Why is wheat so high priced?

keepitlow(6)March 2, 2010

Wheat skyrocketed to $12 to $24 per bushel depending on the variety a few years ago. But wheat prices have since come back down to earth on the spot market.



As of today, one 60 pound bushel of wheat cost $5.25, so the cost per pound is about 8.75 cents. OK, this is the price per bushel for large contracts on the commodity exchange. But even then, should a 50 pound sack of wheat jump from a pro rata $4.38 for 50 pounds up to $32 to $55 for 50 pounds as many bulk sellers retail the wheat for? That is a HUGE, HUGE markup. Bottom line...wheat jumps from .0875 cents per pound up to .64 cents to $1.10 per pound.



I can buy decent stone ground whole wheat for less than it cost to buy grain and grind it myself. But we have to remember this was how it was with many poor countries that the World Bank has taken under its thumb.

Haiti for example. They used to be totally self sufficient rice producers then the US imports subsidized rice and their farms can't compete so go bust. They lose all rice production abilities and now are dependent on the US for its rice. Almost same scenario with Jamaica and their milk production.



Anyway, what is your take on all this? Is all this markup due to the trendy survivalists craze for wheat? Or are wheat dealers just trying to get in on the Wall Street / Big Bankers greed wagon?


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How to compete with this is not to even try. Move into specialty markets with the rare verities that sell for premium prices. They are not commercially feasible due to the small demand for them; the demand would be large enough to make the small scale growers profitable. This is true with the small retailerÂs carrying high quality items that the Box Stores find unprofitable.

The problem with these 2nd world countries is lack of functional governments--being lead by dishonest dictators dressed in 'Democracy' Clothes pilfering the meager government coffers and pockets of the people.

It would be a good thing for a group of highly qualified business people to help these poor nations to compete in the new and ever changing world markets. Sort of a Job Corps for retired business people.

    Bookmark   March 2, 2010 at 1:46PM
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