Grain Demand Elasticity?

[PERCY]

From a t itty tuggers point of view...corn is close to rationed, but soy won't be able to meet demand. Wheat makes for an alternative protein source, while giving you energy also. People eat soy, and animals that eat corn, so fewer buyers are involved in those type of energy's. As for the specs, and what they'll do??? anyones guess.

[drdiederich]

Part of what can and does occur is pre-purchasing, especially from export markets. Often with perceived and real supply shocks buyers will lock up a quantity to meet needs. This then leads to a slack in demand latter. So what you see as in-elasticity could very much be massive pre-purchasing that is replacing the large amounts of culling and demand destruction that is occurring.

[IA CORN FARMER]

Concerning the elasticity of corn demand, the below statement is very correct. Watching exports will probably be the key to trying to predict future corn prices. Also, at least with most ethanol plants in Iowa, there corn costs has already been locked in for a long time now.
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Corn demand can be broken down into three main components; feed demand, export demand and industrial demand (which is dominated by ethanol production). My guess would be that feed demand should be the most elastic with export demand the most inelastic. The problem, as I see it, is that we’ve already cut away at feed demand as beef and pork livestock herds have been culled. The other problem is that, in the short term (the next few months), I believe many of the ethanol producers have already locked in their corn costs. Thus, it appears the rationing of tight supplies (you have to ration supply with higher prices) must be derived from the export market. The problem here is the fact that the U.S. dollar continues to work lower, making corn prices more attractive to our export customers. Second, the economies in Asia and Central America continue to improve dramatically. Thus, given that the U.S. is the largest, the most reliable and the most efficient exporter of corn in the world, shutting off export business is going to take a substantial rise in prices.

[villageidiot]

you no doubt hedged off you feed needs, icf, but at what point of the price of corn and meal do you not restock the barns and shut off the lights untill next year?