High Finance Onions?

In ‘58 Cong banned the trading of futures contracts on onions! Growers lobbied a MI Congressman named Gerald Ford to push the law hoping it would reduce volatility. Since then onion price volatility has made swings in oil and corn look tame. On April 1 a lb. of onions was 7.5 cents down from 30 cents a year earlier! From this and other cases economist conclude that futures contracts generally dampen volatility.

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