>Therefore the government steps in with subsidies to even out how much farmers get, and to guarantee a surplus to avoid ruinous food prices for consumers.
Yeah it's not like there are mechanisms to deal with this sort of volatility (hint - futures).
Futures do not change how big the price swing is from year to year - they just let you control now the cost you'll have in a few months.
It is also a technique mostly for businesses, not consumers. How many consumers do you hear about controlling next month's food bill by buying their produce on a future's market? Right, none.
Are you implying that you buy your food from the farmers or are you're telling me that the food industry/retailers can't estimate the consumer demand and make contracts/futures on that ? And how exactly do futures not change the price swings from year to year ?
The latter. Futures do not change the supply or demand, and therefore do not change the overall results of a supply-demand curve. What they do is allow people to estimate where it will eventually land, and choose whether to lock in prices some distance in advance.
This ignores a subtlety. If one consumer locks in a large fraction of the supply at a low price, then the supply is smaller than expected, you've made the supply-demand problem more extreme for everyone else. So futures allow entities to lessen their own volatility, but that increases everyone else's volatility.
Yeah it's not like there are mechanisms to deal with this sort of volatility (hint - futures).