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Thread: Drought Takes Toll on Food and Fuel Supplies

  1. #11
    GuncoHolic Black Blade's Avatar
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    World braced for new food crisis

    The world is facing a new food crisis as the worst US drought in more than 50 years pushes agricultural commodity prices to record highs.

    Corn and soyabean prices surged to record highs on Thursday, surpassing the peaks of the 2007-08 crisis that sparked food riots in more than 30 countries.

    Wheat prices are not yet at record levels but have rallied more than 50 per cent in five weeks, exceeding prices reached in the wake of Russia’s 2010 export ban.

    The drought in the US, which supplies nearly half the world’s exports of corn and much of its soyabeans and wheat, will reverberate well beyond its borders, affecting consumers from Egypt to China.

    “I’ve been in the business more than 30 years and this is by far and away the most serious weather issue and supply and demand problem that I have seen by a mile,” said a senior executive at a trading house. “It’s not even comparable to 2007-08.”

    David Nelson, global strategist at Rabobank, added: “Today the [US crop] disaster is real, whereas to some degree the big run-up in prices in 2008 was speculatively driven.”

    José Graziano da Silva, director general of the UN’s Food and Agriculture Organisation, told the Financial Times: “I am certainly concerned about the recent rises in food commodity prices, given their potential implications especially for the vulnerable and the poor, who spend as much as 75 per cent of their income on food.”

    In 2007-08, a spike in prices triggered food riots from Bangladesh to Haiti as the number of hungry people in the world surpassed 1bn. However, economists point out that supplies of rice and to a lesser extent wheat – key staples for many of the world’s poorest people – remain abundant, subduing prices.

    Joseph Glauber, chief economist at the US Department of Agriculture, also argued that the current situation was “far better” than 2008. “Prices are higher, and there’s no question about that, but we really had an extreme shortage of wheat in 2007-2008 and I don’t see that at this point.”

    Justin Forsyth, chief executive of Save the Children, said the rise in prices was still likely to have an exaggerated effect on the world’s poorest people. “Large numbers of people live very close to the edge,” he said. “Failed rains and high food prices have tipped lots of people over the edge from being able to cope to not being able to cope.”

    The USDA slashed its corn production forecasts last week by the most in a quarter of a century, and conditions continue to deteriorate in the worst US drought since 1956.

    Meteorologists have warned that at least half of the US corn and soyabean belt will remain dry over the next fortnight, and traders have cut their estimates for the US corn crop by a further 8-15 per cent. “I get on my knees every day and I’m saying an extra prayer right now,” Tom Vilsack, US agriculture secretary, said on Wednesday.”

    Prices for corn on Thursday hit a record $8.16¾ a bushel, and traders believe prices could rise above $9 by early August unless the weather in the US dramatically improves.

    Mr Graziano da Silva said that the FAO would convene an intergovernmental summit before the end of the year to address the issue of food security if the crop situation deteriorated further.

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    Black Blade: No problem for us of course as we prep for such things. It's the old Aesop fable (The Ant and the Grasshopper). We preppers/survivalists (Ants) only need to fend off the parasites who refused to prepare (Grasshoppers). Maybe now the chickens have come home to roost.

    Investment wise I am doing well with RJA, DBA, MOO, RNF, TNH, etc. and I suspect I will follow up with CALM and COW as the herd culling gets well underway driving meat prices lower.
    When you're born you get a ticket to the freak show. When you're born in America , you get a front row seat. - George Carlin


  2. #12
    Gunco Member buckmeister's Avatar
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    In places that have had reprieve, the grasshoppers have become a problem. I have family east of Dallas; their entire garden was eaten to the ground by the 3" pests.

    buckmeister

  3. #13
    GuncoHolic Black Blade's Avatar
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    Default The Price Of Corn Hits A Record High As A Global Food Crisis Looms

    The Price Of Corn Hits A Record High As A Global Food Crisis Looms



    Are you ready for the next major global food crisis? The price of corn hit an all-time record high on Thursday. So did the price of soybeans. The price of corn is up about 50 percent since the middle of last month, and the price of wheat has risen by about 50 percent over the past five weeks. On Thursday, corn for September delivery reached $8.166 per bushel, and many analysts believe that it could hit $10 a bushel before this crisis is over. The worst drought in the United States in more than 50 years is projected to continue well into August, and more than 1,300 counties in the United States have been declared to be official natural disaster areas. So how is this crisis going to affect the average person on the street? Well, most Americans and most Europeans are going to notice their grocery bills go up significantly over the coming months. That will not be pleasant. But in other areas of the world this crisis could mean the difference between life and death for some people. You see, half of all global corn exports come from the United States. So what happens if the U.S. does not have any corn to export? About a billion people around the world live on the edge of starvation, and today the Financial Times ran a front page story with the following headline: "World braced for new food crisis". Millions upon millions of families in poor countries are barely able to feed themselves right now. So what happens if the price of the food that they buy goes up dramatically?

    You may not think that you eat much corn, but the truth is that it is in most of the things that we buy at the grocery store. In fact, corn is found in about 74 percent of the products we buy in the supermarket and it is used in more than 3,500 ways.

    Americans consume approximately one-third of all the corn grown in the world each year, and we export massive amounts of corn to the rest of the world. Unfortunately, thanks to the drought of 2012 farmers are watching their corn die right in front of their eyes all over the United States.

    The following is from a Washington Post article that was posted on Thursday....

    Nearly 40 percent of the corn crop was in poor-to-very-poor condition as of Sunday, according to the U.S. Agriculture Department. That compared with just 11 percent a year ago.

    “The crop, if you look going south from Illinois and Indiana, is damaged and a lot of it is damaged hopelessly and beyond repair now,” said Sterling Smith, a Citibank Institutional Client Group vice president who specializes in commodities.

    About 30 percent of the soybean crop was in poor-to-very-poor condition, which compared with 10 percent a year ago.

    Conditions for both crops are expected to worsen in Monday’s agriculture agency report.
    More than half of the country is experiencing drought conditions right now, and this is devastating both ranchers and farmers. Right now, ranchers all over the western United States are slaughtering their herds early as feed prices rise. It is being projected that the price of meat will rise substantially later this year.

    The following is from a recent MSNBC article....

    For example, you may want to make room in your freezer for meat because prices for beef and pork are expected to drop in the next few months as farmers slaughter herds to deal with the high cost of grains that are used as livestock feed, said Shawn Hackett of the agricultural commodities firm Hackett Financial Advisors in Boynton Beach, Fla. But, he added, everything from milk to salad dressing is going to cost more in the near term, and eventually the meat deals will evaporate as demand outstrips supply.
    So there may be some deals on meat in the short-term as all of these animals are slaughtered, but in the long-term we can expect prices to go up quite a bit.

    But it isn't as if food is not already expensive enough. The price of food rose much faster than the overall rate of inflation last year.

    As I wrote about yesterday, American families found their grocery budgets stretched very thin during 2011. Just check out these food inflation rates from last year....

    Beef: +10.2%
    Pork: +8.5%
    Fish: +7.1%
    Eggs: +9.2%
    Dairy: +6.8%
    Oils and Fats: +9.3%

    If prices rose that fast last year, what will those statistics look like at the end of this year if this drought continues?

    Sadly, America is not alone. According to Bloomberg, the U.S. is not the only place that is having problems with crops right now....

    Dry weather in the U.S., as well as the Black Sea region; a poor start to the Indian monsoon and the possibility of emerging El Nino conditions suggest agricultural products may rally, Barclays said in a report e-mailed yesterday.
    And all of this is very bad news for a world that is really struggling to feed itself.

    In many countries around the globe, the poor spend up to 75 percent of their incomes on food. Just a 10 percent increase in the price of basic food staples can be absolutely devastating for impoverished families that are living right on the edge.

    You may not have ever known what it is like to wonder where your next meal is going to come from, but in many areas around the world that is a daily reality for many families.

    Just check out what is happening in Yemen....

    Crying and staring at his distended belly, 6-year-old Warood cannot walk on his spindly legs.

    "We become so familiar with sickness," said his mother, who according to social norms here does not give her name to outsiders.

    She says she has watched two of her children die. "I have to decide: Do I buy rice or medicine?"

    The United Nations estimates that 267,000 Yemeni children are facing life-threatening levels of malnutrition. In the Middle East's poorest country hunger has doubled since 2009. More than 10 million people — 44% of the population — do not have enough food to eat, according to the United Nation's World Food Program.
    In the United States, we aren't going to see starvation even if nearly the entire corn crop fails. Our grocery bills might be more painful, but there is still going to be plenty of food for everyone.

    In other areas of the world, a bad year for global crops can mean the difference between life and death.

    Sadly, it is being projected that the current drought in the United States will last well into August at least.

    But even when this current drought ends, our problems will not be over. The truth is that we are facing a very severe long-term water crisis in the western United States.

    Just check out the following facts from foodandwaterwatch.org....

    -California has a 20-year supply of freshwater left

    -New Mexico has only a ten-year supply of freshwater left

    -The U.S. interior west is probably the driest it has been in 500 years, according to the National Academy of Sciences and the U.S. Geological Survey

    -Lake Mead, the vast reservoir of the Colorado River, has a 50 percent chance of running dry by 2021

    The 1,450 mile long Colorado River is probably the most important body of water in the southwestern United States.

    Unfortunately, the Colorado River is rapidly dying.

    The following is from a recent article by Jonathan Waterman about how the once might Colorado River is running dry...

    Fifty miles from the sea, 1.5 miles south of the Mexican border, I saw a river evaporate into a scum of phosphates and discarded water bottles. This dirty water sent me home with feet so badly infected that I couldn’t walk for a week. And a delta once renowned for its wildlife and wetlands is now all but part of the surrounding and parched Sonoran Desert. According to Mexican scientists whom I met with, the river has not flowed to the sea since 1998. If the Endangered Species Act had any teeth in Mexico, we might have a chance to save the giant sea bass (totoaba), clams, the Sea of Cortez shrimp fishery that depends upon freshwater returns, and dozens of bird species.
    So let this stand as an open invitation to the former Secretary of the Interior and all water buffalos who insist upon telling us that there is no scarcity of water here or in the Mexican Delta. Leave the sprinklered green lawns outside the Aspen conferences, come with me, and I’ll show you a Colorado River running dry from its headwaters to the sea. It is polluted and compromised by industry and agriculture. It is overallocated, drought stricken, and soon to suffer greatly from population growth. If other leaders in our administration continue the whitewash, the scarcity of knowledge and lack of conservation measures will cripple a western civilization built upon water. “You can either do it in crisis mode,” Pat Mulroy said at this conference, “or you can start educating now.”

    People need to wake up because we have some very serious water issues in this country.

    In the heartland of America, farmers pump water from a massive underground lake known as the Ogallala Aquifer to irrigate their fields.

    The problem is that the Ogallala Aquifer is rapidly being pumped dry.

    According to the U.S. Geological Survey, "a volume equivalent to two-thirds of the water in Lake Erie" has been permanently drained from the Ogallala Aquifer since 1940.

    Once upon a time, the Ogallala Aquifer had an average depth of about 240 feet.

    Today, the average depth of the Ogallala Aquifer is just 80 feet, and in some parts of Texas the water is totally gone.

    Right now, the Ogallala Aquifer is being drained at a rate of approximately 800 gallons per minute.

    Once that water is gone it will not be replaced.

    So what will the "breadbasket of America" do then?

    Most Americans do not realize this, but we are facing some major, major water problems.

    Let us pray that this current drought ends and let us pray that everyone around the world will have enough to eat.

    But even if we get through this year okay by some miracle, that doesn't mean that our problems are over.



    The Price Of Corn Hits A Record High As A Global Food Crisis Looms


    Black Blade: Americans (at least this generation) never experienced famine. They may soon find out how seriously under prepared we are for such an event. We have been lucky to be the breadbasket of the world. Our modern farming techniques and vast expanse of farmland has served us well. Those of us who prepare are ahead of the curve but what happens when crops fail here and abroad? When people are hungry and parents have starving children, they will do anything no matter how irrational to feed them. Like-minded people had better organize and prepare for this eventuality. It will come down to their families starving and dying as opposed to your family starving and dying. Should they who refused to prepare and who ridiculed us have any right to take from us? Of course not. They didn't prepare and should be left to themselves (or fought off if necessary). When famine strikes we will become primal and it comes down to "survival of the fittest" as "natural selection" becomes the law of survival).
    When you're born you get a ticket to the freak show. When you're born in America , you get a front row seat. - George Carlin


  4. #14
    GuncoHolic Black Blade's Avatar
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    Heatwave of 2012 Damages Crops and Egg Farms

    Snippit:

    The drought is commanding record prices as losses mount. The photo to the left shows a damaged corn crop near Paris, Missouri taken July 13, 2012.

    According to Kreher’s Farm Fresh Eggs, during the Midwest heat wave prior to the July 4th holiday, roughly 3.2 million laying hens were killed. Additional heat in this area is continuing to hurt productivity and egg size. In the last two weeks, the egg inventory has dropped 6.9% and is likely to impact the industry for the next 6 to 9 months.

    What all of this means is higher prices and scarcity of these items in the coming months. Look for prices to increase at your local market. Buyers are scrambling to try and come up with alternatives.

    Now would be a good time to stock up on flour.

    Continued: Cooking: Heatwave of 2012 Damages Crops and Egg Farms - Utica, NY - The Observer-Dispatch, Utica, New York


    Black Blade: Poultry and egg prices look to increase.
    When you're born you get a ticket to the freak show. When you're born in America , you get a front row seat. - George Carlin


  5. #15
    Gunco Rookie carvenedrick's Avatar
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    The details which are provided about drought takes toll on food and fuel supplies will be think of us. Heat and dryness will continue to lower yield potential for corn and soybeans across western areas.

  6. #16
    Gunco Addicted for life j427x's Avatar
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    a few years ago farming even for small farms like mine could be very profitable.

    we have plenty of ground water --however it is now too expensive to pump to irrigate large areas. before energy prices shot up you could irrigate enough of the land during a dry spell to get by. you can't do this any more and make any profit.

    livestock is also very iffy --expensive feed and hay --even transport has got out of hand.

    a lot of the smaller farms are either shut down or nearly shut down.

    i don't farm anymore --i just garden and raise a few cows for the deep freezer.

    and to all those people who think they can live off the land--

    back when DeSoto trekked this land the land was full of game and the waters full of fish, there was fruit trees and vines everywhere.

    the native population was estimated to be 5,000 to 8,000.


    today this area has over 3,000,000 people.

    foraging is going to get real lean real quick.


    no fricking way 3,000,000 can live off the land.

  7. #17
    Administrator sniper69's Avatar
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    That's why one should stock up on what items they can.
    "To show you how radical I am, I want carjackers dead. I want rapists dead. I want burglars dead. I want child molesters dead. I want the bad guys dead. No court case. No parole. No early release. I want 'em dead. Get a gun and when they attack you, shoot 'em."
    Ted Nugent - speaking at the NRA convention April 17, 2005

  8. #18
    GuncoHolic Black Blade's Avatar
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    California’s New ‘Dust Bowl’: “It’s Gonna Be a Slow, Painful, Agonizing Death” For Farmers



    zerohedge.com / by Tyler Durden on 02/15/2014 20:26

    “It’s really a crisis situation,” exclaims one California city manager, “and it’s going to get worse in time if this drought doesn’t alleviate.”

    For the state that produces one-third of the nation’s fruits and vegetables, the driest spell in 500 years has prompted President Obama to make $100 million in livestock-disaster aid available within 60 days to help the state rebound from what he describes is ” going to be a very challenging situation this year… and potentially some time to come.”

    READ MORE
    When you're born you get a ticket to the freak show. When you're born in America , you get a front row seat. - George Carlin


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