Friday, December 2, 2011
To market to market
Once again, the farmer strikes. I deliver commodity A to a receiver who tells me he can buy the exact same commodity one bag at a time from another receiver on the same market for the same price I am charging. The same grower demands an FOB price which precludes my making a profit and at the same time consigns product. The result is he loses and I lose. But the farmer feels good somehow because he is dealing directly with the customer and cutting out the parasitic middleman. I know this sounds self serving, but the broker acts as a buffer between the farmer and the wholesaler, using knowledge of the markets to maximize the return to the grower while providing a fair price to the market. I have been struggling to make sense of the grower's folly for over 25 years and to this day it still makes no sense.
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