Saturday, September 04, 2021

Wheat and Corn

If food looks expensive in the grocery store, maybe this is part of the reason: the price of wheat is up 82% in the last five years. Up 32% just in the last 12 months. 

Corn is up 46% in the last 12 months. I've read that here in Oregon the wheat crop this year has been ruined by the late June heat wave. I don't know about elsewhere. In May the Wall Street Journal wrote

"Corn has been one of the sharpest risers in the broad rally in raw materials that is prompting companies to boost prices for goods and fueling concern among investors that inflation could hobble the post-pandemic economic recovery." 

But it's paywalled. This May 31st article in a midwestern publication wrote (but also paywalled)

"The good news for farmers: Corn prices are on the rise, up nearly 70 cents in the past three weeks to their highest level in nearly three years. The bad news: That spike is largely because of heavy rain and flooding this spring that have hampered planting across the corn belt and stoked fears about a drop in production."

So it's only good news if you weren't flooded out.... Climate change's extreme weather? Of course, heavy spring rains and flooding have happened before -- it's the risk of farming. But these days you have to wonder.

Here's the chart for wheat:

Market price of wheat


Entropic man said...

I was discussing this with Layzej.

How much more can the US afford to pay for wheat, and what will continued food price rises do to your system.

Food riots, anyone?

Layzej said...

What is your prediction EM?

Entropic man said...

You've got about 30 years before states secede, allowing them to keep their own food supplies in state, rather than being forced by the federal government to export food.

David Appell said...

Idk. Food will still be sold on the free market. States don't "own" the food grown in their state -- it's owned by the farmers (usually corporate farmers now) who grow it. If states start hoarding food grown in their state we're already in big trouble....

Entropic man said...

When the 2010 Russian wheat harvest failed, Russia stopped exporting and the open market price jumped.

Egypt's government had been heavily subsidising the price of bread by getting cheap wheat from Russia. Without cheap grain, Egypt had to buy on the open market and the price of bread in Egypt jumped.

The subsequent food riots brought down the government.

In the US even the poor have guns. High food prices for the poor could easily become food riots and armed insurrection.

David Appell said...

about the price of pasta

Entropic man said...

Just as well I still have some of the pasta I hoarded before Brexit. 😋

The US has the margin to ride out a poor harvest, at least for the present.

But the second and third world countries dependant on American grain exports may be less resilient.

Entropic man said...

"Every nation is about nine meals away from a revolution."

David Appell said...

>> "Every nation is about nine meals away from a revolution."

Yes, I can kind of believe that.

I think I could go 10 days if there really was a big problem.

20 if there was extreme craziness going on outside.

Then I'd have to venture out.

God help me at that point. Totally frightening. Makes me think I should go buy a gun and ammunition tomorrow. (Really.)