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
Print Story | e-mail Story | Visit Forums
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.
LOL! In the era of “free trade” we have hyper-inflated housing prices, massive inflation of energy prices, massive inflation of food prices.... LOLOL. This is all happening because of your phony “free trade” agenda.
Please explain how ending “free trade” will fix any of those problems. LOL!
Aha! You are now calling it “free trade” too! Clearly you understand it is a false name.
So, how will raising tariffs and barriers to trade fix those problems? LOL!
—So, how will raising tariffs and barriers to trade fix those problems?—
This will compel the United States to manufacture items it was formerly purchasing overseas. This will have 2 beneficial effects:
1. It will help reestablish our dying manufacturing base, thus recreating well-paying jobs for people lacking higher education.
2. If we produce these items ourselves, we will be less prone to price fluctuations for them on the world market.
Here is another view on soaring commodity prices. Jump on the market bandwagon by trading call/put options contracts and profit, which shall greatly ease the additional price shocks at the supermarket and gas pump.
I retract my statement about the programs not saving the consumer money at the grocery stores.
The farm programs do save consumers money at the grocery store. You can calculate the savings for yourself.
The real effect of farmers being able to financially leave the programs will not be felt at the grocery store until this this summer.
How much did you and your family spend in groceries last year? How more are you spending now? How much more do expect to spend by summertime, when the effect of the 2007 crop will have worked it's way though the system, with the price of milk, meat eggs etc. reflecting the new economics of a 'no farm program anymore'.
The farm programs cost about $20 billion each year. That’s about $70 per person, $280 for a typical family of four.
Calculate from that whether the farm programs have personally saved you money.
I'll make another guess. They have.
Making gym shoes here will create well paying jobs here? How many?
2. If we produce these items ourselves, we will be less prone to price fluctuations for them on the world market.
Yeah, if you pay twice as much to make an item here, it is less likely we'll be hurt by price fluctuations. Doesn't mean it's a good idea.
What about oil? We import about 60% of our daily usage. Do we need to raise tariffs on imported oil? Would that create more high paying jobs here?
—Making gym shoes here will create well paying jobs here? How many?—
Probably lots of jobs. Sneakers wear out all the time, and styles change.
—What about oil? We import about 60% of our daily usage. Do we need to raise tariffs on imported oil? Would that create more high paying jobs here?—
If it forces drilling in ANWR and off the coasts, and development of a synfuels program based on coal (the Germans did it successfully in WW2, with old fashioned technology!) then, yes.
Yeah, all the consumers who don't pay taxes to support the farm programs might see lower prices. Some people think the subsidies actually raise the price of food.
How much did you and your family spend in groceries last year?
How much did we spend on Federal taxes to pay for the farm programs?
How much more do expect to spend by summertime, when the effect of the 2007 crop will have worked it's way though the system, with the price of milk, meat eggs etc. reflecting the new economics of a 'no farm program anymore'.
What do you mean by 'no farm program anymore'?
I'll make another guess. They have.
I'm stunned by the fact that you think a government program which distorts markets would somehow save us money.
I retract my statement about you being smarter than that.
Will these be high paying jobs? How much will they pay?
If it forces drilling in ANWR and off the coasts, and development of a synfuels program based on coal (the Germans did it successfully in WW2, with old fashioned technology!) then, yes.
Drilling in ANWR is a great idea. But you really think raising the price of oil would be a net plus?
Feel free to make gym shoes here. I’m sure it pays big bucks. Maybe when you’re done trimming the bushes. LOL!
How will drilling in ANWR raise oil prices?
—Will these be high paying jobs? How much will they pay? —
As much as the market will bear
—Drilling in ANWR is a great idea. But you really think raising the price of oil would be a net plus?—
In the short term no. But as more domestically produced oil enters the US market, the price will drop. Besides there are hidden costs in imported oil such as military protection of oil producing countries like Iraq and Saudi Arabia; the domestic security costs stemming from our involvement in these places; naval defense of sea lanes tankers use to transport the oil. If most of our energy was produced in the USA, with the remainder from Canada and Latin America, our defense costs (i.e. the hidden energy costs) would drop substantially.
Raising tariffs on oil will raise prices. I’m all in favor of drilling in ANWR and offshore Florida and California.
You mean the market after you raise tariffs.
In the short term no.
Yeah, no kidding. Think that might cost jobs?
But as more domestically produced oil enters the US market, the price will drop.
Would it drop back to the level before you hiked tariffs?
—You “free traders” have sold out the American economy and now it’s in shambles. All it took was two decades of “free trade”. LOL. The old soviet communists must be jealous, they have worked on destroying the US for almost a century.—
The Bolsheviks were too unimaginative and downright stupid to destroy the US economy. Such a task took Yankee ingenuity to pull off!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.