A Quick Illustration of the Absurdity of Commodity Markets

5 Nov

Lets just say you bought a feeder pig in June.

That pig would have weighed about 50lbs. and cost you a princely sum of $70.00

Five months have passed and now you’re little feeder pig has grown into a full-fledged market hog.

You’ve spend five months feeding and caring for the little guy (or gal) and you bought enough feed in June to raise your pig to maturity for the price of $89.75 (corn & soy only at June 2014 market prices)

So:

Pig cost – $70

Feed cost – $89.75

Total – $159.75

You load up your pig and haul him/her (for free) to the auction barn to be sold.

Aaaaaand….

market-hogs

Your hog sells for $142.50

Congratulations, you make a gross profit of -$17.25

That’s right, you’ve just paid $17.25 for the privilege of raising a pig.

Oh, and lets not forget the $0.57 you owe the National Pork Board.

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