Russia to halt grain exports

[nitroglycol]

Interesting:

Benchmark wheat futures rushed to a 23-month high on Thursday after Russia’s Prime Minister Vladimir Putin announced a temporary ban on the export of grain and related farm products from the drought-wracked country.

With Russia at the mercy of its worst droughts in more than a century, Mr. Putin also pledged 10 billion rubles ($335-million U.S.) in subsidies and another 25 billion rubles in loans to the agricultural sector, adding that grain from the government intervention fund will be distributed to regions.

A spokesman for Mr. Putin said the ban would come into force on August 15, fanning benchmark wheat prices in the United States which have risen almost 70 per cent since late June.

Source. How are crops in North America looking? Any farmer who manages to successfully harvest a good crop has got it made, but I know that in some places the weather has not been kind to farmers.

[we_are_toast]

Re: Russia to halt grain exports

I heard a report a couple days ago that said, Australia and Argentina are also hurting from drought, while the Canadian crop is getting too much water. U.S. farmers stand to do pretty well this year. This is also dragging up the price of other grains. Of course when these prices work their way to the end products, along with the increase in oil prices, it's going to give a bump to the CPI. CPI will come in high, but core CPI will be low. Then the price will crash when everyone and their brother says they're going to plant winter and spring wheat.

Deflationists will need to take a break for awhile.

[sunskyfan]

Re: Russia to halt grain exports

Our great play is that we can feed the world. I'll take a wheat-dollar over a petro-dollar any day. But we are too stupid to understand our destiny and build crappy suburban houses on grade 1 farm land all over the Midwest to this day.

[gwynedd1]

Re: Russia to halt grain exports

And here in the Midwest we are soaked. Its close to a 100 year wet summer.

Though I wish I could be more optimistic about US farming. Its not just the suburban homes but the mono-cultures, subsidies and water distribution. California is slowly losing arable land because of the salt build up. We have a society of MBAs and accountants when we should have smaller farmers that can efficiently manage small tracts of land. In other words it is the future and its where all the capital needs to go and especially human capital. We ought to be looking to put the native grass back on the high plains and go back to buffalo rather than keep sucking the rivers dry for cattle fodder or keep draining the ogallala aquifer.

[sunskyfan]

Re: Russia to halt grain exports

Good points and no doubt it is a resource to be managed, but what would you rather base your security on? Oil? Cell Phone Apps? Finance? Weapons? Gambling?

[gwynedd1]

Re: Russia to halt grain exports

Good points and no doubt it is a resource to be managed, but what would you rather base your security on? Oil? Cell Phone Apps? Finance? Weapons? Gambling?

Again I agree. I thinks it obvious to many that the new frontier is organic. We are organic. The idea is to stay away from the short term commoditization of what sustains us, aka food. Have you heard of the concept of a "wheated out" field? We are using fossil fuels for nitrogen to get around this in the corn crop. We have already dust bowled ourselves twice. All we need is for something to go seriously wrong with some mono-crop, something we never dreamed of.

I took it seriously enough where I now eat something wild everyday. It taught me a lot about how to exist with known food reserves with only my own labor to get them. It also can be quite delicious. Its also the fauna of a junk yard dog. Those suburban homes you mention do more damage than perhaps you know. Not only do we prevent farming, but we destroy native edibles and often plant useless invasives not bred for human sustenance like they were before. Though I have seen some improvements as I have begun to see park districts adding nanny berries service berries for "birds". We have been eradicating our own food reserves with lawns and pretty toxic plants while letting factoring faming megaliths eliminate biodiversity. We will see another "potato famine", its just a matter of time if we keep going in this direction.

The way forward is with smaller scale diverse crops and even native crops bred to exist where it grows instead of relying on exotic plants infused with nitrate fertilizers and protected by herbicides and pesticides. Though if we just got away from "lawns" we would be half way there. Though now most people are addicted to supermarket food where half of everything in it is derived from corn or soy.

[Rajiv]

Re: Russia to halt grain exports

There was in interesting take on this on the impact on China - If They Can’t Afford Wheat Let Them Buy Real Estate? Why the Price of Food Will Guarantee a Chinese Real Estate Crash

I am presuming that this may have a some impact on India as well.

[dummass]

Re: Russia to halt grain exports

DBA was down for the day. I checked their allocation: they are only holding 5% wheat and not until July 2011. Just my luck.

[nitroglycol]

Re: Russia to halt grain exports

And here in the Midwest we are soaked. Its close to a 100 year wet summer.

Much of the Canadian Prairies too, as noted by we_are_toast above. Parts of the Interlake area of Manitoba haven't had successful crops for several years running due to wet conditions.

And just consider what will happen if Ug99 really takes hold. The effects on global food supplies could be drastic, especially in an era where just-in-time shipping is the norm. Fortunately, there's apparently been some good news on that front lately...

[doom&gloom]

Re: Russia to halt grain exports

I heard a report a couple days ago that said, Australia and Argentina are also hurting from drought, while the Canadian crop is getting too much water. U.S. farmers stand to do pretty well this year. This is also dragging up the price of other grains. Of course when these prices work their way to the end products, along with the increase in oil prices, it's going to give a bump to the CPI. CPI will come in high, but core CPI will be low. Then the price will crash when everyone and their brother says they're going to plant winter and spring wheat.

Deflationists will need to take a break for awhile.

I have noted my Uruguaying farm purchase here in te past. My current wheat crop is doing quite well. I hope it stays that way!