Speculation happens

As food prices go up, consumers have turned up the heat on speculators. While this isn’t a new phenomenon, farmers might want to be prepared to share some facts behind food prices.

Since 2006, hedge funds, index funds, and sovereign wealth funds have been more involved in agricultural commodity markets and the computerized trend-following practices employed by many may have impacted the short-term volatility of agricultural prices. Whether you’re for speculators or against them, they do play a part in maintaining market liquidity. While fundamentals will always influence the market, farmers should probably expect that role to continue to evlove as farmers and speculators alike take greater advantage of the globally accessible and almost immediate nature of information in today’s digital age.