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'll bet food was cheaper. As long as you ignore the tax dollars spent on those programs.
I would love to get rid of any subsidies for oil as the price to get rid of all farm subsidies. Let's start today!
My Nutri-grain waffles have gone up 10 cents two weeks ago, so has bread.
Yikes!
With the country recently facing milk shortages, Chavez said "it's treason" if farmers deny milk to Venezuelans while selling it across the border in Colombia or for gourmet cheeses.
http://www.msnbc.msn.com/id/22759138/
If ethanol were consumed only in response to a government mandate, presumably the production (and consumption) wouldn’t exceed that mandate.
>>I’ll bet food was cheaper.
>>As long as you ignore the tax dollars
>>spent on those programs.
And if those tax dollars are not ignored?
Ethanol is simply another form of government mandated farm subsidy.
It’s as cleverly UN-hidden as the socialist subsidization of housing that’s being provided via the sub-prime fiasco.
What an interesting coincidence it is that both pogroms are being further subsidized via the Fed’s policy of monetary inflation.
>>If ethanol were consumed only in response to a government
>>mandate, presumably the production (and consumption)
>>wouldn’t exceed that mandate.
Welcome to the corporate communist state.
Why would you ignore those tax dollars? If food is $1 cheaper but my taxes are $2 more expensive, I don't consider that a good deal. But then again, I'm not a farmer.
Ethanol is simply another form of government mandated farm subsidy.
Exactly. We need to get rid of the early Iowa caucuses. Then politicians would be less eager to throw money at that wasteful "solution" to our energy needs.
You may avoid addressing the issue however you want, but the fact remains that the US consumes more ethanol than the government mandates. The value of fuel grade ethanol moves in sympathy with the value of gasoline.
Are you in favor of removing the mandates?
The value of fuel grade ethanol moves in sympathy with the value of gasoline.
Are you in favor of removing the blending credit?
Absolutely. The blending credit is, in fact, a subsidy to the oil industry, not farmers. To the extent that the credit allows inefficient ethanol producers to stay in business, it dampens progress in the industry much the way that, say, the prospect of government handouts in New Orleans has dampened private initiative.
” 1973 was about grain and oil prices.”
It was probably in the spring of 1973, wheat prices were about $1.50/bushel. We were driving to Albuquerque and stopped to eat in Amarillo. Don’t remember if it was USDA or the Texas ag people, but the advice to the Texas wheat farmers was to pasture your wheat and don’t bother to let it mature. It would be worth more as beef than grain. Not long after, Nixon sold a potful of wheat to Russia and the price went up to $5/bushel. That price spike did not last long and soon wheat prices were around $2/bushel. They have remained at that level up till the last year or so.
Yipes!
Fuel grade ethanol is bad because you know some drug addicts?
No, the answer is to raise prices, increase profits for farming, increased exports help the trade deficit, encourage more food production, which will in the long run help strengthen the dollar, keep food prices down and increase the buying power of Americans.
Protectionist policies will only hurt the economy in the long run because low profits will drive people away from farming, resulting in less food produced, which will raise both domestic and international food prices for everyone in the long run.
seem to be too many geniuses in the congress and a president who likes to extend a hand to the left.
I don't know if anybody has answered you as I haven't scanned the whole thread carefully. In that time period( I don't know if it was exactly '73) there were news accounts of farmers digging trenches with bulldozers and killing and burying their cows rather than sell for a loss. They couldn't afford to feed them and take the price meat was going for. A similar thing happened with milk farmers, they poured out their milk for the camera's rather than sell it. Then they too sent their cows for slaughter because they couldn't feed them. Shortly after that, for several years, the big story was farmers going belly up and moving to the city after several decades of family farming. There were televised farm auctions where people were buying their lifelong friends personal belongings for a dime on the dollar. It was quite disturbing for me, not so much for the personal drama's of the poor people, but for the loss of farmland to developers, never to be farmed again. We were lulled into thinking the land was worth more with malls on them, but I always wondered what we would do when we NEEDED the food. As a side note, this was also the rise of the corporate farm. They would buy several farms to make mega farms and drive the neighbors out of business because THEY got the biggest subsidies. That is still true today. Some "farmers" are drawing $20million on Wall Street, while the family guy gets a chump change.
I find it objectionable to subsidize farmers to keep them afloat, but OTOH, if they fall on hard times, it's not like you can knock down a mall and parking lot to plow it up for food. Once it's gone, it's gone. Hawaii is sort of going through this now. They will no longer have any pineapple or sugar cane farms soon, because the land is worth too much to grow crops when you can put up a multimillion dollar high rise. When a farmer that paid $200 and acre for his land can get $5000 and acre, why would you just not sell and clip coupons?
Yipes!]
Hmmmm, I wonder if this means there will be less subsidized cornsyrup hidden in our foods... and a lower incidence of the associated diseases, like obesity and diabetes?
Nah. probably not. Obesity and diabetes are ENORMOUSLY profitable; plus, the resulting early deaths help lower the expenditures of Social Security and other entitlement programs. Corn is quite the wonder-food when viewed from the proper economic perspective.
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