America's grain stocks running short (food security and export control?)

The Grand Island Independent ^ | 02/24/08 | By Robert Pore

[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.

[Western Phil]

“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.”

The FDR/Truman and following ag was to limit acreage and buy up excess production at a more or less fixed price. The government right now has no farm program. The recent “Freedom to Farm” ag law was put in place in the 90s when the Asian and Russians bought our excess production. I understand that our government no longer buys grain, but the “Freedom to Farm” law provided that if the market price dropped to some ridiculously low value, the ferment would pay the producer the difference between that value and the market price - kind of a floor. The floor value hardly covers production costs.

The Russian and Asian economies tanked, in my opinion greatly influenced by an individual who benefits greatly from international monetary chaos and the commodity prices went below that floor value. They stabilized at that low level until the ethanol “boom” the last year or two.

[Western Phil]

“So you’re in favor of mandated ethanol consumption; Why not remove the government mandates and let the free market decide what farmers produce?”

It is my understanding that the “ethanol mandate” is a clean air requirement for fuels. The previously required substance does bad things to ground water if gasoline leaks into the earth.

[BallandPowder]

Powder..patch..ball FIRE!!!

>>If they pull the same crap they pulled back in 1973 like slaughtering calves and chicks before they went to market, then their arses should be tossed in jail.

Their property they can do what they want. This is not Chavez’s country.

When corn was $2.30 a bushel a couple of years ago did you bitch about farmers not being able to make their payments?

[JustDoItAlways]

Wheat prices always go up when the climate is colder.

[Etoo]

[Fuel grade ethanol is bad because you know some drug addicts?]

 

The American Heartland once served as the moral ballast for our Nation.  Meth, combined with the '80s farm-crisis, has removed much weight from the Midwestern keel of American conscience.

 

Morality is so inconvenient, and unprofitable.  Pitiful is the Consumer who discovers the hard way why gluttony is one of the 7 deadly sins.

 

Perhaps, Mr. Lucky, you would grow Opium on your private property if it were legal to do so?

 

[Mr. Lucky]

I think you just argued that corn should be illegal because opium is.

[Toddsterpatriot]

I think the noob is going off the deep end.

[Etoo]

[It is my understanding that the “ethanol mandate” is a clean air requirement for fuels.]

 

Yes, that is the primary rationalization. 

 

Environmentalism has always been a favorite mechanism by which the Communists/Corporatists have manipulated the public.

 

Nobody wants to see a warm puppy get squished. Save the puppy!   But what's going on, out of sight, while your attention is on the puppy.....?

[Toddsterpatriot]

Great. What about getting rid of the mandate?

[Etoo]

[I think you just argued that corn should be illegal because opium is.]

 

Depends how corn is used.

 

Opium is illegal because it is immoral to enslave someone via the tyranny of their own appetites.

 

It's hardly a new idea that the habits of the consumer public are deliberately manufactured.

 

Just ask...

 

George Orwell
Robert Heinlein
Joseph Conrad
.
.
.
George Lucas

 

 

Welcome to the hive of hypercapitalistic corporate communism.

 

Buy More,  Bee Happy.

 

[Mr. Lucky]

Aw jeez, you joined FreeRepublic to whine about "corporate communism" to a farmer?

Will this corporation send someone over to break the ice out of my water tank in the morning? To clean off my feed lot while the weather is warm enough that the mix of manure and urine doesn't freeze solid, but still cold enough to run the spreader over my 2008 corn ground? Maybe the corporation could run down to Portland and sit in line all day to pick up a load of DDG's or at least pay the fine if DOT notices that one of the marker lights is the wrong color. Certainly the corporation will stop by this summer and drive the haybine, and help with prayers that the rain holds off until after baling is finished. And what if Mrs. Lucky bales another rattlesnake this summer? She says she's gettin a job in town if that happens again; does the corporation have someone else they could send over to be by business partner and nurse and spiritual adviser and cook for the last couple of decades of my life? Could the corporation at least send somebody over to help with the first calf heifers?

You seem to know that this farming for a profit is all pretty easy after all, no more difficult, in your opinion, than becoming a junkie.

[Etoo]

[You seem to know that this farming for a profit is all pretty easy after all]

 

Nope.  Judging from what my wife's family says, it was hard, good, honest, work.  They lost their farmland when her dad fell ill from cancer 20 years ago. 

 

Today, the local cheese factory won't even bother with small operations like theirs anymore.   Gotta have at least (IIRC) 1000 cows or they won't do business with ya.

 

The traditional family farm is a thing of the past.  If you're able to be an exception, then kudos and good luck to you.

 

Then there's the local cement factory near my wife's home place that just got purchased by Mexicans.  Gotta launder those meth profits don't ya know...

[Etoo]

[Will this corporation send someone over to break the ice out of my water tank in the morning?]

 

Nah, that's what serfs are for.  

 

Usus Fructus.

[Balding_Eagle]

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!

OK, I readily admit that this is unfair, as you have been very candid with me, but I've trapped you a bit.

I'm sure you remember Gulf War I. That war was fought for the express purpose of insuring the free flow of oil. It was a justified war, one that most patriotic Americans supported, including both you and me I'm sure.

That was a subsidy to the oil companies. Imagine for a moment if we had left it to the oil companies to figure out what and how to deal with Sadam. They may very well have come to some terms, but probably not the terms we have today.

[Toddsterpatriot]

That was a subsidy to the oil companies.

Really? Which oil companies benefited?

[Balding_Eagle]

Thanks for that, now that you remind me, I do remember those things.

Something similar happened in the 90’s (I think that was the time, I had already left farming) but hogs went down to 10 cent lb. It was caused by over production, the ever-present nemesis of the farmer.

That meant you could buy an entire market hog for $20. Having raised over 200,000 hogs myself, I know that those guys had at least $80 in each animal. That lead to bankruptcy for a lot of hog farmers, opening the door for the mega hog farms that raise several hundred thousand market animals each year.

[Balding_Eagle]

The companies who were in the oil business in that part of the world.

I don’t know their names, but your question made me realize that it may not have even been American companies who were benefiting from our subsidies.

[Toddsterpatriot]

The companies who were in the oil business in that part of the world.

Wouldn't oil companies benefit more from their oil going up to $200 a barrel? I think maybe the oil consumers benefit from that subsidy.

[Balding_Eagle]

Maybe. Call it an unwanted subsidy.

The same is true for the money going to the famrers.

I was opposed to the farm programs even when I began farming in 1969. I probably inherited that dislike from my father.

Nevertheless, we were both enrolled.

Although the paperwork was long, it basically asked: Do you want to farm? YES, or NO.

If YES, sign up.

[Balding_Eagle]

I think maybe the oil consumers benefit from that subsidy.

Just as the consumers benefit from the subsidies paid to farmers. The farmers ended up in a financial trap, the consumers ended up with cheap food.