Skip to comments.America's grain stocks running short (food security and export control?)
Posted on 02/25/2008 5:08:27 AM PST by TigerLikesRooster
America's grain stocks running short
By Robert Pore email@example.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.
>>Da, comrade. The kulaks are enemies of the State.
The majority of American Kulaks (small family farmers) were driven out of business decades ago.
Last time we visited what’s left of my wife’s family farm in SD, I was struck by the presence of “BP” signs on gas stations that had previously been under American control. Coincidental to this is the explosion of gambling facilities in the state. It seems there were slot machines available at every exit.
Tyranny of the appetite.
I have a solution for all of these folks with nothing but contempt for farmers and ranchers. They should begin a complete and total boycott of every product produced by farmers and ranchers. Who needs those greedy so-and-so's anyway?
No more trips to the grocery store. Tonight for supper, go out in back of your home. Hunt and gather. Get something out of the garden. It's easy!
Supporting American Farmers and Ranchers in getting a fair price for their products - whilst reducing dependence upon foreign oil is one thing.
Gouging American consumers so Chinese communists can purchase and drive automobiles for the profit of globalist carpetbaggers is quite another.
Protectionists and other economic know nothings think that raising tariffs, taxes and restrictions will lower prices.
Our biggest pricing issues in Ag is typically that everything is so over produced we cant make ends meet.
predictions, predictions, predictions
with failure to predict - recognize
that conditions are not static
to the extent that shortages produce higher prices, they also induce others, here and abroad, to become producers
in the long run there is no calamity waiting, only new producers and new market
First “Big Oil,” now “Big Food.” The government must save us! Where can we find an articulate, black man to save us from the market?
If you feel you are being gouged, don’t buy. Provide food and other necessities yourself. If the system is flawed, work toward repairing it, don’t bite the hand that feeds you.
Be careful what you wish for...you might get it. The grain farmers have worked hard to find markets for their excess production.
The government is responsible for skewing the corn market by subsidizing ethanol production. Perhaps that needs some attention/curtailment.
The "ag lobby" has no duty to put the American consumer first. Their "duty" is to turn on profit on the capital investment in land, equipment and supplies to their investors. The final consumer of their product is not a consideration.
Buy oil stocks or grain futures!
Real Nice! The Revolution Will Not Be Televised.
The corn market in Idaho has spoken. The animal feeding operations were willing to pay more for the corn to make food (feed livestock) than the market price of ethanol would support. Two ethanol plants have been idled because they aren't economically viable.
I have an objective outlook unlike corn farmers who are knee deep in government mandates and subsidies. There is a growing (no pun intended) conflict between fuel and food. We have never had fuel mandates, especially the huge size of these mandates. The impact of the fuel mandates is difficult to determine. In the short run, ethanol mandates along with other factors (global demand, oil prices, and weak dollar) are leading to strong inflationary pressure.
The increase in future corn production is heavily driven by ethanol mandates and subsidies. Making corn more attractive to produce than other crops has already had many negative side effects. You could apply your argument to any good or service. Simply have government provide huge mandates and subsidies to shift demand. Government mandates and subsidies of the ethanol size will have many negative long-term impacts on any good or service.
I find the ethanol mandates and subsidies ironic. I have never read anything that indicates corn-based ethanol will ever be a viable alternative to petroleum. Somehow the ethanol mandates have been justified on the basis of some future biofuel source that will be economically viable. Bottom line: corn-based ethanol is a fraud with huge negative economic repurcussions in the short-term and long-term.
It’s a good thing food isn’t part of the core inflation calculations, isn’t it?
No. We don't.
The light up ahead is a train. ....as in train wreck.
Wow. Where to begin?
Are you seriously suggesting that the world will be a better place if there is NO FOOD, than if abundant food is expensive?
Starving people never revolt, or go to war for resources in your happy little world, do they?
Which, of course increases the supply, lowering the unit price, but raising the farmer's income because of shear volume.
Everyone eats, and the farmers get paid.
No one is gouging. Crop prices respond quickly to the laws of supply and demand. Witness the plummet in corn futures back in march/April of this year when the anticipated plantings report came out.
Farmers indicated that they were going to plant for the largest corn crop in the entire history of the earth. Futures plunged on the report 25 -30% as I recall (someone please correct me if I'm wrong). The farmers came through with their plans. they harvested the largest corn crop ever, about 13 billion bushels.
What this year is bringing is a situation where the old "Farm Programs", more properly should be named "Cheap Food for Consumers Programs", are no longer a restraint on farmers.
This year, it looks like farmers will plant in response to a free market instead of a government calculated plan.
They are understandably very nervous, no one has done that for over 50 years. Imagine that, 50 years! Is it going to result in financial ruin, financial success, or what? It will be exceiting either way. I wish them well.
In any event, for the next few years at minimum, the USDA's Cheap Food for Consumers program is not working.
We are going to be forced to buy food at unsubsidized market prices.
Rush has said that the most expensive commodity traded in the United States is ignorance. It's certainly true of the farm programs. Everyone thought food would get cheaper without those programs, and wanted them gone. They now have their wish, they're gone, and understandably the same folks aren't happy.
Then I heard what sounded like a voice among the four living creatures, saying, "A quart of wheat for a day's wages, and three quarts of barley for a day's wages, and do not damage the oil and the wine!"
And we are being MANDATED to burn food at record levels while we leave crude [which has very little nutritional value] sitting in the ground.
wait til we have a major dry year nationwide, and are forced by congress to eat or produce billions of gallons of ethanol... LFOD...
HINT: It’s not actually in our national interest to have the government pass a program like has been suggested. How about citizens do for themselves what they should do and the government do the things its explicitly charged to do? People can and do buy their own food you know.
...do not damage the oil and the wine!"
I'm no Bible expert, but, removing feedstocks from the biodiesel/ethanol loop would quite literally damage the "oil" and "wine"...
Thank you. Well said. Populism is really ugly, isn’t it.
The cost of my dog food- cheap brand- not a yuppie brand- has risen 62.5 % in the past 3 years.
Mine went up 20% in the past week, so I know exactly what you mean. Cat food is the same.
>>No one is gouging. Crop prices respond
>>quickly to the laws of supply and demand.
Gubmint mandated ethanol requirements have manipulated demand.
Get rid of ethanol mandates and let the market work.
Don't get me started.
The last tank full was purchased at $3.019/gal, the current tank cost $3.399/gal.
It was the cheapest I could find...
I paid $3.09 this morning. Last week it was $2.89.
I’m plotting out my garden as we speak. I’m adding 5,000 square feet to it this year.
Plant a bunch of Cobaifera trees...
Let them eat cake. Roger. Message understood.
>>Provide food and other necessities yourself.
I can do that. Millions of citizens who’ve been made dependent a system that manipulates and profits from the tyranny of their own appetite, can not.
>>If the system is flawed, work toward repairing it,
>>dont bite the hand that feeds you.
>>made dependent a system
=made dependent by/upon a system
More like a PINO.
That was in 1980. 1973 was about grain and oil prices.
IN a country where most adults are overweight, maybe higher food prices would be OK.
What happens, of course, is that you get MORE of the commodity, accumulating a surplus. That appears not to be the problem.
Should we do the same with the oil subsidies?
Our farm subsidies used to produce surpluses, which we often gave away as part of our aid programs. We also paid farmers not to put land into production. Times have changed, but we still have huge farm subsidies.
Not for a long period. Look at his signup date.
>>Rush has said that the most expensive commodity
>>traded in the United States is ignorance.
Lush Rimbaugh is nothing but a shill for the manufactured dialectic right. How’s he doing with his substance abuse problem?
>>They now have their wish, they’re gone,
Replaced by mandated Ethanol consumption.
Do I dare ask what that is????????
Lush Rimbaugh is nothing but a shill for the manufactured dialectic right. Hows he doing with his substance abuse problem?
LOL! He's doing just fine I'm sure.
Couldn't give a rational response to his wisdom could you?! Chuckle.
The people who understand economics and government programs didn't think food would get cheaper. Did you?
Implied in my post was the fact that if the Cheap Food Program for Consumers was going to be retired, it was going to take some outside force acting on the market to push crop prices up.
I apologize, I should have known it would need to be explained to you.