Posted on 02/25/2008 5:08:27 AM PST by TigerLikesRooster
America's grain stocks running short
By Robert Pore robert.pore@theindependent.com
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Global demand for grain and oilseeds is at record levels, causing the nation's grain stocks to reach critically low levels, according to Purdue University agricultural economist Chris Hurt.
With a weak U.S. dollar and global demand so high, foreign buyers are outbidding domestic buyers for American grain, Hurt said.
"Food consumers worldwide are going to have to pay more," Hurt said. "We ended 2007 with our monthly inflation rate on food nearly 5 percent higher. I think we'll see times in 2008 where the food inflation rate might be as much as 6 percent."
Increasing food costs will ignite the debate on food security this year, Hurt said.
"We'll have discussions about whether we should allow the foreign sector to buy our food," he said. "Is food a strategic item that we need to keep in our country?"
The USDA recently released a revised forecast for agricultural exports, predicting a record of $101 billion for fiscal year 2008.
According to the U.S. Grains Council, a significant increase in feed grain exports buoyed the forecasts. Specifically, the forecast for coarse grain exports is raised to 70 million tons, up 2 million tons since November. Corn and sorghum exports are up $2.4 billion from November. Coarse grain exports are forecast at $14.1 billion, $4.3 billion above last year's level.
Hurt said the 2007 U.S. wheat crop is virtually sold out, while domestic soybean stocks soon will fall below a 20-day supply. Corn inventories are stronger, but with demand from export markets, the livestock industry and ethanol plants, supplies also could be just as scarce for the 2008 crop.
More than 70 percent of Nebraska corn crop this year could go to ethanol production.
But what concerns Hurt the most is weather. Adverse weather could trim crop yields this year and cause crop prices to skyrocket even further.
Last year, Nebraska had a record corn crop of nearly 1.5 billion bushels. But rainfall was exceptional last year, especially during the growing season, which helped increase crop yields.
He said recent cash prices for wheat, soybeans and corn are up dramatically from two years ago. Wheat prices have been near $10 a bushel, more than $6 a bushel higher. Cash prices for soybeans are about $13 a bushel, up more than $7 a bushel. Corn is pricing at almost $5 a bushel, an increase of greater than $3 a bushel.
I know, back in the 1950’s there were fleets of old WWII Liberty Ships in the Hudson, and they were filling them with grain because they were out of storage silos.
I've understood this from way back in the 70's when I chaffed under the 'Cheap Food for Consumers Programs' as a farmer myself.
From the ferociousness of the threads about food prices, I would say that the majority of folks here didn't realize it.
Welcome to FR...
Yes, you dare...
I apologize. I misread your post. I thought it said food would get cheaper with these programs. Of course meddling with the markets and spending tax dollars will raise the cost we pay for food (and taxes).
You don't think these market meddling Congresscritters really lowered the cost to Americans for food, do you?
LOL!!!!
I think I’ll stick with corn and other veggies, rather than some sci-fi plants :)
You’re thinking of trifids. The Cobaifera tree is also know as the Diesel tree, its sap can be used as a motor fuel without further refining.
[it was going to take some outside force acting on the market to push crop prices up]
Thanks for admitting that ethanol is not an economically viable energy source without government mandates.
So you’re in favor of mandated ethanol consumption; Why not remove the government mandates and let the free market decide what farmers produce?
Would we be getting rid of taxes on oil? Would we get rid of the whining about oil imports?
>>Buy oil stocks or grain futures!
When exactly was it, when morality became dependent upon the number of 0’s to the left of the decimal point on one’s portfolio statement?
Exactly when you joined FreeRepublic and became an instant expert on how other people’s property should be valued. You’re free to buy as many bushels of corn and do whatever you want with them, eat them, feed them to your cows, give them away to the deserving inhabitants of some third world cesspool, whatever.
Gotcha! I was confugled :)
It's 2008. The Cheap Food for Consumers is out of business this year.
You have your wish.
Based on history, I'm guessing you're not going to be happy.
Is that a long winded yes?
There's 50 years of history to back up up the fact they been very successful in doing so.
Well, OK, not Congress, but it is done by the USDA under their authority.
*shrug* Welcome to my world!
No to both.
The question hangs in the air, should we end subsidies for oil?
You could have just asked, I would have given a candid answer.
I hear ya! I’m generally in the same world.
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