Gold, silver, copper, rubber, oil, crops, meats - you name the product, and those who produce it will immediately recite their litany of woe. This commodity price slump is global, with U.S. crop and livestock producers caught in the downward spiral like everyone else. Since the dollar is essentially a global currency, I have written to Federal Reserve Board Chairman Alan Greenspan, expressing concern over the specter of global deflation, which is just as crippling as run-away inflation. Some commodities face extraordinary events that further worsen their situation. The prime example of this is the hog industry.
Producers are desperate.
Needless to say, the cost of feed, equipment, supplies and virtually every other input we buy is proportionally higher. While prices for these and other commodities are dismally low, they aren't this bad. As producers, we know we raised a lot of hogs in 1998. But market prices did not accurately reflect the supply-demand situation. There were several extraordinary reasons for prices falling through the floor.