Via Instapundit – World Braced for New Food Crisis.
38 Replies to “It’s Probably Nothing”
Continuing to mix 10 percent corn-ethanol fuel with increasing cost for food and gas.
Ten dollar box of Corn Flakes will look real good on the O blamer reelection ticket.
–
Kate!
You really didn’t build this SDA Web Blog,
Obama and the Democrats made it for you..
If you think things are bad in the middle east now with the Moslem Murder Cults rampages, wait until the price of their food doubles again. This is what precipitated the last round of murder and mayhem in the enlightened homelands of the Moslem Murder Cultists……
Oh boy . . Starving jihadis . . . just what the world needs.
Former governor of Iowa in charge of gouging the government for 10 percent mandatory corn supplies and wanting 15 percent.
NO CONFLICT OF INTEREST INVOLVED IN THAT.
Start by cutting off the problem countries first, then work your way down.
You don’t need to bomb these craphole countries, you just need to not feed them into compliance and submission.
While I don’t like the idea of using corn for ethanol feedstock, to be fair the general perception of this operation is a bit skewed. Firstly, the corn is not something humans would consume. It is feed corn. Secondly, the increase in demand in corn for human & animal consumption has been outstripped by technological innovations that have produced increased yields.
OK, so this is what I am being told by an executive of a company that is using corn for the production of Succinic Acid(BioAmber)so there may be a bias there.
To quote Spengler, “Asian pigs will eat before Middle Eastern peasants.” This new rise in grain prices will quite likely put Egypt in particular underwater.
It is mainly being kept afloat by Saudi money, a lot of Saudi money. Have a look at Spengler’s recent article on Egypt: http://www.atimes.com/atimes/Middle_East/NG10Ak01.html,
“The Economics of Confrontation in Egypt”.
@GAYLORD
“, the corn is not something humans would consume. It is feed corn”
Uhhh what eat’s that “feed corn”?
cattle i would assume some sort of animal that we eat right? so now the price of that animal BEEF goes through the roof …this whole entire green recyling crap has ruined the western world ..
And i will say this to all of you supposed conservatives who sat on your hands typing away bitching and complaining IT IS ALL YOUR FAULT!!
You let this happen instead of getting involve and protesting and becoming political and joining boards and having your voice of common sence and reason herd you sat there and cried while the lafties DID stuff you could have stopped them simly by being another voice .
I am 33 years old i am tring to join the city councell so i can make a difference right now they want to do like calgary and have manditory recycing and charging us for it i have sat down with the city planners and the mayor mano e mano and i peaked his intrest …wow that was hard wasn’t it .
He has givin me all kinds of back up and reinforced my ideas by showing me where to join witch board to get onto and how to make a difference . I campaigned for rob anderson during the election .
Why don’t you guy’s DO something insteado f sitting here and cring about it . Your views are correct i cannot beleive the intellegence in here that just floats around you refuse to get off your duffs and use it put it to good use challenge people this is how we win .
Until you guys in here start standing up and protesting (i dont care what for) and using your democratic rights things are only going to get worse . Rob anderson had but 7 campaigners to help him how pathetic simply pathetic and you wonder why we have alison redford as our priemier . everyone voted for rob but no one DID anything to help him. Pathetic .
I know he won i know he kicked butt . That is not the point iti s your presence that makes a huge difference be vocla about who you like and why and who you dont and why .
Sorry that is my rant for the day .
re. posted by: Gaylord at July 20, 2012 10:48 AM
Granted that the corn would not be otherwise suitable for human consumption, it still remains that it was a deliberate choice to plant the feed corn instead of human food. The fuel market subsidies distort the supply side.
It only just a beginning. Corn and Soybeans futures broke into the open air yesterday.
Gaylord…..
1. economics of biofuels
2. feed as in feeding animals
3. land that otherwise would be used for food production
I’m not in any way supporting biofuels. I am just reiterating what I was told. It’s just another aspect of this operation.
By the way, the dross left behind by the extraction of succinic acid is used as cattle feed.
Honestly I couldn’t care less if a few people starved.
If you go here…
www farminguk.com/News/Grain-and-Oilseeds-Market-Report-20th-July-2012_23928.html
and
albertafarmexpress.ca/news/igc-cuts-2012-13-wheat-crop-outlook/1001521307/
it doesn’t seem that any country is doing very well as far as wheat crops go. China and India are predicting better corn production but China is a net importer of corn and is right now negotiating to buy corn from Thailand and Laos.
Expect a lot of food inflation over the next year.
How does the crop in Saskatchewan look? I cannot find very much in the news about it.
I was off the mark with the “subsidies” statement. Seems they were removed in January. The driver now is the mandatory 37 percent of the crop being converted to ethonal (at least acconding to this link from Jan. 2012). http://www.american.com/archive/2012/january/children-of-the-corn-the-renewable-fuels-disaster
…
Renewable Fuel Standard (RFS),
..
The RFS mandates that at least 37 percent of the 2011-12 corn crop be converted to ethanol and blended with the gasoline that powers our cars. The ethanol mandate is causing corn demand to outstrip supply by more and more each year, creating a vulnerable market in which even the slightest production disturbance will have devastating consequences for the world’s poor. It is time for the federal government to stop requiring cars to burn food.
…….In the 2005-06 crop year, 1.6 billion bushels of corn were used to produce ethanol; in the 2010-11 crop year, 5.0 billion bushels were. When corn is processed into ethanol, approximately one-third of its caloric value is retained in a byproduct known as distiller’s grains, which is fed to animals. Thus, an increase of 3.4 billion bushels of corn used for ethanol production implies a loss of 2.3 billion bushels to the food system, equivalent to about 16 percent of the total U.S. supply of corn.
If these 2.3 billion bushels were returned to the food system, users would increase consumption and farmers would reduce production until prices had declined enough to absorb the excess supply. In recent research, Michael Adjemian of the U.S. Department of Agriculture and I estimate that under current market conditions corn users would consume 2 percent more corn for every 10 percent reduction in price. Nathan Hendricks of Kansas State University estimates that U.S. farmers would plant 3 percent fewer acres to corn for every 10 percent reduction in price. Summing these effects implies that the market could absorb 5 percent more corn for every 10 percent price reduction. Thus, returning 16 percent of supply to the food system would reduce corn prices by about 32 percent.
….
Low stockpiles place the corn market in a perilous position. If the 2012 crop is even slightly smaller than expected, then prices will rise even further and plunge millions more people into extreme poverty.
Unprecedented money-printing, burning food instead of oil…
I suppose it’s the chickens coming home to roost, finally.
Al_in_Ottawa re: Sask crop
Bumper, so far, long way to harvest though.
1) Sounds like a bad year for CWB proponents
2) This is exactly what the eco-terrorists wanted
Checked out the author for the article I linked in the above comment: Aaron Smith.
Looks like he should know what he is talking about.
His CV (note-pdf): http://agecon.ucdavis.edu/people/faculty/aaron-smith/cv/cv2012.pdf
Article from CV (pdf): http://agecon.ucdavis.edu/people/faculty/aaron-smith/docs//Carter_Rausser_Smith_Ethanol_Paper_submit.pdf
I didn’t read it all, yet and maybe never, but it seems to be a good source for any fact based discussion.
……….
We isolate three main results that have not been previously quantified in the literature.
First, the corn market anticipated the forthcoming ethanol boom and increased inventory
demand accordingly. As a result, prices increased in 2006 in advance of the ethanolproduction
jump in 2007 and 2008. Second, we estimate that corn price would have been,
on average, 30 percent lower from 2006 through 2010 had no increase in the demand for
corn from ethanol producers occurred. Our third finding is that a below‐average harvest in
2010 caused inventory to be run down and prices to be about 50 percent above where they
would have been if ethanol production had been frozen at 2005 levels. Since the end of our
estimation sample, the U.S. has experienced a second consecutive poor harvest: yields in
2011 were lower than in 2010. Combined with high ethanol production, the result has been
a further decline in corn inventory. This decline has placed food markets on a knife’s edge.
Recently, the U.S. Department of Agriculture (USDA) forecast that corn inventories could
dwindle to 5 percent of annual use in 2012, the smallest fraction since the Great
Depression. If the 2012 harvest is even moderately below expectations, then prices will
increase further because the RFS imposes a high lower bound on ethanol production.
…
Where’s phil with its input on how the welfare bum farmers are screwing the world by planting fuel instead of food?
— Ethanol, because its energy cost is higher than gasoline and because of its negative effect on fuel mileage, added about $14.5 billion, or 10 cents a gallon, to motorists’ fuel costs in 2011.
— Increased ethanol production since 2007 has had no effect on gasoline production or oil imports, contrary to supporters’ claims.
— Corn used for ethanol production rose 300 percent from 2005 to 2011, increasing from 1.6 billion bushels to 5 billion. (Ethanol production now uses more than 40 percent of the U.S. annual corn supply.)
— Corn now represents about 80 percent of the cost of producing ethanol compared with 40-50 percent before implementation of the mandate.
— Corn prices jumped to more than $6 a bushel in 2011 from $2 in 2005.
— The rate of change for the Consumer Price Index for meats, poultry, fish and eggs increased by 79 percent while it decreased by 41 percent for non-food items since the RFS was revised in 2007.
— Ethanol production costs and ethanol prices have all but eliminated a market for ethanol blends higher than 10 percent.
— The United States exported 1.2 billion gallons of ethanol in 2011. http://www.agriculture.com/news/policy/livestock-groups-hit-ethol-mate_4-ar25300
The food crisis brought on by the drought conditions is only beginning. Fasten your seatbelts we are in for a bumpy ride!
For years producers have been using future contracts, to manage their risk, by booking in a profit. Imagine the scenario where a producer has the huge expense of growing a crop and gets none…and now has to cover the cost of grain/corn/beans to fill those contracts.
For example soyabeans forward contracted at 350$ a metric tonne and now over 600$ a tonne on July 19th and climbing.
There will be many financially ruined.
Industrial meat, junk food and ethanol are the main consumers of feed corn, expect prices of those products to increase significantly. So what, only stupid people consume them. Perhaps this will force them to consume less.
People living in overpopulated areas where they can’t feed themselves will starve, yup…. it’s called population control, the system is reacting to the effects of the human virus.
There are more people than the planet needs, time to cull the herd.
You might remember that the Navy recently signed a fuel contract with Dynamic Fuels, a joint venture of Tyson and Syntroleum (NAS: SYNM) , which subcontracted a large amount of the production out to Solazyme (NAS: SZYM) .
The contract was worth $12 million for 450,000 gallons worth of biofuel. Basic math tells you how lousy the Navy is at basic math: Every gallon will cost it $26.67, or $1,120 per barrel’s worth. Even if costs are ever reduced to reasonable levels, which is doubtful, biofuel production demands vast swaths of arable land to produce any meaningful quantities. http://www.dailyfinance.com/2012/01/04/the-real-costs-of-alternative-energy/
And our leadership is intellingent ??
Ha! This doesn’t affect me at all.
I eat within 50 miles of home.
Wendys, McDonalds, Burger King…
Good one sabre0. Think globally eat locally.
Just a question re Ontario corn farmers. Do they not have irrigation? With the amount of water sitting in lakes and rivers in Ontario and they can’t get through a drought of rain? What am I missing?
Children of the Corn – the corn is pleased.
Rat @ 5:50
For the most part you will only see irrigation in Eastern Ontario used for vegetable/fruit production.You would also need permits to “take” water from any waterway to irrigate.
Our big problem, historically, has been dealing with draining excess water off of fields for crop production. Crop producers here invest in tile drainage not irrigation.
One final thing…for those wondering about crop insurance I have a real life story to tell.
This summer,so far, is very similiar to 1988 and 1988 was the last year we ever took out hay/pasture insurance. In 1988 we went through July with almost no rain and the days ticked by in August without a drop falling from the sky.
There was no 2nd cut…pasture for cattle burnt to a toasty crisp and people were feeding there winter hay supply to beef and dairy animals.
On the afternoon of August 31st there was a cloud burst of a thunderstorm…3-4 inches of glorious rain fell but it was game over for crops and hay and pasture in the growing season.
That 3-4 inch rain late in the afternoon of August 31st brought the 2 month total to average and not one damn penny was paid out to those that thought they were buying coverage.
And this time I’m sure Premier Dad will somehow dump the whole drought problem back on PM Harper…
Maybe the winds were calm Rat, so no electricity for the pumps.!
lance, thanks for the info. I hope the newly CWB-free wheat farmers have many good crops.
rat, in tobacco country around Simcoe and Delhi, the farmers have dug irrigation ponds years ago. Corn is a rotation crop for tobacco on many tobacco farms. Where I live now in the very east end of Ontario the farmers have no irrigation equipment, too much rain and snow-melt is usually the problem. Almost all fields have ‘Big O’ drainage tile buried in them to dry them out quickly enough to till in the spring. Right now the corn is 2-3 feet shorter than normal and the bottom leaves are turning brown. The soybean plants are looking rather thin too.
Way back in ’56 hurricane Hazel caused widespread flooding and landslides. Many people died and in the usual over-reaction after an unexpected tragedy a bureaucracy was created. Every river has a conservation authority in charge of it and all its tributaries.
You cannot draw water, alter the shoreline, cut trees or install a septic system within a certain distance of the bank or build a dock without permission in triplicate.
Not long ago Europe and the US both faced chronic overproduction of grain. Europe chose to decrease production by going green/organic. The US chose ethanol. I blame Europe for the current food price increases.
Not long ago Europe and the US both faced chronic overproduction of grain. Europe chose to decrease production by going green/organic. The US chose ethanol. I blame Europe for the current food price increases.
Al_in_Ottawa @9:52
Interesting bit of history…I didn’t know that the CA’s arose from the flood waters of hurricane Hazel.
We have a Liberal government in Bantario that has zero interest in food production in this province.
What food crisis?…the grocery stores are full!
The main concern is more regulations to protect tadpoles, turtles, bird nests, endangered weeds and all things warm and fuzzy.
….Firstly, the corn is not something humans would consume. It is feed corn…..
Posted by: Gaylord
Ummm, no. Granted, one would not sit down to a nice bowl of whole, unprocessed corn for breakfast. But it is that same corn used to make corn flakes, corn tortilla chips, corn meal, polenta, corn syrup, etc, in addition (as mentioned by others) to it being feed for chickens, beef, etc.
Corn is corn. OK, there is also popcorn, a different variety than feed corn, and varieties grown to be eaten fresh. But for the most part, corn is corn.
I started farming in the early 70’s. One bushel of wheat was worth one barrel of oil. Then came the oil crisis. Oil prices went up. In 1975 wheat prices started to climb, they rose to over $5.00 per bushel and 5,000 bushels of wheat would buy a 100 hp tractor. Today that tractor takes 20,000 bushels of wheat.
A few years ago wheat rose to $7.50 per bushel and bread prices doubled. One bushel of wheat produces enough flour to make 60 loaves of bread. The true cost of the wheat increase was less than five cents per loaf but the bread price increased over a dollar. If the actual wheat increases were passed on to the consumer without middlemen increasing their share, consumers would have very few problems.
If we priced wheat at oil prices, $80.00. If we priced at purchasing power of the 70’s $20.00 per bushel. Grains are still cheap.
Farmer Bill
But for the most part, corn is corn.
Posted by: iurockhead at July 21, 2012 12:32 PM
True enough. But there are different GRADES of corn (and all other grains grown).
Only grades 1 & 2 go for human consumption.
Lower than that is livestock feed.
A producer may start the growing season with the intention of growing food grade corn/beans/grain (because that is where the premium on price paid is) but Mother Nature being somewhat of a b*tch by times damages it with lower bushel weight, discolouration, insects, plant molds and disease and other assorted hoops to jump through to get human consumption grades.
Only corn silage acres are set aside for feeding cattle…and humans enjoy the meat, milk, butter and cheese from bovines eating it.
Continuing to mix 10 percent corn-ethanol fuel with increasing cost for food and gas.
Ten dollar box of Corn Flakes will look real good on the O blamer reelection ticket.
–
Kate!
You really didn’t build this SDA Web Blog,
Obama and the Democrats made it for you..
If you think things are bad in the middle east now with the Moslem Murder Cults rampages, wait until the price of their food doubles again. This is what precipitated the last round of murder and mayhem in the enlightened homelands of the Moslem Murder Cultists……
Oh boy . . Starving jihadis . . . just what the world needs.
Former governor of Iowa in charge of gouging the government for 10 percent mandatory corn supplies and wanting 15 percent.
NO CONFLICT OF INTEREST INVOLVED IN THAT.
Start by cutting off the problem countries first, then work your way down.
You don’t need to bomb these craphole countries, you just need to not feed them into compliance and submission.
While I don’t like the idea of using corn for ethanol feedstock, to be fair the general perception of this operation is a bit skewed. Firstly, the corn is not something humans would consume. It is feed corn. Secondly, the increase in demand in corn for human & animal consumption has been outstripped by technological innovations that have produced increased yields.
OK, so this is what I am being told by an executive of a company that is using corn for the production of Succinic Acid(BioAmber)so there may be a bias there.
To quote Spengler, “Asian pigs will eat before Middle Eastern peasants.” This new rise in grain prices will quite likely put Egypt in particular underwater.
It is mainly being kept afloat by Saudi money, a lot of Saudi money. Have a look at Spengler’s recent article on Egypt: http://www.atimes.com/atimes/Middle_East/NG10Ak01.html,
“The Economics of Confrontation in Egypt”.
@GAYLORD
“, the corn is not something humans would consume. It is feed corn”
Uhhh what eat’s that “feed corn”?
cattle i would assume some sort of animal that we eat right? so now the price of that animal BEEF goes through the roof …this whole entire green recyling crap has ruined the western world ..
And i will say this to all of you supposed conservatives who sat on your hands typing away bitching and complaining IT IS ALL YOUR FAULT!!
You let this happen instead of getting involve and protesting and becoming political and joining boards and having your voice of common sence and reason herd you sat there and cried while the lafties DID stuff you could have stopped them simly by being another voice .
I am 33 years old i am tring to join the city councell so i can make a difference right now they want to do like calgary and have manditory recycing and charging us for it i have sat down with the city planners and the mayor mano e mano and i peaked his intrest …wow that was hard wasn’t it .
He has givin me all kinds of back up and reinforced my ideas by showing me where to join witch board to get onto and how to make a difference . I campaigned for rob anderson during the election .
Why don’t you guy’s DO something insteado f sitting here and cring about it . Your views are correct i cannot beleive the intellegence in here that just floats around you refuse to get off your duffs and use it put it to good use challenge people this is how we win .
Until you guys in here start standing up and protesting (i dont care what for) and using your democratic rights things are only going to get worse . Rob anderson had but 7 campaigners to help him how pathetic simply pathetic and you wonder why we have alison redford as our priemier . everyone voted for rob but no one DID anything to help him. Pathetic .
I know he won i know he kicked butt . That is not the point iti s your presence that makes a huge difference be vocla about who you like and why and who you dont and why .
Sorry that is my rant for the day .
re. posted by: Gaylord at July 20, 2012 10:48 AM
Granted that the corn would not be otherwise suitable for human consumption, it still remains that it was a deliberate choice to plant the feed corn instead of human food. The fuel market subsidies distort the supply side.
It only just a beginning. Corn and Soybeans futures broke into the open air yesterday.
Gaylord…..
1. economics of biofuels
2. feed as in feeding animals
3. land that otherwise would be used for food production
I’m not in any way supporting biofuels. I am just reiterating what I was told. It’s just another aspect of this operation.
By the way, the dross left behind by the extraction of succinic acid is used as cattle feed.
Honestly I couldn’t care less if a few people starved.
If you go here…
www farminguk.com/News/Grain-and-Oilseeds-Market-Report-20th-July-2012_23928.html
and
albertafarmexpress.ca/news/igc-cuts-2012-13-wheat-crop-outlook/1001521307/
it doesn’t seem that any country is doing very well as far as wheat crops go. China and India are predicting better corn production but China is a net importer of corn and is right now negotiating to buy corn from Thailand and Laos.
Expect a lot of food inflation over the next year.
How does the crop in Saskatchewan look? I cannot find very much in the news about it.
I was off the mark with the “subsidies” statement. Seems they were removed in January. The driver now is the mandatory 37 percent of the crop being converted to ethonal (at least acconding to this link from Jan. 2012).
http://www.american.com/archive/2012/january/children-of-the-corn-the-renewable-fuels-disaster
…
Renewable Fuel Standard (RFS),
..
The RFS mandates that at least 37 percent of the 2011-12 corn crop be converted to ethanol and blended with the gasoline that powers our cars. The ethanol mandate is causing corn demand to outstrip supply by more and more each year, creating a vulnerable market in which even the slightest production disturbance will have devastating consequences for the world’s poor. It is time for the federal government to stop requiring cars to burn food.
…….In the 2005-06 crop year, 1.6 billion bushels of corn were used to produce ethanol; in the 2010-11 crop year, 5.0 billion bushels were. When corn is processed into ethanol, approximately one-third of its caloric value is retained in a byproduct known as distiller’s grains, which is fed to animals. Thus, an increase of 3.4 billion bushels of corn used for ethanol production implies a loss of 2.3 billion bushels to the food system, equivalent to about 16 percent of the total U.S. supply of corn.
If these 2.3 billion bushels were returned to the food system, users would increase consumption and farmers would reduce production until prices had declined enough to absorb the excess supply. In recent research, Michael Adjemian of the U.S. Department of Agriculture and I estimate that under current market conditions corn users would consume 2 percent more corn for every 10 percent reduction in price. Nathan Hendricks of Kansas State University estimates that U.S. farmers would plant 3 percent fewer acres to corn for every 10 percent reduction in price. Summing these effects implies that the market could absorb 5 percent more corn for every 10 percent price reduction. Thus, returning 16 percent of supply to the food system would reduce corn prices by about 32 percent.
….
Low stockpiles place the corn market in a perilous position. If the 2012 crop is even slightly smaller than expected, then prices will rise even further and plunge millions more people into extreme poverty.
Unprecedented money-printing, burning food instead of oil…
I suppose it’s the chickens coming home to roost, finally.
Al_in_Ottawa re: Sask crop
Bumper, so far, long way to harvest though.
1) Sounds like a bad year for CWB proponents
2) This is exactly what the eco-terrorists wanted
Checked out the author for the article I linked in the above comment: Aaron Smith.
Looks like he should know what he is talking about.
His CV (note-pdf):
http://agecon.ucdavis.edu/people/faculty/aaron-smith/cv/cv2012.pdf
Article from CV (pdf):
http://agecon.ucdavis.edu/people/faculty/aaron-smith/docs//Carter_Rausser_Smith_Ethanol_Paper_submit.pdf
I didn’t read it all, yet and maybe never, but it seems to be a good source for any fact based discussion.
……….
We isolate three main results that have not been previously quantified in the literature.
First, the corn market anticipated the forthcoming ethanol boom and increased inventory
demand accordingly. As a result, prices increased in 2006 in advance of the ethanolproduction
jump in 2007 and 2008. Second, we estimate that corn price would have been,
on average, 30 percent lower from 2006 through 2010 had no increase in the demand for
corn from ethanol producers occurred. Our third finding is that a below‐average harvest in
2010 caused inventory to be run down and prices to be about 50 percent above where they
would have been if ethanol production had been frozen at 2005 levels. Since the end of our
estimation sample, the U.S. has experienced a second consecutive poor harvest: yields in
2011 were lower than in 2010. Combined with high ethanol production, the result has been
a further decline in corn inventory. This decline has placed food markets on a knife’s edge.
Recently, the U.S. Department of Agriculture (USDA) forecast that corn inventories could
dwindle to 5 percent of annual use in 2012, the smallest fraction since the Great
Depression. If the 2012 harvest is even moderately below expectations, then prices will
increase further because the RFS imposes a high lower bound on ethanol production.
…
Where’s phil with its input on how the welfare bum farmers are screwing the world by planting fuel instead of food?
Meanwhile in Calgary.
No Shark Fin soup for you!
— Ethanol, because its energy cost is higher than gasoline and because of its negative effect on fuel mileage, added about $14.5 billion, or 10 cents a gallon, to motorists’ fuel costs in 2011.
— Increased ethanol production since 2007 has had no effect on gasoline production or oil imports, contrary to supporters’ claims.
— Corn used for ethanol production rose 300 percent from 2005 to 2011, increasing from 1.6 billion bushels to 5 billion. (Ethanol production now uses more than 40 percent of the U.S. annual corn supply.)
— Corn now represents about 80 percent of the cost of producing ethanol compared with 40-50 percent before implementation of the mandate.
— Corn prices jumped to more than $6 a bushel in 2011 from $2 in 2005.
— The rate of change for the Consumer Price Index for meats, poultry, fish and eggs increased by 79 percent while it decreased by 41 percent for non-food items since the RFS was revised in 2007.
— Ethanol production costs and ethanol prices have all but eliminated a market for ethanol blends higher than 10 percent.
— The United States exported 1.2 billion gallons of ethanol in 2011.
http://www.agriculture.com/news/policy/livestock-groups-hit-ethol-mate_4-ar25300
The food crisis brought on by the drought conditions is only beginning. Fasten your seatbelts we are in for a bumpy ride!
For years producers have been using future contracts, to manage their risk, by booking in a profit. Imagine the scenario where a producer has the huge expense of growing a crop and gets none…and now has to cover the cost of grain/corn/beans to fill those contracts.
For example soyabeans forward contracted at 350$ a metric tonne and now over 600$ a tonne on July 19th and climbing.
There will be many financially ruined.
Industrial meat, junk food and ethanol are the main consumers of feed corn, expect prices of those products to increase significantly. So what, only stupid people consume them. Perhaps this will force them to consume less.
People living in overpopulated areas where they can’t feed themselves will starve, yup…. it’s called population control, the system is reacting to the effects of the human virus.
There are more people than the planet needs, time to cull the herd.
You might remember that the Navy recently signed a fuel contract with Dynamic Fuels, a joint venture of Tyson and Syntroleum (NAS: SYNM) , which subcontracted a large amount of the production out to Solazyme (NAS: SZYM) .
The contract was worth $12 million for 450,000 gallons worth of biofuel. Basic math tells you how lousy the Navy is at basic math: Every gallon will cost it $26.67, or $1,120 per barrel’s worth. Even if costs are ever reduced to reasonable levels, which is doubtful, biofuel production demands vast swaths of arable land to produce any meaningful quantities.
http://www.dailyfinance.com/2012/01/04/the-real-costs-of-alternative-energy/
And our leadership is intellingent ??
Ha! This doesn’t affect me at all.
I eat within 50 miles of home.
Wendys, McDonalds, Burger King…
Good one sabre0. Think globally eat locally.
Just a question re Ontario corn farmers. Do they not have irrigation? With the amount of water sitting in lakes and rivers in Ontario and they can’t get through a drought of rain? What am I missing?
Children of the Corn – the corn is pleased.
Rat @ 5:50
For the most part you will only see irrigation in Eastern Ontario used for vegetable/fruit production.You would also need permits to “take” water from any waterway to irrigate.
Our big problem, historically, has been dealing with draining excess water off of fields for crop production. Crop producers here invest in tile drainage not irrigation.
One final thing…for those wondering about crop insurance I have a real life story to tell.
This summer,so far, is very similiar to 1988 and 1988 was the last year we ever took out hay/pasture insurance. In 1988 we went through July with almost no rain and the days ticked by in August without a drop falling from the sky.
There was no 2nd cut…pasture for cattle burnt to a toasty crisp and people were feeding there winter hay supply to beef and dairy animals.
On the afternoon of August 31st there was a cloud burst of a thunderstorm…3-4 inches of glorious rain fell but it was game over for crops and hay and pasture in the growing season.
That 3-4 inch rain late in the afternoon of August 31st brought the 2 month total to average and not one damn penny was paid out to those that thought they were buying coverage.
And this time I’m sure Premier Dad will somehow dump the whole drought problem back on PM Harper…
Maybe the winds were calm Rat, so no electricity for the pumps.!
lance, thanks for the info. I hope the newly CWB-free wheat farmers have many good crops.
rat, in tobacco country around Simcoe and Delhi, the farmers have dug irrigation ponds years ago. Corn is a rotation crop for tobacco on many tobacco farms. Where I live now in the very east end of Ontario the farmers have no irrigation equipment, too much rain and snow-melt is usually the problem. Almost all fields have ‘Big O’ drainage tile buried in them to dry them out quickly enough to till in the spring. Right now the corn is 2-3 feet shorter than normal and the bottom leaves are turning brown. The soybean plants are looking rather thin too.
Way back in ’56 hurricane Hazel caused widespread flooding and landslides. Many people died and in the usual over-reaction after an unexpected tragedy a bureaucracy was created. Every river has a conservation authority in charge of it and all its tributaries.
You cannot draw water, alter the shoreline, cut trees or install a septic system within a certain distance of the bank or build a dock without permission in triplicate.
Not long ago Europe and the US both faced chronic overproduction of grain. Europe chose to decrease production by going green/organic. The US chose ethanol. I blame Europe for the current food price increases.
Not long ago Europe and the US both faced chronic overproduction of grain. Europe chose to decrease production by going green/organic. The US chose ethanol. I blame Europe for the current food price increases.
Al_in_Ottawa @9:52
Interesting bit of history…I didn’t know that the CA’s arose from the flood waters of hurricane Hazel.
We have a Liberal government in Bantario that has zero interest in food production in this province.
What food crisis?…the grocery stores are full!
The main concern is more regulations to protect tadpoles, turtles, bird nests, endangered weeds and all things warm and fuzzy.
….Firstly, the corn is not something humans would consume. It is feed corn…..
Posted by: Gaylord
Ummm, no. Granted, one would not sit down to a nice bowl of whole, unprocessed corn for breakfast. But it is that same corn used to make corn flakes, corn tortilla chips, corn meal, polenta, corn syrup, etc, in addition (as mentioned by others) to it being feed for chickens, beef, etc.
Corn is corn. OK, there is also popcorn, a different variety than feed corn, and varieties grown to be eaten fresh. But for the most part, corn is corn.
I started farming in the early 70’s. One bushel of wheat was worth one barrel of oil. Then came the oil crisis. Oil prices went up. In 1975 wheat prices started to climb, they rose to over $5.00 per bushel and 5,000 bushels of wheat would buy a 100 hp tractor. Today that tractor takes 20,000 bushels of wheat.
A few years ago wheat rose to $7.50 per bushel and bread prices doubled. One bushel of wheat produces enough flour to make 60 loaves of bread. The true cost of the wheat increase was less than five cents per loaf but the bread price increased over a dollar. If the actual wheat increases were passed on to the consumer without middlemen increasing their share, consumers would have very few problems.
If we priced wheat at oil prices, $80.00. If we priced at purchasing power of the 70’s $20.00 per bushel. Grains are still cheap.
Farmer Bill
But for the most part, corn is corn.
Posted by: iurockhead at July 21, 2012 12:32 PM
True enough. But there are different GRADES of corn (and all other grains grown).
Only grades 1 & 2 go for human consumption.
Lower than that is livestock feed.
A producer may start the growing season with the intention of growing food grade corn/beans/grain (because that is where the premium on price paid is) but Mother Nature being somewhat of a b*tch by times damages it with lower bushel weight, discolouration, insects, plant molds and disease and other assorted hoops to jump through to get human consumption grades.
Only corn silage acres are set aside for feeding cattle…and humans enjoy the meat, milk, butter and cheese from bovines eating it.