View Full Version : Historic drought to bring higher food prices, experts say
Stargazer
07-17-2012, 13:49
http://www.foxnews.com/us/2012/07/17/historic-drought-conditions-can-lead-to-higher-food-prices-experts-say/
Everything from breakfast cereal to roast beef will cost more as a result of the worst drought in 24 years, which has already prompted authorities to declare more than 1,000 counties in 26 states -- nearly two-thirds of land in the lower 48 states, stretching from Nevada to South Carolina -- natural disaster areas.
Only in the 1930s and the 1950s has a drought covered more land, according to federal figures released Monday. So far, officials say there's little risk of a Dust Bowl-type catastrophe, but crop losses could mount if rain doesn't come soon -- and that means across-the-board higher food prices.
The U.S. Department of Agriculture has lowered its crop projections for corn by 12 percent, prompting a 34 percent hike in prices in recent weeks. Since corn goes into so many food products for both humans and livestock, its effect on overall food prices is massive.
"If you like bacon [and] pork, you should buy it now, because by the fall you are going to be stunned at what it will cost," he wrote in an email.
In Illinois, the drought has already taken a heavy toll, with more than 80 percent of corn, soybean and other crops considered to be in fair condition or worse. Less than 10 percent of farm fields have adequate topsoil moisture. Farmer Kenny Brummer has lost 800 acres of corn that he grows to feed his 400 head of cattle and 30,000 hogs. Now he's scrambling to find hundreds of thousands of bushels of replacement feed....
The midwest state I reside in has 93 counties that are experiencing drought like conditions. I have over an hour compute to work that is near a major university that has an agriculture school... and the crops around here are starting to suffer.
Stargazer
07-18-2012, 12:00
http://www.msnbc.msn.com/id/48219314
Reuters) - Broiling heat blanketed much of the Midwest again on Tuesday, exacerbating the region's worst drought in more than 50 years and devastating corn, soy and other vital crops.....
...In Missouri, Governor Jay Nixon announced on Tuesday that all 114 counties in the state have been designated as natural disaster areas due to the drought, making farmers eligible for government loans or other assistance...
...In Iowa, Governor Terry Branstad convened a hearing to discuss the drought and its effect on the state's pork industry, which relies heavily on corn feed...
...About 55 percent of the contiguous United States is in a drought, just as corn plants should be pollinating, a period when adequate moisture is crucial. The United States ships more than half of all world exports of corn, which is made into dozens of products, from starch and ethanol to livestock feed....
..."We're moving from a crisis to a horror story," said Purdue University agronomist Tony Vyn. "I see an increasing number of fields that will produce zero grain."
Punishing indeed! Another blow to the economy that doesn't bode well...
Nostradamus' 169th quatrain warned about this: "There will be drought and exorbitant prices in the land until the Wealthy One defeats the Evil One scarcely a week after All Hallow's Eve in the Year of the London Games."
Stargazer
07-18-2012, 12:27
Nostradamus' 169th quatrain warned about this: "There will be drought and exorbitant prices in the land until the Wealthy One defeats the Evil One scarcely a week after All Hallow's Eve in the Year of the London Games."
Exactly my point in posting it......... just thought this approach was a little less controversial... :D
Exactly my point in posting it......... just thought this approach was a little less controversial... :D
I hear that. ;)
Ethanol producers are already feeling the pinch, some ethanol plants are getting ready to cease production as soon as current corn inventories are depleted. The truth of the matter is that corn is a heckuva lot more valuable as a food stock vs. being treated as an alternative fuel source. Corn is up more than 41% since May thats good news for the seller that is if there will be anything to sell. Farming is one of the biggest crapshoots in the whole world, overall we have had a lot more good years than bad. It's the magnitude of this drought though, it's not unusual to have pockets of drought or bad weather but to be so widespread.
22735
It's terrible here, and the heat is unrelenting. I think we had a total of 20 minutes of rain in the past month.
Prayers out to all Midwestern members and guests.
We need those higher prices the way you need the heat without rain.
Prayers out to all Midwestern members and guests.
We need those higher prices the way you need the heat without rain.
Agree.
It's supposed to rain tomorrow morning (Chicago area) and only 85 degrees...before it goes back up into the high 90's - 100's. I'm ready to move to Alaska.
There's going to be some interesting stuff happening with food moving forward.
We've seen huge price volatility in agriculture in recent years that has all kinds of contributing factors......excessively cheap credit, the effects of Peak Cheap Oil, government policy(ethanol), weather volatility, etc.
I think the current average cost for food in the US is circa 11% of income.
In many places around the world(including the many hundreds of millions of Chinese that are still dirt poor) current average food cost is in excess of 50% of income.
If food prices go up 50% relative to income(taking into account wage inflation) in the US and the wealthy west and people complain.
If food prices go up 50% relative to income in the poorest parts of the world and people go hungry, starve, riot, mutate into failed states, and governments fall.
IIRC Madagascar's government got dropped a few years back....and one of the bigger contributing factors was the economic crisis, rising food prices, and foreign attempts to mass purchase/lease Malagasy agricultural land...so a mix of direct and indirect food/agriculture issues(as well as others) contributed to the fall.
I think if we see food prices whipsaw higher again we will see food capable of being used quite effectively as a geopolitical weapon in a way maybe not too different from energy being used as a geopolitical weapon.
Back in the 80's the US supposedly(genuine/speculation I'm not sure) pushed the Saudis to pump hard, temporarily glutting the energy markets, crashing the price of energy, helping the US economy, while seriously hurting the Soviets main export earner at a time when they were in economic trouble....helping to crash the Soviet Union.
I wonder if there would be any realistic/possible scenarios where big picture policy(such as ethanol maybe?) could quietly and maybe even intentionally shape things to lead to food price spikes......where the wealthy west will complain, but could lead to insurrection in China and elsewhere?
Just my 0.02c......the %'s listed above are as I recall them from the last time I looked into it.
...
In many places around the world(including the many hundreds of millions of Chinese that are still dirt poor) current average food cost is in excess of 50% of income.
If food prices go up 50% relative to income(taking into account wage inflation) in the US and the wealthy west and people complain.
If food prices go up 50% relative to income in the poorest parts of the world and people go hungry, starve, riot, mutate into failed states, and governments fall.
...
Good thing we are not "the rest of the world," though I have no doubt the current POTUS would love to level the playing field, and his actions and policies are such that instead of raising the standards higher in those other countries, he would rather see fit to lower ours to the level of those dirt poor Chinese you mention.
As for the drought:
We could weather a drought and correlating spike in food prices if everything else was in check; it wouldn't be so bad if it were not so bad.
But eventually the drought will come to an end. If we have learned anything from fluctuating oil prices, that is that food and commodities in general will not revert back to lower prices when that drought is over.
TOMAHAWK9521
07-18-2012, 22:41
Another issue with the drought is the lack of feed for livestock owners out here in Rocky Mtn states. An old outfitter friend is getting very nervous at the lack of available hay to be found out in these parts. The grass on his property is completely fried from the hot dry summer we're having so he can't put his animals out to graze. If it gets much worse he may be forced to do the humane thing and put down all his horses and mules.
I spoke with other horse owners/breeders on the front range and they too have been searching for grass/hay as far north as Canada with no idea if they'll ever get the feed for their horses in time. The prices for hay are staggeringly high as it is and those who have a extra hay are understandably not letting it go for the time being.
As for the drought:
We could weather a drought and correlating spike in food prices if everything else was in check; it wouldn't be so bad if it were not so bad.
I like that, look for "O" to adopt that as his next slogan. Rumor has it that the govt. may open up the CRP acres to grazing and maybe even baling. The drought will pass but not without a lot of pain.
Dozer523
07-19-2012, 11:55
I like that, look for "O" to adopt that as his next slogan. Rumor has it . . . I KNEW IT!
It's Obama's fault!
GratefulCitizen
07-19-2012, 18:07
There's going to be some interesting stuff happening with food moving forward.
We've seen huge price volatility in agriculture in recent years that has all kinds of contributing factors......excessively cheap credit, the effects of Peak Cheap Oil, government policy(ethanol), weather volatility, etc.
I think the current average cost for food in the US is circa 11% of income.
In many places around the world(including the many hundreds of millions of Chinese that are still dirt poor) current average food cost is in excess of 50% of income.
If food prices go up 50% relative to income(taking into account wage inflation) in the US and the wealthy west and people complain.
If food prices go up 50% relative to income in the poorest parts of the world and people go hungry, starve, riot, mutate into failed states, and governments fall.
IIRC Madagascar's government got dropped a few years back....and one of the bigger contributing factors was the economic crisis, rising food prices, and foreign attempts to mass purchase/lease Malagasy agricultural land...so a mix of direct and indirect food/agriculture issues(as well as others) contributed to the fall.
I think if we see food prices whipsaw higher again we will see food capable of being used quite effectively as a geopolitical weapon in a way maybe not too different from energy being used as a geopolitical weapon.
Back in the 80's the US supposedly(genuine/speculation I'm not sure) pushed the Saudis to pump hard, temporarily glutting the energy markets, crashing the price of energy, helping the US economy, while seriously hurting the Soviets main export earner at a time when they were in economic trouble....helping to crash the Soviet Union.
I wonder if there would be any realistic/possible scenarios where big picture policy(such as ethanol maybe?) could quietly and maybe even intentionally shape things to lead to food price spikes......where the wealthy west will complain, but could lead to insurrection in China and elsewhere?
Just my 0.02c......the %'s listed above are as I recall them from the last time I looked into it.
Plenty of money sitting on the sidelines doing nothing.
Investing in business is unwise given the uncertainty.
Combine this with rising food prices and ridiculously cheap credit...
You've got prime conditions to inflate a bubble.
Good thing we are not "the rest of the world," though I have no doubt the current POTUS would love to level the playing field, and his actions and policies are such that instead of raising the standards higher in those other countries, he would rather see fit to lower ours to the level of those dirt poor Chinese you mention.
As for the drought:
We could weather a drought and correlating spike in food prices if everything else was in check; it wouldn't be so bad if it were not so bad.
But eventually the drought will come to an end. If we have learned anything from fluctuating oil prices, that is that food and commodities in general will not revert back to lower prices when that drought is over.
Yeah I think the monetary and fiscal silliness of recent years that has contributed to the rise in energy/gold prices has also contributed to the rise in food prices.
This is one of those things that's hard to come by in open source.....which is mixing the fields of finance/economics with agriculture and defense/security analysis.
Surely if you put together a couple folks with a really good understanding of finance/economics, with a couple folks who have a strong strategic understanding of agriculture and water use around the world, and throw in a couple folks with hands on experience(like on this forum) in all the flavors of failed/failing/challenged nations(along with a good selection of beer and whiskey) surely they'd be able to draw a pretty accurate picture of the next likely Bangladesh, Biafra, Ethiopia, Somalia, North Korea when it comes to food/famine/instability.
Another issue with the drought is the lack of feed for livestock owners out here in Rocky Mtn states. An old outfitter friend is getting very nervous at the lack of available hay to be found out in these parts. The grass on his property is completely fried from the hot dry summer we're having so he can't put his animals out to graze. If it gets much worse he may be forced to do the humane thing and put down all his horses and mules.
I spoke with other horse owners/breeders on the front range and they too have been searching for grass/hay as far north as Canada with no idea if they'll ever get the feed for their horses in time. The prices for hay are staggeringly high as it is and those who have a extra hay are understandably not letting it go for the time being.
VERY sorry to hear that.
One of the things I've been reading up on is that historically when it comes to food/feed it's almost always just a local/regional crisis.......not really a global shortage......just unfortunate examples like the one your friend is facing.....I'm sure there's an excess for him somewhere........it's just too bloody far away making it uneconomic for him or logistically/politically impossible for others.
Plenty of money sitting on the sidelines doing nothing.
Investing in business is unwise given the uncertainty.
Combine this with rising food prices and ridiculously cheap credit...
You've got prime conditions to inflate a bubble.
AGREED on the plenty of money on the sidelines.
We actually got out of a farm partnership last year when prices peaked for us down here.
And we are keen to re-enter the industry...someday...when the game of Monopoly is rebooted, leveled, and is no longer unnecessarily fiddled with.
So we sit on the sidelines as well watching and waiting like a buzzard.
Dozer523
07-20-2012, 02:04
. . . it wouldn't be so bad if it were not so bad. That's for sure.
Yeah I think the monetary and fiscal silliness of recent years that has contributed to the rise in energy/gold prices has also contributed to the rise in food prices.
This is one of those things that's hard to come by in open source.....which is mixing the fields of finance/economics with agriculture and defense/security analysis.
Surely if you put together a couple folks with a really good understanding of finance/economics, with a couple folks who have a strong strategic understanding of agriculture and water use around the world, and throw in a couple folks with hands on experience(like on this forum) in all the flavors of failed/failing/challenged nations(along with a good selection of beer and whiskey) surely they'd be able to draw a pretty accurate picture of the next likely Bangladesh, Biafra, Ethiopia, Somalia, North Korea when it comes to food/famine/instability.
Really what we need to do is put together a team that already understands the direction this country is headed, and what is needed to turn it around, and luckily for us there are plenty of them out there.
We haven't the time nor endurance to dick around with social experiments in drawing out what we will look like in making comparisons to other countries that are already down the shitter.
Really what we need to do is put together a team that already understands the direction this country is headed, and what is needed to turn it around, and luckily for us there are plenty of them out there.
We haven't the time nor endurance to dick around with social experiments in drawing out what we will look like in making comparisons to other countries that are already down the shitter.
I agree with your point in regard to the US politically and the fact there are a LOT of folks out there who could effect real positive change.
Where I think I'd disagree is on campaign finance polluting it and preventing many/most of the good folks from getting into the positions they need to be.
To be a bit clearer on my point of an SME "mashup" being able to predict the next crisis......maybe I could use East Africa as an example.
If you put a few guys from ODAs with a wealth of experience in East Africa , an Ag/farming specialist who know the region, someone who knows how the Nile river system works, someone who knows forestry and the Mau forest, a regionally focused economist, a regional specific meteorologist, a demographer, and a career diplomat or spook with regional time in service, my guess is they'd be able to figure out plus or minus 12 months when a war will cook off, or a famine, or a revolution, or ??
I guess the point I was trying to make is that while a lot of those individual SMEs can be found if you look hard enough on the net or in person.....getting them all together in the same room seems limited largely to national intelligence services as far as I can tell.
Lots of folks looking at change in Egypt possibly resulting in a future showdown with Israel....but we are not hearing anything about the real risk of future conflict over Nile River resources as nations collide.....maybe the next inevitable East African drought/famine could cascade into a regional war over water.
Sorry for going off topic or around in circles.....but the thread topic of drought and higher food prices has me thinking about what the 2nd, 3rd, 4th order effects might very realistically be.
Where I think I'd disagree is on campaign finance polluting it and preventing many/most of the good folks from getting into the positions they need to be.
To be a bit clearer on my point of an SME "mashup" being able to predict the next crisis......maybe I could use East Africa as an example.
If you put a few guys from ODAs with a wealth of experience in East Africa , an Ag/farming specialist who know the region, someone who knows how the Nile river system works, someone who knows forestry and the Mau forest, a regionally focused economist, a regional specific meteorologist, a demographer, and a career diplomat or spook with regional time in service, my guess is they'd be able to figure out plus or minus 12 months when a war will cook off, or a famine, or a revolution, or ??
That is already done, and very closely monitored globaly. In fact there isn't much guessing involved, IMO. You don't have to guess when a war will break out, or famine or anything. The lines in the sand are drawn. Merely understanding those lines, when and where to cross them and you have one or all of those. The countries that are unstable and ready to cook off are more at risk, and a huge difference in comparison from the USA, again IMO.
I guess the point I was trying to make is that while a lot of those individual SMEs can be found if you look hard enough on the net or in person.....getting them all together in the same room seems limited largely to national intelligence services as far as I can tell.
I think it is more multi-level, intelligence services being one portion.
Lots of folks looking at change in Egypt possibly resulting in a future showdown with Israel....but we are not hearing anything about the real risk of future conflict over Nile River resources as nations collide.....maybe the next inevitable East African drought/famine could cascade into a regional war over water.
I think there are a lot more pressing issues in that region, far beyond Egypt and the Nile river.
Sorry for going off topic or around in circles.....but the thread topic of drought and higher food prices has me thinking about what the 2nd, 3rd, 4th order effects might very realistically be.
It is simple, should the drought go on long enough, food prices will continue to climb...the last figures I heard were in the order of 3-4%, and slightly higher in restaurants. This expected in the next 5 or so months. Beyond that food and water will be brought into regions that cannot sustain their own, much like the current system in use today, which brings food and water into stores. The biggest hit will be to agriculture to include farming and livestock, and those in that business. That will comeback. Not the first droughts this country has faced. http://en.wikipedia.org/wiki/Dust_Bowl
A very different solution to that which second and third world countries would utilize. I don't think we would be close to any kind of "Mad Max" apocolypse, which seems to me something that you might be trying to work into the equation. Anyways, just my own thoughts and observations.
Agree.
I'm ready to move to Alaska.
Gypsy,
Hear ya loud and clear! Funny, escaping my town of residence in AZ where it got up to 125 last summer, to my temporary stop in T-Town...where it has been the hottest place in the US for the last three days...:eek:
Can only imagine the strength and mental fortitude Our brave soldiers must posses to work in even hotter temps in the ME.:o
Am trying to buy local, freshly grown produce when possible, to try and help out the little guys in these parts who are struggling.
Holly
That is already done, and very closely monitored globaly. In fact there isn't much guessing involved, IMO. You don't have to guess when a war will break out, or famine or anything. The lines in the sand are drawn. Merely understanding those lines, when and where to cross them and you have one or all of those. The countries that are unstable and ready to cook off are more at risk, and a huge difference in comparison from the USA, again IMO.
I guess I'm thinking about 2nd, 3rd, 4th order effects of what happens THERE, impacting on what happens HERE(US, NZ, wealthy west, etc)
I think it is more multi-level, intelligence services being one portion.
I take that point on board........it's just a shame it's so hard to find multifaceted analysis in the public domain...maybe there's simply not be enough money in it for marketing such analysis to the general public.
I think there are a lot more pressing issues in that region, far beyond Egypt and the Nile river.
I don't disagree, I was just using it as an example of how we could see conflict coming from a less than commonly expected direction, or with possibly little known or covered root causes.
It is simple, should the drought go on long enough, food prices will continue to climb...the last figures I heard were in the order of 3-4%, and slightly higher in restaurants. This expected in the next 5 or so months. Beyond that food and water will be brought into regions that cannot sustain their own, much like the current system in use today, which brings food and water into stores. The biggest hit will be to agriculture to include farming and livestock, and those in that business. That will comeback. Not the first droughts this country has faced. http://en.wikipedia.org/wiki/Dust_Bowl
I couldn't agree more....I would think any truly substantial crisis that involves a modern country like the US/NZ/Aus/Canada/etc would likely see some considerable problems, but an effective response is pretty close to being guaranteed(eventually). I believe those key points of difference between wealthy western nations and the developing world when it comes to crisis could be the difference between success and failure. I've seen that up close and personal with our two major local earthquakes in the last two years...especially when compared with Haiti's
A very different solution to that which second and third world countries would utilize. I don't think we would be close to any kind of "Mad Max" apocolypse, which seems to me something that you might be trying to work into the equation. Anyways, just my own thoughts and observations.
Was there something I wrote that led you to believe I'm thinking Mad Max/apocalypse type crisis is in the future for the wealthy western nations?
I don't believe I did. If I did, I apologize.
I'm not a believer in an apocalypse for the wealthy west....discomfort....possibly quite severe discomfort for some.....but Cormac McCarthy's The Road is the farthest thing from my mind.
The developing world and the countries where the % of wages spent on food is the highest.....I reckon it could quite quite nasty.
My thoughts are the same as I posted earlier.......if food prices inflate(net of wage inflation) 50% in our world(where we spend on average about 12% of wages)....people complain......if food prices inflate 50% in their world(where they spend on average over 50% of wages)...people die...and get all stabby.
I agree that drought related food price inflation probably isn't going to be huge, but what about when you include the fiscal/monetary crisis related food price inflation and Peak Cheap Oil related food price inflation(where energy price rises due to fiscal/monetary reasons as well as tighter supply demand)?
Isn't it possible, maybe even likely, we could see a good couple of years with 10-20+% food price inflation(as we already have seen in a number of places over the past decade)?
Events in places like Bangladesh, Biafra, Ethiopia, North Korea, and Madagascar when it comes to famine haven't really effected the wealthy west in a noticeable way before.
Isn't it possible, maybe increasingly likely, that while the West may feel only some limited direct discomfort from rising food prices, there could be an indirect but substantial impact on the wealthy west?
I'm thinking instead of 1 Biafra or 1 Ethiopia, maybe we might see a couple larger developing world famines or intolerably high food price inflation.
Didn't food prices and the downstream effect on land prices and foreign sales play a significant factor in the unrest and coup in Madagascar?
What if those things happen to countries the US views as strategic regional partners?
I hope I'm being clear?
Destrier
07-31-2012, 00:31
Our local dairy farmers are looking at thinning their herds early. They know they cannot feed them here in Western, NY through the entire winter. I went to the Amish- / Mennonite farmers and found hay but I bought early ($2.50 per bale), none left from the local community now and my neighbors are very concerned. The main source through first cuttings has been giving his buyers 20-30 bales at a time. Not looking good. I am already reducing my hay trying to make what I have last, but I am almost out of grazing land. 412 bales left. Be interested to see what this falls auction prices will be on hay.
Our local dairy farmers are looking at thinning their herds early. They know they cannot feed them here in Western, NY through the entire winter. I went to the Amish- / Mennonite farmers and found hay but I bought early ($2.50 per bale), none left from the local community now and my neighbors are very concerned. The main source through first cuttings has been giving his buyers 20-30 bales at a time. Not looking good. I am already reducing my hay trying to make what I have last, but I am almost out of grazing land. 412 bales left. Be interested to see what this falls auction prices will be on hay.
QP Destrier, where are you in upstate? Have you tried to do a search on craigslist.com? I did a search around Buffalo also Elmira and Rochester, and there are a few folks selling hay. I am not sure of the quality, or the type you need, but it is a start. Might be some in the more rural areas as well.
If you go to craigslist.com and select New York, then the closest cities and perhaps work your way out? you will want to look under "For Sale" and then select "Farm and Garden." In the top search field enter "hay" or "hay for sale" and you will get some results.
http://elmira.craigslist.org/search/gra?query=hay&srchType=A&minAsk=&maxAsk=
http://buffalo.craigslist.org/search/gra?query=hay&srchType=A&minAsk=&maxAsk=
http://rochester.craigslist.org/search/gra?query=hay&srchType=A&minAsk=&maxAsk=
ETA: When I was growing up, we used to buy fresh milk from one of the dairy farms in Elmira, I think it was Elmira, so long ago. The owners had a hay loft we would jump from, and a stream that we caught fresh trout out of. I can't remember the name, although my older sister knows it.
Entire post...
No apologies needed. It just seems to me that in comparing what might happen in the US, to what has already happened in other countries (third world) is a stretch, and those same events, even if they were identical are not going to hurt the US in the long run. There are a huge difference in resources and coping mechanisims involved and at our disposal vs. those found in other countries. Those other countries will suffer more and more under your premise because basically everyone will slide down a notch or two, or five on the totem pole (the scale will slide downward, and relatively everyone will slide down in relation to everyone else, but those at the top will still be at the top, the weathy west as you call it).
The apocolypse scenario I refer to would be indicative of the needed events to play out here in the US for there to be an equal comparison, again IMO. A comparison that you are making, at least that is how I read your posts.
I think there is a fundamental difference in how we view this, that's all. But If I could offer a comparison:
Suppose I had $300. And, all things being equal, I gave $100 to a 60 year old, $100 to a 20 year old, and $100 to a 10 year old. All things being equal, the results would be the same. But there is no way all things are equal in this situation.
Anyways, if it were to get really bad, then here is what would happen here in the US, at least for about the first 5 or so years:
Folks would stop paying their cable tv bill.
To save electricity all cloths would be hung out to dry.
Folks would stop eating out.
Folks would stop paying internet bill.
They would stop paying auto insurance and take their chances on the road.
They would put off major purchases.
They would eat more rice and beans.
They would start eating the squirrels and ducks/racoons etc., that live around them.
They would get rid of their cell phones, and maybe have a cheap land line.
Folks would use less toilet paper.
Those that buy them would not buy lotto tickets.
Cigarettes and Alchohol would become ultra luxurey items.
That would free up around $200-300+ per month, and that would be "roughing it" here in the US.
We already import much food from the rest of the world...oranges from Brazil and Mexico, fish from Vietnam, Rice from Thailand...that would probably increase in volume. Additionally, strong allies tend to stay that way, and come to eachothers aide. If it were really, really, really bad, I would expect to see other countries comming to the aide of the USA, and equally an increased number of citizens leaving the USA to "survive" in some of those other countries.
Destrier
07-31-2012, 01:23
If you look on craigslist you will already see hay at $4 to 5+ per bale and rising. That's high at this time of year. We are just seeing second cuttings and first cuttings are already at raised prices. We usually pay 2 maybe 3 per bale, heck we saw 5 dollars at this springs auction and thought that was high.. I am good for now, my neighbors are the ones that are looking weak. The Amish to my North right next to lake Ontario actually got rain, are managing a weak third cuttings. Only reason I got any, is they got some rain from the storms that went out across Lake Ontario.
If you look on craigslist you will already see hay at $4 to 5+ per bale and rising. That's high at this time of year. We are just seeing second cuttings and first cuttings are already at raised prices. We usually pay 2 maybe 3 per bale, heck we saw 5 dollars at this springs auction and thought that was high.. I am good for now, my neighbors are the ones that are looking weak. The Amish to my North right next to lake Ontario actually got rain, are managing a weak third cuttings. Only reason I got any, is they got some rain from the storms that went out across Lake Ontario.
I saw those prices. In comparison to the Dallas/Fort Worth area the prices here are $4-$8 (mostly the upper range), alfalfa around $13 for square bales. Many don't list the cutting now, but about two or three weeks ago there were a lot of second cuttings listed.
Stargazer
07-31-2012, 07:24
I caught the end of a discussion on Fox Business where they were talking about the price of corn being up 60% already and expected to climb even higher. They also mentioned how the high cost and supply is negatively impacting farmers / ranchers with livestock. Producers are suggesting reducing ethanol requirement which would lower the cost of corn, but the folks in oil say it will drive up gas prices....
Destrier
07-31-2012, 07:52
That is the problem with large scale farms, they and our food system is tied to oil. My neighbor uses horse teams and tractor. He has a small farm 100 acres, but rents another 100 or so for hay. Since he is not entirely tied to fuel he can actually survive as an independent organic farmer.
The okra did fine, this year, but my corn got so dry, the crows brought canteens. :D
Stargazer
07-31-2012, 08:06
That is the problem with large scale farms, they and our food system is tied to oil. My neighbor uses horse teams and tractor. He has a small farm 100 acres, but rents another 100 or so for hay. Since he is not entirely tied to fuel he can actually survive as an independent organic farmer.
Agreed! I think it is neat that your neighbor uses horse teams!!! I buy organic whenever possible. I also see more and more community vegetable gardens which I think is fantastic.
I always put in a hay order early and get a lower price because of it.
your post
Good points.
I completely agree that things would have to get pretty bad, like zombie bad, for the average American to no longer be able to feed his/her family...particularly due to the fact that while many think there isn't much "fat on the bone" as you articulated, there's a lot of bills that get force ranked behind the food bill.
Different story in the 3rd world obviously.
One thing I'm unsure of is how much food can become a geopolitical tool, weapon, or currency... much like how energy has been used as a tool, weapon, and increasingly is becoming an international currency in some respects.
All stuff way over my head......
About all I know for sure is that if food prices doubled quickly for my neighbors folks would complain, adjust, and simply drive on as you said........but if food prices doubled quickly in some of the places I've been, I certainly wouldn't want to be there if it happened.
Much of it leaves me stumped....and I was in the farm business until recently as a passive partner....we got out because we could no longer figure it out....in the sense that it was like playing a game of monopoly, but with the rules of the game seeming to change with every lap around the board. Commodity price volatility was just too erratic for us(dairy farming).
Crazy times.
That is the problem with large scale farms, they and our food system is tied to oil. My neighbor uses horse teams and tractor. He has a small farm 100 acres, but rents another 100 or so for hay. Since he is not entirely tied to fuel he can actually survive as an independent organic farmer.
Until last year we ran a 400ha pasture based dairy farm. From day 1 we put a lot of emphasis on reducing our total energy inputs......this was prior to the energy spike back in 2008.
We found it quite worthwhile because our peer group using a higher fraction of energy inputs got financially burned in the lag after energy prices rose but before lagging dairy prices caught up in echo.
I really think in farming lowest cost producer now must include strong consideration for lowest energy input. That was my experience as a passive partner in a single dairy farm in our local market.
We never had to deal with drought....and probably never will(water measured in acre feet and seemingly endless aquifers if needed.....the problem we had was too much rain not enough sunshine to allow the grass to grow...that was a scary season having baleage hauled 300km away...those were some bloody big invoices.
I really like the idea of getting back into sustainable dairy farming again.......but not until all this fiscal/monetary crazy is over I think....until then it's just the outback veggie garden, berry bushes, and fruit trees for me.
Good points.
I completely agree that things would have to get pretty bad, like zombie bad, for the average American to no longer be able to feed his/her family...particularly due to the fact that while many think there isn't much "fat on the bone" as you articulated, there's a lot of bills that get force ranked behind the food bill.
Different story in the 3rd world obviously.
One thing I'm unsure of is how much food can become a geopolitical tool, weapon, or currency... much like how energy has been used as a tool, weapon, and increasingly is becoming an international currency in some respects.
All stuff way over my head......
About all I know for sure is that if food prices doubled quickly for my neighbors folks would complain, adjust, and simply drive on as you said........but if food prices doubled quickly in some of the places I've been, I certainly wouldn't want to be there if it happened.
Much of it leaves me stumped....and I was in the farm business until recently as a passive partner....we got out because we could no longer figure it out....in the sense that it was like playing a game of monopoly, but with the rules of the game seeming to change with every lap around the board. Commodity price volatility was just too erratic for us(dairy farming).
Crazy times.
In some ways that is done already with sanctions. And it looks like, based on corn, it might be in the pipeline here in the US, although probably not intentional. Probably more just a consequence of the drought. But it is strange. They put ethanol in gas, the price goes up. They take it out the price goes up.
Stargazer
08-02-2012, 17:34
The Mississippi River was closed at two different locations Thursday after a barge ran aground near Greenville, Mississippi, and the Army Corps of Engineers carried out dredging operations near La Crosse, Wisconsin.
The Greenville closure affects a 10-mile stretch of the Lower Mississippi, according to Coast Guard spokesman Lt. JG McMillian.
He said the incident represents the 24th closure his office has monitored in past weeks.
Closures have become more routine this year, officials say, as last year's flooding may have worsened the situation by way of silt and other deposits of debris in areas that are normally clear.
The traffic closures occurred just as a historic drought and excessive heat reduce water levels and scorch wide sections of the U.S. Midwest.
http://www.cnn.com/2012/08/02/us/mississippi-river-traffic-halted/index.html
I do hope we get some relief soon.... things are not getting better in my neck of the woods.
But it is strange. They put ethanol in gas, the price goes up. They take it out the price goes up.
This is the part where I all too often refer to complex systems as the visual of Homer Simpson at his nuclear reactor control panel pushing buttons in a less than systematic and methodical fashion(like a test pilot or astronaut would to find root cause problems).
About I seem to have gained from it so far is, and even that I'm not exactly sure of, is that it doesn't look good. :D
GratefulCitizen
08-02-2012, 18:45
In some ways that is done already with sanctions. And it looks like, based on corn, it might be in the pipeline here in the US, although probably not intentional. Probably more just a consequence of the drought. But it is strange. They put ethanol in gas, the price goes up. They take it out the price goes up.
Under most circumstances*, a vehicle will get worse mileage with e10 than it will with gasoline (not to mention other potential problems).
The cost is more than just price per gallon.
There are still plenty of stations here in (way) northern Arizona which sell gasoline uncontaminated with ethanol.
I avoid putting ethanol in my vehicles whenever possible.
*
Ethanol is less energy-dense than gasoline and requires a greater volume of fuel to generate the same amount of heat.
However, it is more knock-resistant than gasoline which can lead to greater thermal efficiency under some circumstances.
Probably the only way you can take advantage of the increased efficiency is with a manual transmission and a little gear-stomping (borderline lugging) with lower speed driving.
ZonieDiver
08-02-2012, 19:14
This is the part where I all too often refer to complex systems as the visual of Homer Simpson at his nuclear reactor control panel pushing buttons in a less than systematic and methodical fashion(like a test pilot or astronaut would to find root cause problems).
About I seem to have gained from it so far is, and even that I'm not exactly sure of, is that it doesn't look good. :D
Huh?
This is the second time in as many days when I've gotten lost trying to follow someone's point. It must be hanging around with a two and a half year old, and trying to decipher his language that has me running at less than optimal speed. Maybe...
Would you mind clarifying for an older person? Thanks in advance.
Wouldn't be much of an issue except for the federally mandated 10% ethenol (corn) additive in gas.......dumbest freakin deal ever, but the farmers and their lobbiests love it too....
Wouldn't be much of an issue except for the federally mandated 10% ethenol (corn) additive in gas.......dumbest freakin deal ever, but the farmers and their lobbiests love it too....
The farmers love it when they have corn to sell.
The ethanol scheme is the most short-sited, ill-researched and poorest-planned boondoggle ever.
Huh?
This is the second time in as many days when I've gotten lost trying to follow someone's point. It must be hanging around with a two and a half year old, and trying to decipher his language that has me running at less than optimal speed. Maybe...
Would you mind clarifying for an older person? Thanks in advance.
Sorry mate...I'll try to be a bit more clear:
Sarski made a valid point of "they put ethanol in gas, the price goes up. They take it out the price goes up."
Which leaves many scratching their heads.....myself included.
Along with that we have drought(local/regional/global), fiscal/monetary policy(US/Int), agricultural policy(US/Int), economic policy(US/Int), foreign policy(US/Int), trade relationships/tariffs(US/Int), and probably a heap more things I missed that are(or just could be) "levers" and "buttons" that can have an impact on food prices.
It's very hard for the little guy to figure out what "level" or "button" does what to impact on food prices when so many of them are being concurrently pressed and/or pulled.
I couldn't find the live action Homer Simpson example I used, but this one sort of does the job:
http://www.youtube.com/watch?v=IqmV7ZOazZ4
The reason why my partner and I got out of farming(for the time being) was because we felt too much like Homer Simpson. We didn't like the part where we felt we had to act like a hedge fund manager trying to mitigate dairy commodity price volatility, NZD/USD currency volatility, and interest rate volatility. We just wanted to milk cows, grow the farm, and make some money. Dairy price, NZD/USD, and interest rates have all been a couple laps on a roller coaster ride the last 12 years or so.
Hopefully it makes some sense?
That's been our experience anyway.
ZonieDiver
08-02-2012, 20:03
Gotcha! Thanks.
There are still plenty of stations here in (way) northern Arizona which sell gasoline uncontaminated with ethanol.
I avoid putting ethanol in my vehicles whenever possible.
Wish that was the case around here (if so, I am unaware of any stations that offer it). Gasoline is one of my biggest expenses, and really eats into my profits. Is there much of a price difference between the two? Based on the price increase expected when the e10 is removed, I would imagine that the price is higher?
GratefulCitizen
08-03-2012, 19:46
Wish that was the case around here (if so, I am unaware of any stations that offer it). Gasoline is one of my biggest expenses, and really eats into my profits. Is there much of a price difference between the two? Based on the price increase expected when the e10 is removed, I would imagine that the price is higher?
The e10 stuff tends to be a little cheaper per gallon, but the per mile cost difference is negligible.
Roger, I would rather have the option. ;)
Is this the possible early signs of 2nd order effects of US drought on ROW?
http://www.nytimes.com/2012/08/04/world/africa/west-african-nations-trying-to-contain-rising-food-prices.html?_r=1&src=rechp
IIRC, the price spike in 2007-2008, followed by the brief commodity crash in 2009 was largely fiscal/monetary policy related.
I wonder how it will play out when you combine the still unresolved fiscal/monetary crisis(chapter 2) with drought?
One of the really interesting developments of the last decade or so is the massive agricultural land development in the developing world.
At the individual and co-op partnership level, professional farmers in the US/Canada/Australia/NZ have been buying large tracts of ag land in places like Brazil and Uraguay and making a 2nd fortune in farming.
At the large corporate and nation state levels, REALLY huge tracts of land have been purchased ...such as leveling native bush in the South West Pacific for Palm Oil(& kernal) plantations that has some characteristics of ethanol policy in the US as well as for national food security in the cases of Saudi Arabia, South Korea, and China buying up large tracts in places like Madagascar and Zimbabwe.
It will be interesting to see how this all develops and learn how it all inter-relates.
IIRC, the price spike in 2007-2008, followed by the brief commodity crash in 2009 was largely fiscal/monetary policy related.Chapter two of the report available here (http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&ved=0CGEQFjAF&url=http%3A%2F%2Fwww.ifpri.org%2Fsites%2Fdefault%2 Ffiles%2Fpublications%2Frr165.pdf&ei=ieYeUKPmDaaUjAKohYGoCg&usg=AFQjCNGRdGxEKwKXEG1ND1W61kuq_Xk2vA&sig2=obe5tVuBhSNRA1ylrh2C3A).
Historic Drought:
Fact 1: We here in Oklahoma are now under a system called Volunatary Rationing. This was created to temper the use of water, and is based upon the odd and even address numbers of your house number, and it relates to every other calander day.
Fact 2: When I was a child, I remember Water Rationing, and its effects on our everyday lives. (Just try it for a week...and you will understand.)
Fact 3: For those who do not know, "Voluntary" is the first step before, "Mandatory" goes into effect. And it sucks.
Take all the charts, graphs, and studies, and throw them out the window when water is rationed in any community. People act irationally. Peroid.
JMHO,:munchin
Holly:boohoo
Historic Drought:
Fact 1: We here in Oklahoma are now under a system called Volunatary Rationing. This was created to temper the use of water, and is based upon the odd and even address numbers of your house number, and it relates to every other calander day.
Fact 2: When I was a child, I remember Water Rationing, and its effects on our everyday lives. (Just try it for a week...and you will understand.)
Fact 3: For those who do not know, "Voluntary" is the first step before, "Mandatory" goes into effect. And it sucks.
Take all the charts, graphs, and studies, and throw them out the window when water is rationed in any community. People act irationally. Peroid.
JMHO,:munchin
Holly:boohoo
Similar program up her in Hillbillyville.
Chapter two of the report available here (http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&ved=0CGEQFjAF&url=http%3A%2F%2Fwww.ifpri.org%2Fsites%2Fdefault%2 Ffiles%2Fpublications%2Frr165.pdf&ei=ieYeUKPmDaaUjAKohYGoCg&usg=AFQjCNGRdGxEKwKXEG1ND1W61kuq_Xk2vA&sig2=obe5tVuBhSNRA1ylrh2C3A).
Cheers!
Historic Drought:
Fact 1: We here in Oklahoma are now under a system called Volunatary Rationing. This was created to temper the use of water, and is based upon the odd and even address numbers of your house number, and it relates to every other calander day.
Hmm, those of us here in Colorado Springs that are on municipal water have been under mandatory water restrictions (as defined above) since around 2005. I guess I've had it a lot worse than I realized.
GratefulCitizen
08-23-2012, 15:34
Roger, I would rather have the option. ;)
FWIW:
http://pure-gas.org/index.jsp?stateprov=TX
http://www.buyrealgas.com/Texas.html
FWIW:
http://pure-gas.org/index.jsp?stateprov=TX
http://www.buyrealgas.com/Texas.html
Good info for those here in Texas, or travelling through. Little far for me to go, the closest being 34 miles (one way). Tempting, just to run some real gas for a change.
Makes me wonder the hows and whys these stations can pump ethanol free gas, but those closer to the major through ways (US75, I35) do not pump it.
Also larger concentration in east Texas, and less in populated areas (Dallas, Austin, Houston, San Antonio).
Hmmm...makes me wonder why.
Thanks for the info.:)
BT
On the bright side of things, we did, here in the Dallas area, get a bit of rain last week. Need lots more, but it was nice while it lasted. Greened up the grass a little.
How is everyone else doing?