glebel1 wrote:
About a trade war happening, why are both the financial AND the agricultural markets up? There is nothing wrong with reciprical trade.
It depends on the product, and each product is it's own market when we're talking 'futures'. Example 1: soybeans are down 15% since the turn of the year due to possible retaliation in a trade war. Example 2: Wheat is up nearly 9% in the last two weeks due to an estimated poor harvest in Ukraine/Russia because of exceptionally dry weather there (scarcity raises prices). There is not an 'agriculture market', there's future markets for individual crops, because each crop is unique not only in how it's grown but also by the locations it's grown and the places it's eaten. Lumping it all together as 'agriculture' isn't really accurate and doesn't tell the whole tale, especially for farmers (we generally specialize in just one or two crops). I grow tomatoes and peppers, the price of wheat and soybeans have virtually no effect on my crops, therefore it's not part of my market. Tomatoes are up 2.5% from last year which is still horrible because it's the third straight year it hasn't kept up with inflation, peppers are down 2% mostly due to fears of NAFTA repeal. I sell locally, but I can't charge more than 5% more than a super market or people will just go there, so the international market affects me even though I don't sell internationally. Also if you're wondering why I charge more than a super market: unique genetics you can't find in a super market, and higher quality growing method (tomatoes are hydro, and the peppers are certified organic hydro).
Tomatoes have been a down market for three years and have nothing to with politics, but Trump's market uncertainty has hurt me on peppers, and in all honesty I will probably only break even with them this year. To me, it feels like Trump is picking winners and losers in this economy: steel's been dead for 40+ years, ag has been strong since the continent was opened to European colonists, so why on earth are why sacrificing our strongest economic markets to subsidize our weakest (almost non-existent) ones?