This Author has just finished Rueter articles discussing the decline of the Wheat harvest this year, some 23% reduction of hard red winter wheat, and a projection of a 16% lower Wheat harvest overall for the Country. The projection will be even lower, if rainfall does not increase in the States west of the Mississippi. Too little rain, or too much at harvest time, could cut harvest yields in the northern States. The decline does not seem serious, but there are always complications. A short aside of history: The Tsar of Russia was brought down in 1917, bringing an eventual rise of Communism, because of the shortage of Food, where Wheat and Rye yields were down less than the current projection (remember that Russian acreage yeilds were far lower than in the current U.S., and alternative foods were only about 14% of present American options).
Why then the current worry?
Several things come to mind! Both China and India are rapidly driving their farming complement out of business; China by forcibly converting acreage to industrialization, and India through a poor agricultural policy bankrupting farmers with reduction of planted acreage and yields. The two greatest Populations in the World will be looking for purchasable Hard Grains this year. Numbers from other Countries have not been gathered by this Author, but north Africa is suffering from Drought conditions with already starving Populations. South American agriculture is switching from Grain production to ethanol production, or civil unrest is curtailing acreage harvesting. Eastern U.S. agricultural production may be drowned this year, as may be Western Europe. There may be extreme demand for Export Grains this Year.
A further trouble may come from Speculative sources. We have witnessed the huge rise in Oil prices since Speculative Cash moved from Stocks to the Commodities markets. It will not take long for Speculaters to notice there is an increased demand for Food grains on the international market. Americans have witnessed higher Driving Costs because speculative Fund managers wanted a higher Return on their money. We might get to watch People starve to death, courtesy of CNN, because these same Managers see rich Profits in Food Grains. lgl