Inventories return to normal and prices bounce back. But this is not the case in agriculture. We can make believe it works, we can wish it would work but to do either is to deny reality. Limited ability to adjust agricultural production in the short run When inventories are high and prices are low, the first response in most sectors of the economy is to reduce production. A plant manager in a nonag sector can adjust output weekly or daily.
Farmers make the output decision only once a year at planting time.
When output is in excess, a plant manager shuts down lines or reduces his workforce, but a farmer does not idle his land. The mix may change but as a rule total acres planted do not. In most sectors of the economy, low prices and high inventories trigger an increase in demand for the goods or products, as consumers take advantage of low prices. The supply of livestock to consume feed grains is relatively fixed at any given time. It would be difficult as a nation to eat much more.