Big inventory adjustment, big price spike

It is odd to have such a large inventory adjustment this late in the season.  Usually, most of the news about the size of crop is out by September.


What happened?

For economics geeks, this does provide a fairly powerful natural experiment for measuring the fundamental relationship between inventories and prices, since this large short-run move in prices likely has very little to do with a shift in demand.

Comments

Post a Comment

Popular posts from this blog

Renewable energy not as costly as some think

The price of cotton in your shirt

Questions about Climate Change, Agriculture and Food Security