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this post was submitted on 18 Jul 2023
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I suspect the prices will, ironically, allow new players to enter the market and undercut.
I have farmers in my family. They talk about the pieces they got last year (high) versus this year (much lower). In fact, it's leading to some unethical optimization problems...
Crop insurance payouts are based on last year's price. For some farmers, they would earn more this year if they sabotaged their own crops and took the insurance payout based on last year's prices.
My family rejects it, cause ethics is a thing. But I suspect some farmers will just see dollars and will artificially constrain their supply. And the rest of the farmers will have their insurance rates increase.