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Metals Minute 82 Gold and American Farmers

Gold & American Farmers: Synergy

April 04, 2022214 view(s)

All the metals are higher since Friday's update, with ongoing inflationary issues and supply constraints related to the Russia-Ukraine conflict, and continuing impacts of the pandemic in China, amidst closed factories and cities.


Today we want to look at impacts on American farmers since what affects them will often affect us. As farmers prepare for planting season, we have cost inputs rising on three fronts. Most heavy farm equipment uses diesel, which is at record levels this year, and nearly double last year's price.

 

 

Herbicide costs are also up dramatically due to a 25% tariff imposed in January on imported herbicide products from China. This tariff has since been removed, but negative impacts continue.


Fertilizer availability is also an issue, with the United States currently producing as little as 10% of some important fertilizer components. Fertilizers produced locally have also doubled in price and have risen in tandem with the natural gas price used to make them.


The net result is that it will cost many farmers more to grow an acre of corn than they can sell it. This will lead to further inflation as either the supply of corn decreases (and price rises), or the government subsidizes farmers further, leading to further monetary inflation.

 

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About the Author: Bill Stack

 

Financial Analyst of 29 years and Gulf War Veteran, Bill has been helping families nationwide keep their money safe and growing since 1993. As a Certified Financial Fiduciary® and a RICP®, Bill specializes in helping protect your assets with growth potential.

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