Today, I'd like to do a comparison of hard assets known as commodities. These commodities are divided into three groups: energy, agricultural and metals. Their prices can fluctuate wildly on a daily / hourly basis as they are traded on the open market or commodities market.
The energy group consists of gasoline and crude oil as well as natural gas and heating oil. The agricultural group consists of items such as corn, wheat, soy beans, coffee, sugar and farm animals such as cattle and hogs. This group also includes lumber and cotton. The metals group consists of the precious metals which includes silver, gold, platinum, palladium and rhodium along with base metals like copper, tin and zinc.
The year 1980 was pivotal year for commodities. As we exited the inflation of the 1970s, commodities peaked in 1980. Gold famously peaked over $800 in January of that year, a gigantic increase from $35 an ounce it was at, back in 1971. From its peak in 1980, gold dropped to $250 by 1990.
Below, I've compiled a short list of some of the most popular commodities comparing their 1980 high to their closing for the trading day yesterday. There are a couple of commodities where I couldn't find any info on their 1980 prices. I went as far back as I could go. These particular commodities are noted below.
Commodity 1980 2022 Percentage Change
Agricultural
Soy beans 956 1387.25 + 45%
Coffee $2.15 per lb $2. 31 per lb + 7.44%
Wheat (Kansas) 515.5 768.5 + 49.08%
Corn 396 603.75 + 52.46%
Sugar (#11) 45.75 18.39 - 59.8%
Orange Juice 101.7 142 + 39.6%
Energy
WTI Crude Oil 32.35 (earliest data 1983) 80.24 + 39.63%
Heating Oil 0.9845 2.4777 + 147%
Natural Gas 2.76 (earliest data 1990) 3.812 + 38.16%
Metals
Gold $850 $1789.20 + 110.49%
Platinum $801.20 $934.20 +16.2
Palladium $307.75 $1816 + 490%
Silver $50.32 $22.19 - 54.5%
There are many more commodities but I kept this list short. We can see from the list above who the winners and losers are. I tallied this info from credible sites on the internet. Prices fluctuate wildly. Oil has been hit hard since its 2010 high above $140 per barrel and is presently hovering near the $77 range. Heating oil is the clear winner in the energy sector. Also, keep in mind that the numbers are not adjusted to inflation.
Surprisingly, coffee prices have remained rather stable over these last 40 years but oddly, that large cup of coffee at Starbucks costs as much as a pound of coffee beans would. The big winner in the agricultural group is corn while the big loser is sugar. It's true that sugar prices have remained low. Let's see how long that lasts going forward.
In the metals group, palladium wins by a long shot and gold comes a distant second yet still has done very well with a respectable 110% return. The big loser is silver. Even after 42 years, silver is still below its 1980 high by minus 54.5%. Adjusted to inflation, if you bought an ounce of silver today, you'd be paying at 1972 prices. Same goes with sugar at these rock bottom prices.
That looks very attractive to me. I think I'll stick with silver (and sugar)!
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