The Real Truth About Farmer Chris’s Corn Price

My family is fortunate to be supplied all summer with a wide variety of fresh fruits and vegetables by a farm not far from our home. The produce is picked fresh each morning, and compared to what is available in a supermarket, the quality is off the charts.

A few days ago marked the first day Chris had corn for sale at his farm stand, and that event always brings the crowds. As my wife was purchasing our produce, she overheard a conversation. A buyer was complaining to Chris about his higher corn price this summer. Chris explained that he had purchased new equipment that allowed him to plant earlier in the season. The higher price, he explained, was how he would recoup his expense.

While Chris is an excellent farmer, businessman, and entrepreneur, he is not much of an economist. Or perhaps he is an armchair economist too and just doesn’t let on. After all, the explanation that he gave his customer for his higher corn price is a lot more palatable than the explanation I’m about to give.

Due to increased demand for ethanol, corn prices are up over the past year. Corn prices are up in the supermarket too. Although Chris’s corn is a premium product, the supermarket acts as competition. Regardless of Chris’s expense, if corn prices were not higher in the supermarket, he would have trouble selling his corn for a higher price at his farm stand.

Now, for Chris to tell a customer that he is going to charge what the market will bear will not go over well with some. Many will believe that the price is unfair. After all, they will reason, Chris is not selling his corn for ethanol, so why should he get a higher price?

While I think ethanol is a terrible idea (and I will explain why in another blog post), I for one am glad that Chris charges what the market will bear. It provides him a powerful incentive to plant his crops in early spring, take risks, and work in miserable weather. There are other farms stands in our area, but none have but a fraction of the produce Chris has.

There is a fundamental law of exchange in the free-market—that law is that both parties in an exchange are made better off. I value Chris’s produce more than the money I give him, and Chris values my money more than he does his produce. In that fundamental law of exchange, we find a basis for the cooperation and harmony of interests that exists between Chris and my family.

Having known Chris for many summers, I know he works very hard and although he likes his work, he also likes money. That combination is unbeatable. It works well for Chris and for his consumers too.

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8 Responses to The Real Truth About Farmer Chris’s Corn Price

  1. Nice to have found your blog about giving up control. And the fun part is that wanting to give up control, is controlling also. So could it be that we give up control when we are not there anymore to give up control. And I mean the thinking mind is not there any longer. That way the universal force or evolutionary impuls can work through us.

    I have a Dutch version of my weblog and am working on translating that one into an English version. The English version is http://wonderwalk.wordpress.com/ Greetings from The Netherlands. Christine.

  2. Barry Brownstein says:

    Christine,

    I agree with you. Our ego can not give up control, but ideas can help inspire us on our journey.

    Thank you for the link to your beautifully written (and visually beautiful) blog; I will visit it again.

    You may be familiar with a Dutch author Jan Kersschot. He seems to share your sensibilities.

  3. A says:

    This post is a joke, right? The corn that Chris plants is NOT the same kind of corn that’s used for ethanol. Unless of course that corn you buy from Chris is hard, off the cob and sold by the bushel.

    Yes, there is a fundamental law of exchange but the market for sweet corn is not the market for field corn.

  4. Barry Brownstein says:

    I can assure you that higher food prices, caused by increased ethanol production, is not a joke to many Americans.

    Of course they are not the same, but increased acreage planted for field corn reduces acreage for sweet corn. The reduced acreage drives up the price.

  5. Jeff says:

    Please examine the sweet corn vs. field corn thing again. There is no correlation. In fact, sweet corn is to field corn as Batman is to Julius Ceasar.

    That being said, world supply demand issues, as well as transportation costs, have hit the grocer store much more than field corn price. Field corn ends up being a very small part of beef or chicken retail products, as well as cereal.

  6. dan says:

    I am a sweet corn grower, among some other vegetable crops, and I read your post and the replies. I think all of you are missing one very important aspect when it comes to pricing of fresh veggies–the increase in input costs. people don’t realize how much fertilizer has gone up in the past 3 years–150%. they fail to realize as gas prices have gone up for driving their cars diesel prices for the tractors have gone up even more. seed costs have risen along with chemical prices. and for me, if I can’t charge more for my produce to cover these increased input costs I will quit farming. it’s that simple. and I know other farmers who feel the same way.

  7. IKnowFarming says:

    The price of sweet corn and field corn are directly related, because they both require the simalr inputs, seed, fertilizer, fuel, labor and land.
    ,

  8. Steve Allen says:

    A World Bank study (“Note on Rising Food Prices”, by Donald Mitchell, July 2008), blames ethanol for high corn prices and recent interviews with peasants in South America ( see http://www.ethanol-lie.com ) confirm detruction of forest for corn as a result of high prices. Hopefuly there will be some pressure on congress to reduce their enormous corn mandate.

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