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  • Agricultural Apocalypse 2010

    Agricultural Apocalypse 2010



    The food business is far and away the most important
    business in the world. Everything else is a luxury.
    Food is what you need to sustain life every day.
    Dwayne Andreas

    When a large segment of the population is facing a drastic cut in income in the face of escalating food prices we have a catastrophic problem in the making. Today we have the simultaneous events of income deflation and food inflation; two high-speed express trains coming down that tracks at each other, a financial crisis colliding with staggering crop losses, which are cutting deeply into available planetary food reserves. Prices of food are again beginning to soar again just as millions are losing the ability to afford a reasonable diet, though little of this is being observed or reported. But soon even the blind will see.

    From corn to crude, prices for a wide range of commodities are
    on the rise across the globe.
    In recent months, global food prices
    have been growing at a rate that rivals some of the wildest months of 2008, when food riots erupted across the developing world.
    January 9th Wall Street Journal

    The cold is again freezing oranges in Florida. Temperatures in Miami dropped to 36F; beating the record 37F set in 1938. Officials are saying that hundreds of millions of dollars of food perished. Vegetables were among the hardest hit. At least one major tomato grower, Ag-Mart Produce, has already declared that most of its Florida crop is “useless due to the freeze.” Other vegetable farms were expected to lose their entire crop, and wholesale prices have already increased. “Tomatoes were down around $14 for a 25-pound box; now they are up over $20,” said Gene McAvoy, an agriculture expert with the University Florida, who predicted $100 million in vegetable losses. “Peppers — just after New Year’s they were $8 a box; now they’re up around $18.”

    White sugar climbed to the highest price in at least two decades
    in London on speculation that India, Pakistan and other importers
    will purchase more of the sweetener as a supply deficit looms.
    Excess rains in Brazil and a weak monsoon in India hurt
    sugar-cane output from the world’s two biggest growers.
    January 20, 2010


    The world faces “mass starvation” following North America’s next major crop failure. And it could even happen before year’s end. So says Chicago-based Don Coxe, who is one of the world’s leading experts on agricultural commodities, so much so that Canada’s renowned BMO Financial Group named the fund after him. A crop failure in North America will have particularly dire consequences for major overseas markets that are highly reliant on U.S. crop imports.

    Scientists in England are warning that a “perfect storm” of food shortages and water scarcity now threatens to unleash public unrest and conflict, the government’s chief scientist, Professor John Beddington, has warned.[i] “People do not quite realise the scale of the issue,” said Professor Mike Bevan. “This is one of the most serious problems that science has ever faced.” In Britain the lives of hundreds of thousands of people will be threatened by food shortages. The repercussions of food shortages for any society are devastating. The world faces “mass starvation” following more major crop failures in the United States and other places around the globe. According to Chicago-based Don Coxe, who is one of the world’s leading experts on agricultural commodities, so much so that Canada’s renowned BMO Financial Group named the fund after him, this mind boggling event could happen before year’s end.

    We are facing a problem that literally has never been faced in human history. Surging population and food demand, food inflation, diminishing world food stocks, drought, flooding, cold, diminished credit, infestations, soil erosion, industrial farming, factory farm pollution, aquifers/wells going dry, relocation of produce for energy production are all slamming into a global financial and economic crisis. And in some places like the United States they don’t have enough farmers. Then on top of everything else we have desertification, which is one of the world’s most pressing environmental issues. New deserts are growing at a rate of 20,000 square miles (51,800 square kilometers) a year. Desertification leads to famine, mass starvation and human migration.

    According to Eric de Carbonnel, “There is overwhelming, undeniable evidence that the world will run out of food next year. The 2010 Food Crisis is going to be different. It is the crisis that will make all doomsday scenarios come true. Early in 2009, the supply and demand in agricultural markets went badly out of balance. The world experienced a catastrophic fall in food production as a result of the financial crisis (low commodity prices and lack of credit) and adverse weather on a global scale. Normally food prices should have already shot higher months ago, leading to lower food consumption and bringing the global food supply/demand situation back into balance. This never happened because the United States Department of Agriculture (USDA), instead of adjusting production estimates down to reflect decreased production, adjusted estimates upwards to match increasing demand from china. In this way, the USDA has brought supply and demand back into balance (on paper) and temporarily delayed a rise in food prices by ensuring a catastrophe in 2010.”[ii]

    According to the United States Department of Agriculture U.S. farmers produced the largest corn and soybean crops on record in 2009. And there are people who believe that anyone who believes government figures on anything concerning the economy or anything else is a total moron.

    Very few people in the US have given any serious consideration to the question of food security. This essay should convince people that its time to start. For the most part, we’re not aware of the problem but if we look hard at the ‘hidden’ news we see that the handwriting is on the wall for an unimaginable crisis that will come on us as early as this year.

    More than 2.1 million hectares of grain have been destroyed
    by drought in 2009 in Russia, Agriculture Minister Yelena
    Skrynnik said. A total of 616,000 hectares have been
    destroyed in the region, or 70% of the total amount planted.[iii]


    “The world is blissfully unaware that the greatest economic, financial and political crisis ever is a few months away. It takes only the tiniest bit of research to realize something is going critically wrong in the agricultural market. All someone needs to do to know the world is headed for food crisis is to stop reading USDA’s crop reports predicting a record soybean and corn harvests and listen to what else the USDA is saying.
    Specifically, the USDA has declared half the counties in the Midwest to be primary disaster areas, including 274 counties in the last 30 days alone. These designations are based on the criteria of a minimum of 30 percent loss in the value of at least one crop in the county,” continues de Carbonnel.


    [i] http://www.guardian.co.uk/science/20...-food-shortage [ii] http://www.marketskeptics.com/2009/1...r-dummies.html
    [iii] http://www.kyivpost.com/news/world/detail/44653/

  • #2
    Re: Agricultural Apocalypse 2010

    There's no way to delay
    That trouble comin' every day.

    - Frank Zappa
    Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. -Groucho

    Comment


    • #3
      Re: Agricultural Apocalypse 2010

      You can't be a real country unless you have a beer and an airline. It helps if you have some kind of a football team, or some nuclear weapons, but at the very least you need a beer.

      Frank Zappa

      You need agriculture to have beer.

      Comment


      • #4
        Re: Agricultural Apocalypse 2010

        dba appears to be clueless:


        Comment


        • #5
          Re: Agricultural Apocalypse 2010

          dba appears to be clueless:
          I think that could be because there is no cause for concern. Every year some section of the country encounters trouble and gets declared a disaster area. Payments follow and life goes on. Any excuse to pay some corporate welfare to the Agribusiness giants is a good excuse so it happens every year. Congressional war chests are thus replenished by the grateful recipients.

          Last fall I decided based on a previous breathless report, much of which is regurgitated here, to look into the facts of the matter. I decided that if the disaster were as bad as reported, many states should have their newspapers filled with gory details of failed crops and suffering farmers. Papers in rural areas don't have a lot of news, so crop failures or abundance are definitely covered. Guess what? Nothing out of the ordinary in newspapers.

          These stories sound a lot like GATA stories of sinister manipulation based on tiny tidbits of presumed discrepant data, often with baselines that are questionable in themselves. Whenever an article bases most of its premise on early non-normalized indicators and appeals to subsequent willful data distortion my BS detector goes into overdrive.

          Comment


          • #6
            Re: Agricultural Apocalypse 2010

            This disaster is coming, just not yet. The world will complain about the price of soda rising because of the fructose corn shortage, and will barely notice all the starving people in the world.

            Let's not be too rough on our own ignorance, it's what makes America great.
            Frank Zappa

            CORN



            SOYBEANS



            DBA

            Commodity Contract Expiry Date Index Weight Base Weight
            Cattle(FeederCattle) 5/27/2010 2.02% 4.17%
            Cattle(FeederCattle) 8/26/2010 3.03%
            Cocoa 5/13/2010 4.09% 11.11%
            Cocoa 7/15/2010 6.13%
            Coffee "C" 5/18/2010 4.41% 11.11%
            Coffee "C" 7/20/2010 6.62%
            Corn 12/14/2010 11.65% 12.50%
            Cotton #2 5/6/2010 1.29% 2.78%
            Cotton #2 7/8/2010 1.94%
            Lean Hogs 6/14/2010 9.83% 8.33%
            Live Cattle 6/30/2010 14.00% 12.50%
            Soybeans 11/12/2010 12.60% 12.50%
            Sugar #11 6/30/2010 10.86% 12.50%
            Wheat 7/14/2010 5.67% 6.25%
            Wheat (Kansas Wheat) 7/14/2010 5.86% 6.25%

            Comment


            • #7
              Re: Agricultural Apocalypse 2010

              Originally posted by we_are_toast View Post
              This disaster is coming, just not yet. The world will complain about the price of soda rising because of the fructose corn shortage, and will barely notice all the starving people in the world.




              CORN



              SOYBEANS



              ...
              This year might be time to be a contrarian and buy cattle and hogs...on the premise that feed prices are going down.

              From the USDA website:

              WASHINGTON, Mar. 31, 2010U.S. farmers plan to plant a record-high 78.1 million acres to soybeans in 2010, according to the Prospective Plantings report released today by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS).

              NASS expects that total area planted to principal crops nationwide will hold steady at 319.5 million acres, after declining 5.7 million acres in 2009. Intended soybean acres are expected to increase 1 percent from last year’s previous record, while corn planted area is expected to increase 3 percent, to 88.8 million acres. If realized, this would be the second-largest area planted to corn since 1947, behind 2007...

              Comment


              • #8
                Re: Agricultural Apocalypse 2010

                Originally posted by GRG55 View Post
                This year might be time to be a contrarian and buy cattle and hogs...on the premise that feed prices are going down.

                From the USDA website:

                WASHINGTON, Mar. 31, 2010U.S. farmers plan to plant a record-high 78.1 million acres to soybeans in 2010, according to the Prospective Plantings report released today by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS).

                NASS expects that total area planted to principal crops nationwide will hold steady at 319.5 million acres, after declining 5.7 million acres in 2009. Intended soybean acres are expected to increase 1 percent from last year’s previous record, while corn planted area is expected to increase 3 percent, to 88.8 million acres. If realized, this would be the second-largest area planted to corn since 1947, behind 2007...

                It looks like the train has left the station for cattle.



                But I will be adding to my DBA.

                Comment


                • #9
                  Re: Agricultural Apocalypse 2010

                  Originally posted by we_are_toast View Post
                  It looks like the train has left the station for cattle.



                  But I will be adding to my DBA.
                  More from the USDA:
                  ...NASS also released the quarterly Grain Stocks report today, showing corn stocks in all positions at 7.69 billion bushels as of March 1. This is the second-highest March 1 stocks level on record, after 1987...

                  Comment


                  • #10
                    Re: Agricultural Apocalypse 2010

                    The question I have for you is -- since arable land is fixed , or declining in availability, and the acerage planted to soy and corn has increased, what has decreased? Or if land that would normally have lain fallow, (BTW, there is no such thing as fallow land -- only land where a polyculture occurs for a period of time, and regenerates the productivity) - How will that impact future productivity of the system?

                    From worldclocks

                    Productive Land

                    The world's productive land is a constantly changing resource. Climatic variations, natural disasters, and human intervention are ceaselessly at work changing the boundaries of productive land -- arable land, pasture land, and forest. Arable land covers 3% of the world's surface. Despite the fact that this land is continually being lost to urbanization, the total area under cultivation is rising because of deforestation. Demand for agricultural land continues to increase in line with population growth, resulting in the clearing of marginal land, such as hillsides. The exploitation of marginal land is partly responsible for the erosion of the fertile soil layer, increased drought, the loss of essential soil nutrients, and salt contamination -- all reasons for abandoning the land. Land used for pasture occupies twice the area of land now under the plow. Although livestock raising produces less protein per hectare than grain, especially in developing countries, it enables farmers to take advantage of marginal land that is less suitable for growing grain. The loss of productive land can be attributed largely to the destruction of forests. The cultivation of land once forested, however, has not stopped the steady decrease in arable land or pasture land. Finally, the land that produces our food, provides us with firewood and construction lumber, purifies the atmosphere, maintains precipitation levels, and slows down erosion is continually decreasing. It is estimated that one hectare of productive land is lost every 7.67 seconds.

                    Comment


                    • #11
                      Re: Agricultural Apocalypse 2010

                      Originally posted by we_are_toast View Post



                      CORN



                      SOYBEANS


                      These two charts appear to reveal a nice long/short hedge opportunity (at least retrospectively )

                      Comment


                      • #12
                        Re: Agricultural Apocalypse 2010

                        Agricultural productivity is the answer.

                        Between 1999-2008, farm productivity in the USA increased by 1.74 percent per year.

                        http://www.ers.usda.gov/Data/AgProductivity/

                        Comment


                        • #13
                          Re: Agricultural Apocalypse 2010

                          Originally posted by Rajiv View Post
                          The question I have for you is -- since arable land is fixed , or declining in availability, and the acerage planted to soy and corn has increased, what has decreased? Or if land that would normally have lain fallow, (BTW, there is no such thing as fallow land -- only land where a polyculture occurs for a period of time, and regenerates the productivity) - How will that impact future productivity of the system?

                          From worldclocks
                          Unfortunately, what is decreasing, at an ever accelerating rate of decline, is the natural world where the rest of our planet's organisms and biological systems live. We should all recognize that the threat to biodiversity is real and important to human quality of life and ultimately, survival of our species. I know you recognize this principal, Rajiv, but I fear that the vast majority of the frogs in our pot of slowly heating water are completely anthropocentric and intent on boiling all of us alive.....
                          Last edited by reallife; 04-09-10, 12:03 PM. Reason: spelling

                          Comment


                          • #14
                            Re: Agricultural Apocalypse 2010

                            Originally posted by we_are_toast
                            This disaster is coming, just not yet. The world will complain about the price of soda rising because of the fructose corn shortage, and will barely notice all the starving people in the world.
                            This is an easily testable hypothesis: will diet soda prices diverge from sugary soda prices?

                            :eek:

                            Comment


                            • #15
                              Re: Agricultural Apocalypse 2010

                              Originally posted by bobola View Post
                              Agricultural productivity is the answer.

                              Between 1999-2008, farm productivity in the USA increased by 1.74 percent per year.

                              http://www.ers.usda.gov/Data/AgProductivity/
                              I'm sure that using 3.7% of arable land in the US for corn ethanol production has no effect on food prices. :rolleyes: ;)

                              Comment

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