarcastic tone, it’s not officially summer until the NFU complains about those market scoundrels in Chicago.
Funny, right? I mean F-U-N-N-Y.
Even funnier is that in the seven trading days from June 11 to June 22, the July corn futures contract fell 15 percent, or 67-cents per bushel, from $4.47 to $3.80.
Another knee-slapper is that during that same, seven-trading-day period, July soybean futures fell $1.16 per bushel, or 9 percent, from $12.67 to $11.51.
Hilarious, right? But wait, there’s more.
From June 1 through June 22, July hard red winter wheat futures in Kansas City dropped 17 percent. Wow, a dollar-seventeen-screaming-cents in just 15 trading days.
And the funniest thing – this just cracks me up every time I think of it – is that there wasn’t one, solid fundamental reason for any of the plunges.
No big government reports. No perfect corn- or soybean-growing days. No huge increase in the anticipated wheat harvest. Nothing.
Which just goes to prove, at least according to the message I got from the radio reader June 18, that comedian Mel Brooks was right: Tragedy is when I cut my finger; comedy is when you fall into sewer and die.
You want more funny? I’ll give you more funny.
On June 23, the Permanent Subcommittee on Investigations of the Senate’s Homeland Security and Governmental Affairs released a 247-page report on last year’s monkey-wrenching by commodity index traders in the nation’s wheat futures markets.
Subcommittee Chairman Carl Levin of Michigan summarized the thorough investigation by noting “that excessive speculation in commodity indexes has created great losers through the wheat industry, from wheat farmers to grain elevators, grain merchants, grain processors and grain users “
And the report was issued two days after the official start of summer. Bada bing!
Mas? No problema.
On Friday, June 26, two days past this column’s deadline, South Dakota cattleman Herman Schumacher will be standing at his home’s front door in tiny Herreid to answer questions about why that door sports two signs labeling him a deadbeat.
Both were placed there June 11 by federal marshals enforcing a class action lawsuit settlement between the four meatpacking giants and Great Plains cattlemen.
Here’s the funny part: Schumacher, and his fellow litigants who agreed to put their names on the class lawsuit, Mike Callicrate of Kansas and Roger Koch of Nebraska, won. That’s right; a jury unanimously awarded the class $9.25 million when it said the big packers had knowingly used U.S. Department of Agriculture mistakes under the mandatory price reporting law to drive cash cattle prices lower.
The packers, however, appealed and got the jury decision and award tossed. That permitted them to go after the cowboys for $43,300 in court-determined attorney fees. Schumacher’s share is $15,881.38 and one packer, Tyson Foods, wants every penny now.
Funny, isn’t it? Stand up to power and win, then lose on some legal technicality and end up owing a $27 billion-a-year company $15k which then posts a giant “No Trespassing” sign on your front door.
Bet no farmer or rancher sues any food powerhouse for a while, eh? And summer’s just beginning! Hah, hah, hah
Guebert is a syndicated columnist from Delavan, Ill. Reach him by e-mail at firstname.lastname@example.org.
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