America’s farmers are price takers, not price makers, but not a lot of consumers understand that.
Ag economists say it takes some convincing to make sense of a complicated industry.
“I think that in agriculture, or people’s perceptions of agriculture more broadly, they have this belief that it’s just the farmer who makes choices. Well, I don’t think that that’s fair. I think that farmers are a part of this very big system and they’re an integral part. They’re very, very, very, very important. But you have ag retailers that are making recommendations on what they’re going to do. For input choice, you have feed yards who are gonna make choices on what the market is going to look like when they you know decide to go to slaughter. I mean, you have all of these different components of the agri-food supply chain, if we want to call it that, that all have their own incentive structures as to why they make the choices as they do,” said Dr. Trey Malone.
Malone says farmers are simply responding to the markets and the opportunities placed before them.