"Crisis? What crisis?"
Posted on 04/27/2008 1:20:46 PM PDT by The_Republican
The globe's worst food crisis in a generation emerged as a blip on the big boards and computer screens of America's great grain exchanges. At first, it seemed like little more than a bout of bad weather.
In Chicago, Minneapolis and Kansas City, traders watched from the pits early last summer as wheat prices spiked amid mediocre harvests in the United States and Europe and signs of prolonged drought in Australia. But within a few weeks, the traders discerned an ominous snowball effect -- one that would eventually bring down a prime minister in Haiti, make more children in Mauritania go to bed hungry, even cause American executives at Sam's Club to restrict sales of large bags of rice.
As prices rose, major grain producers including Argentina and Ukraine, battling inflation caused in part by soaring oil bills, were moving to bar exports on a range of crops to control costs at home. It meant less supply on world markets even as global demand entered a fundamentally new phase. Already, corn prices had been climbing for months on the back of booming government-subsidized ethanol programs. Soybeans were facing pressure from surging demand in China. But as supplies in the pipelines of global trade shrank, prices for corn, soybeans, wheat, oats, rice and other grains began shooting through the roof.
At the same time, food was becoming the new gold. Investors fleeing Wall Street's mortgage-related strife plowed hundreds of millions of dollars into grain futures, driving prices up even more. By Christmas, a global panic was building. With fewer places to turn, and tempted by the weaker dollar, nations staged a run on the American wheat harvest.
Foreign buyers, who typically seek to purchase one or two months' supply of wheat at a time, suddenly began to stockpile.
(Excerpt) Read more at washingtonpost.com ...
What kind of wheat surplus does the US have? One year, two years, ... seven years, zero years??? Hard times may be rolling down the road.
First and foremost, I can't help but wonder if a big part of it isn't related to agriculture at all, but the falling value of the dollar. Combine that with a speculative futures market, and a perceived lack of supply in the future: I refuse to believe that there's an actual shortage of grains, given that we haven't been in the "ethanol business" all that long. It doesn't seem to me that enough of the cropland of the US has been turned over to corn to effect the rice crops elsewhere in the world... Given that we don't export all that much rice to begin with, and I believe that corn simply won't grow where rice will. There could very well be some shortages elsewhere in the world, due to panic buying AND panic "refusal to export" as we've seen from some countries. It's just that increased cost of foods seems to be completely out of whack with the possible causes of the increases.
I guess I'm just wondering if this isn't some sort of manufactured crisis, given that we're coming up on an election year. It wouldn't surprise me to learn that someone like Soros could believe that mass starvation in the third world might be worth getting what he believes is for the "greater good," i.e. what he wants politically.
I just find it difficult to believe that this is just "happening."
Mark
I have to agree with you, Mark.
The corn/ethanol thing has been a major topic for discussion ‘round my parts for several years now, but the rest of this seems to be too much, too fast.
I can’t help but wonder if it is a ‘fake’ crisis. We always have some calamity occuring in election years, depending on how bad the Dims want to win...and this year they must want it bad! Add a Dim majority in Washington and I smell fish.
Fungible ping.
You could believe that gold, oil and corn have all gone up about 3 times their value a few short years ago...
Or you could believe that an ounce of gold is always worth an ounce of gold, a bushel of corn a bushel of corn, etc., and that the dollar is worth about 1/3 of what it was worth a few short years ago.
I know people are going to tell me that the dollar hasn’t dropped that much against other currencies, but I don’t buy other currencies, I buy food and gas and etc. So I believe my wages are about 1/3 of they were a few short years ago.
Guns and Butter spending caused a mess when Johnson tried it. It will cause a mess again since Bush has tried it. I expect the next 10 years or so to be tough.
"Crisis? What crisis?"
The same creeps who’ve been trying to manufacture a recession since December are behind it. They announced the recession before then and coordinated new locks against new hires the first of December (a little earlier than the usual yearly plan). They sponsor most of the big media broadcasts and have been trying to foment depression in the countries of their trading partners (to bring their manufactured product prices back down), lower the price of oil and bring the dollar back up (to keep trade imbalances and their accounts growing).
But oil is still up, and the dollar is still down. Those trading partners still bought large oil contracts in advance along with more food reserves. They’re still raising their product prices (increasing domestic consumption in those nations and other trading partners for them). If the trends continue, the prevailing import businesses will fall. Then we’ll see less global market propaganda and more real domestic production. One problem for us is that none of the presidential candidates know what to do to get domestic production going fast enough again.
They should have worked to nominate Duncan Hunter.
***The corn/ethanol thing has been a major topic for discussion ‘round my parts for several years now, but the rest of this seems to be too much, too fast.
I can’t help but wonder if it is a ‘fake’ crisis.***
The rice shortage in the Philipines has been blamed on ethanol production. So, did the Philipinos destroy their rice paddies to plant corn?
You can make ethanol from any grain.
We grow and export a decent amount of rice but the world rice supply has little to do with the United States.
As far as I know the problem in Asia is lower harvests and more people
But I believe we are bumping up world corn, wheat and soybean prices by making ethanol. Less wheat and soy is planted and more corn is planted. Less corn wheat and soy is exported. So this bumps up those world markets and also bumps up rice a bit by osmosis
Ethanol is a scam but many forces are raising food commodity prices. Ethanol being one of them.
Schafer said. “Coarse grains are forecast to rise 10.9 million tons to 70 million tons and wheat should rise 2.3 million tons.”
http://southwestfarmpress.com/markets/farm-exports-0222/
Not really. The main problem is that hundreds of millions have climbed out of poverty in the last few years and are finally able to eat something besides grain.
It takes 5 to 10 pounds of grain to produce a single pound of meat. Do the math.
The world's consumption of grain has exceeded production for six of the last seven years.
What kind of wheat surplus does the US have? One year, two years, ... seven years, zero years??? Hard times may be rolling down the road.
I doubt it. The American farmer is responding by planting millions of acres of wheat. Driving through the country I’ve seen more wheat fields this year then I have in the last 45 years.
After the wheat is harvested I suspect many farmers will double plant soybeans.
Answer is zero years. The latest figure I seen was 54 days estimated at this years harvest.
"KANSAS CITY, April 16: The world has “never been less secure” about the near-term future of wheat, US Agriculture Secretary Edward Schafer told food aid groups on Wednesday.
Schafer told the International Food Aid Conference meeting here that global wheat stocks are at historic 30-year lows and US wheat stocks are at 60-year lows. Against that background, the highly virulent African stem rust is quickly spreading to places such as Uganda, Ethiopia, Yemen, India, Pakistan and now Iran.
“With over 75 per cent of US wheat acres planted to varieties that are highly susceptible to this disease, the threat here at home is real and it is urgent,” he said. The disease, which is carried by wind spores, would be devastating to global food supplies if it affects the US wheat crops, now valued at $16 billion."
http://www.dawn.com/2008/04/17/top17.htm
And the soybean situation is no better.
.
"The US soybean stockpile will shrink to less than a three-week supply before this fall's harvest, and voracious demand around the world is also thinning US wheat supply, the government said"
There is no problem ping. #16
Food is no more essential to basic existence than energy, in the modern civilized world.
If the nutjobs get their way and we return to the 7th century, all bets are off, but until then, the US can wield the big stick. I would hope that exports to OPEC countries would be most heavily controlled and most heavily priced.
Even if OPEC feels that other suppliers of surplus food (Canada comes to mind) would abandon OFEC, the transportation costs to where food will be most needed in the foreseeable future, from where they are presently mostly grown in surplus would render any argument somewhat empty.
Payback's a bitch...
Yep, if that wheat rust blight reaches the USA, it’s going to get ugly fast.
Anybody remember Irish history, and the potato blight? When you combine food monoculture with a blight, it can lead to famine in a hurry.
Yep, if that wheat rust blight reaches the USA, it’s going to get ugly fast.
Anybody remember Irish history, and the potato blight? When you combine food monoculture with a blight, it can lead to famine in a hurry.
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