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.

If necessity is the mother of invention, then unconventional market opportunities should be no surprise during drought.As dry conditions worsen and some farmers begin to open insurance claims for withering crops, nervous livestock producers are creating new demand for alternative forages. Feeding straw to supplement reduced hay yields continues to become an increasingly attractive contingency plan among cattle producers, both in Canada and the US. In some cases, demand is so high buyers are offering free trucking in addition to lucrative pricing.Closer to home OMAFRA offers a range of tips for saving, salvaging, and even pricing crops for feed. Harvesting grain corn early naturally fits ensiling. Soybeans can be adapted for green feed, silage, or substitute for alfalfa hay. With a little out-of-the-box thinking and creative market development, grain farmers can generate some financial lemonade this year, no matter how dry the conditions.