1. The Topic of the Month for October is "Make this the Perfect Bugout Location". Please join the discussion in the TOTM forum.

New Crisis

Discussion in 'General Survival and Preparedness' started by Seacowboys, Jan 5, 2008.

  1. Seacowboys

    Seacowboys Senior Member Founding Member

    A new crisis is emerging, a global food catastrophe that will reach further and be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire, Donald Coxe, global portfolio strategist at BMO Financial Group said at the Empire Club's 14th annual investment outlook in Toronto on Thursday.
    "It's not a matter of if, but when," he warned investors. "It's going to hit this year hard."
    Mr. Coxe said the sharp rise in raw food prices in the past year will intensify in the next few years amid increased demand for meat and dairy products from the growing middle classes of countries such as China and India as well as heavy demand from the biofuels industry.
    "The greatest challenge to the world is not US$100 oil; it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically," he said.
    The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.
    Mr. Coxe said in an interview that this surge would begin to show in the prices of consumer foods in the next six months. Consumers already paid 6.5% more for food in the past year.
    Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade.
    At the centre of the imminent food catastrophe is corn - the main staple of the ethanol industry. The price of corn has risen about 44% over the past 15 months, closing at US$4.66 a bushel on the CBOT yesterday - its best finish since June 1996.
    This not only impacts the price of food products made using grains, but also the price of meat, with feed prices for livestock also increasing.
    "You're going to have real problems in countries that are food short, because we're already getting embargoes on food exports from countries, who were trying desperately to sell their stuff before, but now they're embargoing exports," he said, citing Russia and India as examples.
    "Those who have food are going to have a big edge."
    With 54% of the world's corn supply grown in America's mid-west, the U.S. is one of those countries with an edge.
    But Mr. Coxe warned U.S. corn exports were in danger of seizing up in about three years if the country continues to subsidize ethanol production. Biofuels are expected to eat up about a third of America's grain harvest in 2007.
    The amount of U.S. grain currently stored for following seasons was the lowest on record, relative to consumption, he said.
    "You should be there for it fully-hedged by having access to those stocks that benefit from rising food prices."
    He said there are about two dozen stocks in the world that are going to redefine the world's food supplies, and "those stocks will have a precious value as we move forward."
    Mr. Coxe said crop yields around the world need to increase to something close to what is achieved in the state of Illinois, which produces over 200 corn bushes an acre compared with an average 30 bushes an acre in the rest of the world.
    "That will be done with more fertilizer, with genetically modified seeds, and with advanced machinery and technology," he said.
  2. Tango3

    Tango3 Aimless wanderer

    Saw that, I can pretty much just stop driving($100 oil), kinda partial to eating though
  3. Seawolf1090

    Seawolf1090 Adventure Riding Monkey Founding Member

    We Americans eat far too much meat to begin with - and I say that as a dedicated 'Semi-carnivore'! If this encourages more of us to eat less, so much the better.
    If gas prices get too ridiculous, I can ride the Mountain Bike in to work - but traffic needs to be seriously reduced before I'd chance it, as I have to do half the trip on a major highway.
    We really need to get more into using sugar crops as fuel, not grain. The percentage of alcohol produced is far greater per pound of raw material.
    Brazil is a major producer/user of alcohol fuels, and they don't get it from corn!
  4. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

    Let me tell a little story called CRP, out here we have millions of acres not being farmed that used to be , the Gov instituted CRP so when the demand goes up, there will be lots to come out of the west that isn’t in production now that are mere grass lands.
    Crop Rotation in the Grain Belt </NYT_HEADLINE><NYT_BYLINE type=" " version="1.0">
    </NYT_BYLINE><NYT_TEXT>GARDEN CITY, Kan. — Once the driving force behind transforming the United States into the “breadbasket of the world,” wheat is being steadily replaced by corn as the crop of choice for American farmers. Genetic modifications to corn seeds, the growing demand for corn-based ethanol as a fuel blend and more favorable farm subsidies are leading farmers to plant corn in places where wheat long dominated. In Kansas, known for a century as the Wheat State, corn production quietly pulled ahead of wheat in 2000, with Kansas producing 23 percent more corn than wheat last year.
    This year’s drought-ravaged crop is expected to be the second-smallest harvest for American farmers since 1978. It follows a year in which American farmers planted the fewest acres of wheat since 1972. And while corn acreage nationwide passed wheat about a decade ago, its footprint and that of soybeans are spreading across a greater swath of the Midwest, farther north and west into the Dakotas and central Minnesota — traditional wheat country, where growing corn and soybeans was once almost unthinkable.
    “It is getting harder and harder for American farmers to say they feed the world,” said Ken Cook, president of the Environmental Working Group, an environmental research group based in Washington. “Instead, they feed S.U.V.’s.”
    The decline of wheat and the broad relandscaping of America’s farmland have come about for several reasons. Better seed technology has given corn and soybeans a widening edge over wheat, and more favorable subsidies have encouraged farmers to abandon wheat. Changing consumer tastes and food packaging advancements have slowed American wheat demand.
    But the growing biofuels industry is creating the strongest drag on wheat lately, as corn and soybeans are increasingly favored for their use in ethanol and biodiesel.
    The spread of corn and soybeans at the expense of wheat, while not expected to significantly affect food prices, could nevertheless put more pressure on scarce water supplies, since both crops are more water- and energy-intensive than wheat.
    But the water scarcity has not deterred John Lightner, a 58-year-old farmer in Garden City, Kan., in the heart of the Wheat Belt that stretches through the arid, wind-swept Plains states. Mr. Lightner, who is planting more corn these days, said he was lured by the promise of earning higher profits and lately, a chance to ride the corn-fueled ethanol wave that is sweeping across the Midwest.
    “The return on wheat is just not that great, and with corn, well, there is more potential,” Mr. Lightner said as he surveyed his 650 acres of cornfields just weeks before harvest. He began shifting from wheat to corn 15 years ago. Then, this year he rededicated his farmland to corn by investing in a 55-million-gallon ethanol plant being built in town, which, he said, will need all the corn it can get.
    Wheat has long been associated with the United States’ standing as the breadbasket of the world for its ability to feed the world through food shipments. American presidents used wheat to support Allied troops in both world wars and tried to wield it as a diplomatic weapon against the Soviet Union. Huge wheat surpluses regularly helped the United States balance its trade deficits.
    In the early 1970’s American farmers controlled half of the world’s wheat exports, but this year the United States will account for just 22 percent, according to U.S. Wheat Associates, an export trade group.
    Driving the shift away from wheat have been advances in hybrid and genetically modified seeds for other crops. Major companies like Monsanto have been spending millions of dollars developing improved forms of corn, soybeans and cotton — not wheat — and those investments are paying off handsomely. Seeds engineered to resist drought and insects have yielded huge gains and have helped produce record corn harvests the last three years.
    The more-resistant seeds have made it possible for farmers in colder climates with shorter growing seasons to produce successful corn harvests. North Dakota, which for decades was the second-biggest producer of wheat after Kansas, has lost 1.69 million wheat acres since 2000, a 16 percent decline. Corn acres in the state, meanwhile, have shot up by 670,000, or 62 percent.
    In Kansas, wheat acreage is down 20 percent from 1980, though it has been fairly stable statewide the last four years. But without genetic modification, wheat is lagging behind.
    American corn yields rose by 30 percent from 1995 to 2005, while wheat yields grew by only 17 percent. In recent years corn has pulled further ahead, with an annual growth rate in yield that is four times that of wheat.
    So far, public resistance to genetically engineered wheat has been strong. Buyers in Europe and Japan said they would refuse American wheat if it was genetically modified. American farmers are divided on the issue. Monsanto dropped an effort to produce the world’s first genetically engineered wheat two years ago, yielding to the concerns of farmers that the crop would endanger exports. The wheat was genetically modified to be resistant to Monsanto’s Roundup herbicide, which would have allowed farmers to spray their fields to kill weeds while not damaging the crop.
    The company has said it is not giving up on wheat research. But the genetic engineering of corn, cotton and soybean crops is less controversial because those crops are used primarily in animal feed, clothing and food oils, while wheat is more likely to be used directly in food.
    Syngenta, a Monsanto competitor, said it was continuing to develop a genetically engineered wheat that was resistant to fusarium, a fungus that damages crops and produces dangerous toxins. The crop could be ready for the market by early next decade but the company has not decided whether to put it on a commercial path, said Anne Burt, a Syngenta spokeswoman.
    To a lesser extent, the structure of the federal farm program has also signaled to farmers that growing corn and soybeans is a better economic bet than wheat. The federal government rewards high corn production by guaranteeing growers the repayment of loans that become deficient when prices fall below the government loan rate of $1.95 a bushel. Corn prices that fell below $2 a bushel in recent years led to record payments to farmers: $4.6 billion last year and $2.9 billion in 2004. Wheat prices have generally averaged $3 a bushel, staying above the $2.75-a-bushel government floor.
    Corn’s higher yields and better subsidy support have meant that it is much more economically attractive to grow an acre of corn than wheat on average, government statistics show. But wheat subsidies have not been adjusted much to account for the larger yields farmers obtain with corn through better seed technology.
    Tighter wheat supplies could further lift wheat prices, which have hovered above $4 a bushel in recent months, but most experts do not expect food prices to rise much as a result of the switch to biofuels crops.
    The cost of wheat is less than 10 percent of the total cost of products like bread and cereal.
    The rub is in the trade-off over resources. While it takes more energy to produce a bushel of wheat than corn, an acre of corn uses a far larger overall basket of resources: energy, fertilizer and water.
    Recent high prices for wheat, driven by drought in some of the world’s prime wheat-growing regions, may prompt some American farmers to plant more wheat acres this fall. But that is not likely to reverse wheat’s decline, analysts say.
    Neither will diplomacy. For decades, America’s dominance of grains, especially wheat, was viewed as a potential diplomatic weapon, from the time President Gerald Ford tried to trade grain for discounted oil from the Soviet Union to President Jimmy Carter’s grain embargo against Moscow in 1980.
    And other countries are picking up the slack. Major competitors — including Europe, Australia, Argentina and Black Sea countries like Ukraine — have increased their wheat output. America’s traditional customers like China are also growing more wheat for their own consumption, limiting the need for imports.
    The high-protein Atkins diet that symbolized the low-carbohydrates fad helped reduce per-person flour consumption by 9 percent from 1997 to 2004, said Marcia Scheideman, president of the Wheat Foods Council in Washington.
    Over all, the incentives to grow corn and soybeans have led farmers to try to grow corn against all odds, even as the economics have gotten tougher with higher costs of fertilizer and fuel for irrigation.
    Stung by high costs to pump water, Larry Kepley, a farmer in Ulysses, west of Garden City, decided a few years ago to go back to dry-land farming, similar to what his great-grandfather did in 1888 when he first arrived in the area. The family had been irrigating since 1941.
    Dry-land farming meant sticking with wheat. Still, wanting to experiment with corn, he planted 50 acres of dry-land corn last fall, figuring he needed 60 bushels an acre to break even. He got 17 bushels an acre. “It was an utter failure,” he said.
    Mr. Lightner, the Garden City farmer, said he was more fortunate to have shallower water wells that made irrigation less costly than on Mr. Kepley’s farmland.
    But the plastic tubes that line his rows of corn, delivering water into the soil every 60 inches, are the real key, he said. The water is pumped by natural gas and costs Mr. Lightner $50 to $120 an acre.
    With higher fuel costs making his corn crop prohibitively more expensive last year, he planted 300 more acres of wheat, which he grudgingly admires as a crop with “nine lives.” But this time, the wheat failed him.
    “The drought got it and then the hail came through, so I don’t have to worry about it anymore,” Mr. Lightner said. “For now, I’ll stick with corn

  5. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

  6. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

survivalmonkey SSL seal        survivalmonkey.com warrant canary