Wednesday

 

I'm not qualified to talk econ, but...

I suppose it's a good thing that the effect of U.S. farm subsidies on the economies of both the United States and the world is being considered on the front page of the N. Y. Times. But some of the reasoning in the article seems off to me. In particular, this paragraph:
Indeed, this season's huge volumes weigh heavily on farmers, who already have suffered a string of misfortunes: a large overhang of grain from last year, coupled with soaring energy costs and two Gulf Coast hurricanes that stymied transportation, and a severe drought that distorted prices. Together, these events have conspired to depress corn prices and potentially make this the most expensive harvest ever for the federal government.
Now I could be totally wrong here, but it seems to me that a couple of those things would raise the prices of crops, and therefore benefit farmers. In particular, the stymieing of transportation and the severe drought should both have constricted supply,and offset the decrease in prices caused by the other factors to some degree. I suppose if the drought had caused quantity produced to drop by more than the increase in price, that would be one thing, but otherwise I don't get it. Also, the previous paragraph includes the phrase "...when they produce too much and when their crop prices are too low," in a context that suggests one isn't caused by the other.

Update (12/2): I have recently concluded that this post made no sense, but I don't feel like editing it. At the time, I read the article as complaining that one crop in one market was simultaneously over and under-supplied. I no longer feel that the article said that. This just makes the post title even more accurate.

# posted by washerdreyer @ 11/09/2005 05:20:00 PM
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