A lower U.S. price, it was said, would cause a surge in demand by crop importers and cause our export competitors to reduce their exports. Then, as our exports greatly expanded, revenues would increase, inventories would decline and prices would improve. Yet, when given a ch ance especially since the adoption of Freedom to Farm in 1996 the market has not reacted as expected. Compared to early 1980s, crop prices are down by half while exports are virtually unchanged. The overarching idea is that since food is essential for life, price is of little consequence.
Food comes first.
We will pay whatever is required to obtain it. But once we have enough, we will not buy significantly more total food, no matter how far the collective price of food has dropped. Of course not. Typically, a price drop greatly expands the quantity of an industry s product purchased by consumers. It is also likely that feed demand, the major use of grains and soybean meal, is becoming less rather than more responsive to low prices.