Two edges of the same sword

Being number one is awesome, or a major pain depending upon point of reference.  Being number two is almost as awesome, and simultaneously only a bit less painful than number one when viewed from the same perspectives.  It’s great to be first, you get the most attention.  It’s a pain because everyone else wants to knock you off your pedestal.  At number two you still command some level of respect while the population of folk looking to knock you off is a bit smaller (and arguably less powerful as the most powerful is focused on maintaining the number one spot).

We humans share this planet with a remarkable array of other organisms.  And we might be the most fastidious score keepers of the lot.  As we go about this ‘sharing’ we’ve created a list of winners and an even longer list of losers.  If one of our fellow organisms irritates us sufficiently we go to war with it.  And unfortunately the opposite can occur – being too well liked can have serious consequences (Dodos might confirm this if there were any left to question).  But in broader terms if you have something we like and are willing to play nice we can make it worth your while.  Cows, pigs, chickens, and several others from the animal kingdom have experienced this first hand.  And from the plant kingdom we have representatives like corn, rice, wheat, soybean, and several others.  In light of the full array of all the other organisms on the planet, however, these special friends (domesticates) number a miniscule fraction of the total.  What domesticates lack in the number of their species they more than make up in terms of their share of planetary biomass.  Our history with most of these domesticates is thousands of years in the making, but their growing planetary significance rides in lock step with the growth in our numbers.  One might like to presume their success is only because we’ve chosen them (Homo hubris?).  But what if it isn’t that simple?  Are there characteristics among these fellow creatures that have potentiated our significant increase?  Do we owe much of our success to the gift of their cooperation?  These are questions for another day.  Right now I want to focus on an even more select subset of this small number of domesticates – the commodity club.

Commodities are those things we find extraordinarily useful and have few to no differentiating characteristics.  Copper is copper on all the continents.  Sugar is sweet, and though it comes in cane and beet varieties, the distinction is about as significant as the source of crude oil.  Tiny to the masses.  So commodities are traded on markets that very closely follow supply and demand metrics.  There is very little room in commodity markets for branding – essentially none.  But these commodities are extraordinarily useful, so branded or not we pay attention to the supply and demand – to their price.

Being a member of the commodity club is like having a sword with two edges.  It’s great to be the object of all that attention.  But as a human trying to eke out a livelihood by producing commodity crops it mostly boils down to a battle of being the least cost producer.  Location matters a little, quality can make a small difference, but these are just nibbling at the edges.  Most yield per resource invested is what allows a grower to stay in the game.  The first edge of the commodity sword is being such a beloved thing – garnering all that attention.  You are so important that governments will pass regulations to define what you must look like; you will be planted on more acres; everyone has to acknowledge – you are the real deal.  The second edge of that same sword is merely a different perspective on the first – garnering all that attention because everyone knows what you’re good for.  Thus you get traded on who you are and nothing else.  A bushel of corn in Iowa is hardly different from a bushel of corn in Germany (though we will measure them differently… metric ton would be a better measurement choice here).

Let’s stay with corn for a second.  If you want to produce popcorn instead of US #2 yellow dent (the commodity) then you are still raising corn, but it’s a different kind of corn, and it gets a different price.  But the price it gets still depends in large part on the price of its cousin… commodity corn.  Wheat dances around this to a degree because its, well, special.  There are many different wheats, and we’ve developed such specialized uses for these different wheats, and we humans are fairly fussy in what we expect from our crackers and leavened breads and noodles; so you begin to see where this is going.  Wheat still has commodity issues, but these issues are a bit softer than for corn or my favorite, soybean.

Corn and soybean are primarily feed grains where wheat is more a human food.  And this distinction might explain some of the harder vs. softer aspects of their commodity lives.  Popcorn and sweetcorn are human foods and their commodity stance is softened (the sweetcorn actually travels as a vegetable and so it breaks from commodity swordsmanship quite nicely).  Soybean has some human food alternatives as well, and like popcorn the food grade soybean softens its commodity sharpness a little.  But when grains prices are up, food grade prices go along for the ride (and vice versa).

I started off with a paragraph on being #1 vs. being #2.  In the plant commodity club here in the U.S. corn is still #1.  But soybean is #2.  We know this because there are lots of us keeping score, fastidiously.




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