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Wheat costs rise
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The price of oil is not the only commodity reaching record prices. Now wheat and rice are contending for headlines in the world news.
The price of flour has soared recently. Wheat, historically around $7 per bushel, has reached as high as $24 per bushel.
This fact completely escaped me until I walked to my favorite pizzeria in mid-town Manhattan and discovered that the price of my pizza slice had gone up from $2.00 to $2.50. Hearing my complaint, the manager stepped over and said, “It’s the price of flour. Gone up too much.”
Unfortunately, the rise in costs has impacted other parts of the world in more devastating ways than fifty cents for pizza.
The problem for Banda is the tendency for overreaction. He also commented, “The Ministry of Trade would continuously monitor the market so that traders do not take advantage of consumers and we are going to deal with those who will charge highly.” Monitoring is fine — and perhaps needed in extreme cases like Haiti’s and Cairo’s — as long as the government avoids the temptation to make the price artificially low.
Because I returned to my pizzeria today when I heard prices had returned to normal to bring customers back. Markets often correct themselves. If the price goes too high, people will not buy. As demand decreases, so will price to attract more customers.
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A matter of life
And the price of corn?
As we increase dependence upon ethanol it should go up. I think ethanol made from corn is just a boondoggle. It takes a heck of a lot more energy to make it than you get out of it….
We should all contemplate that the world population today is nearly double what it was “just the other day” in 1970. Meanwhile, all the food grown during this period and before has been grown with petro-fertilizers and petro-pesticides, and planted and harvested with petro-powered machines. We simply would not be able to feed the current world population with “green” agricultural methods, as practiced throughout all human history before the 20th century. Our addiction to oil goes beyond plastic and SUVs — the very cells of our bodies are ultimately grown from oil.
Anyway, these stupid liberals have outdone themselves with the “corn for ethanol” scheme. As reported in WORLD, this has created a crisis in the corn supply, especially in the Third World, the objects of liberal compassion. Worse, at the world’s rate of energy consumption, that’s all we need is a fuel supply at the mercy of the caprices of agriculture — one bad harvest and everybody has to park their cars for a year.
Whether the libs like it or not, crude oil is the only energy resource that provides enough “bang for the buck” to sustain our 21st century lifestyle. Though most libs won’t openly admit it, the only “real* solution to the environmental problem is to reduce the world’s population by about 90%.
So the supply problems with corn and now wheat and rice are only the beginning. Why don’t all you “end times” theorists find a way to wrap your eschatology around that?
Jay - before you blame libs for ethanol, find me a conservative Republican who votes against it. Sorry, you can’t find it. Thank the corn lobby for that.
You can wax poetic all you want about oil, but no one wants to be dependent on it, especially when it comes from the Middle East. You think energy at the caprices of agriculture is bad? I say energy at the hands of Islamofascists is much worse.
There are other reasons the price of commodities are going up. The big reason: the falling dollar. Oh yeah, increased consumption in places like India and China. Those pesky Asians are increasing their consumption of oil and food.
If you think ending the ethanol subsidy will cure all those ills, you’re nuts.
People need to think about commodities differently today then they did just a couple of years ago. You can no longer think about the USA’s markets. Everything is global now - when it comes to commodities.
Just because no one is buying pizza along with Anthony does not at all mean that the price of wheat will go down. The fact is, wheat prices will most likely continue to go up even if there is never another piece of pizza sold in the USA ever again.
The demand for wheat globally is exploding because the developing world can now afford to buy it. Their economies and net worth is increasing dramatically so wheat continues to be more affordable and when things get more affordable more of it is sold. The few people in USA who do no buy pizza because the price has risen pales against the billions of people who can now afford bread. But two other things are going on that also causes the price of wheat to go up. We grow most of the worlds wheat in the USA but many acres that normally would have been planted in wheat and soybeans are now planted in corn because of government subsidies for ethanol. Also the worth of the US dollar is going down against foreign currencies. So the developed world, because their currencies are inflating against the dollar can afford wheat more easily while Americans cannot.
Wheat and soybeans have been the best commodities as far as food goes and corn has been OK.
But all commodities, meat, oil, water, natural gas, metals etc are performing fantastically for investors and will continue to do so because developing nations are becoming rich enough to buy them now and the supply cannot keep up with the demand. High demand and low supply means prices shooting upward at fantastic rates. If your currency value is falling at the same time like the US dollar is - you care doubly whacked with the real killer - inflation.
Nothing will make poorer faster than inflation.
You only have yourselves to blame for electing socialists to the House and Senate. If you elect one as president while they control congress so there is no veto against their crazy economic and financial ideas, then you deserve to be poor.
Hope you took your money off shore, shorted the stock markets of the world while buying puts on the commodities futures. They you are the cats meow.
Sorry, Then you are the cats meow.
A day’s wages for a loaf of bread…
To JayfromCleveland…You make the mistake that many make “Whether the libs like it or not, crude oil is the only energy resource that provides enough “bang for the buck” to sustain our 21st century lifestyle.”
In fact, we have Oil Shale reserves in Western Colorado, Southwestern Wyoming and Eastern Utah to supply the U. S. with oil for the next 200 years. Add that to the U.S. Coal reserves (for coal gasification), and we would not need to import from the mid-east.
Unfortunately those same libs in congress are “Stuck on Stupid” and refuse to allow it to be produced. Most of them believe the “CO2 from coal, oil, etc. is dirty” fraud put out by the environmental wackos. If CO2 is dirty, we would all need to wear gas masks so we don’t spew that “dirty CO2″ out each time we exhale. We would also need to put CO2 masks on every other animal on the planet.
#7 Jesse, sure, there are other ways to get fossil fuel, but with crude, you just poke a hole in the ground and open the spigot. Even if you have to ship it halfway around the world, there’s nothing as easy to extract for the greatest number of BTUs.
Another thing the libs don’t want to think about is nuclear power. We could supply a great deal of electricity without burning any fossil fuel. But the libs would rather lead us back to the stone age to starve in the dark.
#3 Lester — good point about the corn lobby, there’s enough blame to go around I’m sure. Your other remarks were off-point from my post.
I’ve also long been open to alternative energy, but most people don’t consider all the variables. These libs are especially bad since they are driven by idealism rather than real-world arithmetic. They oughta spend some time at the Department of Energy web site and read just exactly how much energy is consumed each year in the world — 15 quads (quadrillion BTUs) Anyone know how much that is? It’s just staggering.
Lately I’m seeing a lot of news about microbially or bacterially produced fuels using these “engineered” bugs. I think there’s a lot of promise to making waste into fuels. We could solve several problems at once this way…
Make it Man,
Mack to methane digesters for farm use where these little bugs break down animal wastes into methane that is captured for fuel and fertilizer while not polluting the earth like animal waste used to.
This is a triple win and about as good as it gets unless you live in a windy part of North American. It’s tough to beat wind for energy but these new flexible nanotechnology solar cells printed on plastic film are very cool indeed - not to mention very cheap to make, light weight and efficient.
Soon, technnology will finally get alternative energy as cheap as very expensive fossil fuels today. Science to the rescue. Sadly, it took 35 years too long to make it happen due to the low cost of fossil fuels in the past.
We hear the masses cry about the price of food! The farmers are getting rich! Food for people; not for profit! Milk for babies; not for profit! The socialist mantras abound that we must control these prices for the good of the country.
Guess what!! It won’t work!! The only way to drop the prices of the food is to drop the prices of the inputs and that is impossible unless the price of oil is reduced. The only way that will be reduced is by allowing and encouraging our own exploration and development of fossil fuels, which (as mentioned in earlier posts)are the most efficient to refine and deliver to the consumer.
The only biofuels that could be used more efficiently are the oils that have already been processed and could be refined and cleaned then burned to provide heat or power. What we really need to concentrate on is a clean way to process (incinerate) all of our garbage and sewage to produce heat, power, electricity and fertilizer to reduce our dependence on fossil fuels. This is called “recycling”. Novel idea!!
Does anybody remember the old cars in the 50’s that were heavier than any of todays SUV’s yet got better mileage than today’s comparable cars by far.
We have helped other countries become more efficient in the industries (especially farming) but these other countries are not required to maintain the same standards of emmissions (and labor) that we are in producing the same product. They are crying that the US needs to go back to the level of emissions of the early 90’s yet they have no standards because they are “developing”. Many are using forced or child labor in the factories and the standard of living is poverty compared to our poverty.
They should be required to use the technology we have developed so their air and environment never gets bad. But then their cost would be more and they couldn’t afford to produce it and still sell it to us for what they are! Never ending cycle. I could go on but I think you get the jist of where this is going.
The other big waste is water. How can we reduce our dependence on “new” water?
Also what Llama said!! Excellent points!
New oil estimates! go to
http://nextbigfuture.com/2008/04/usgs-bakken-oil-study-released-365.html
Burning food for fuel just seems unwise.
Wow, this discussion has gotten rather heated with a fair amount of name calling.
We do have a number of problems here, but the causes seem a little overdetermined.
We have rising food and energy prices, the
falling dollar and stock market values,
falling housing values, and an
unresolved debate over our energy future.
I think that the easiest problems for which to establish accurate causes are probably the falling dollar, stock market values, and housing values. I have to admit that I do not have an exact handle on the supply/demand balance or imbalance in the housing market, but I suspect that all our difficulties with the three are a consequence of perpetual excessive spending, investment financed and leveraged through debt, and an overall “negative” trade imbalance. We buy more than we can afford, credit is cheap, and so we have a surplus of dollars and the value of the dollar drops. When liabilities are called up and cannot be met in the vastly inflated and speculated stock and housing markets, suddenly “paper” wealth vanishes, which is often our retirement savings.
With the fall in the dollar, future commodities prices will rise whether they be food or energy. Furthermore, political uncertainty with Iran and others along with their near-monopoly control through OPEC of the production of oil allows commodities futures speculators to maximize prices and profits.
Finally, what should we do about our energy future and energy stability? We have oil already accessible, but not enough immediately, in America. We also have coal and nuclear resources. Ethanol from corn and other products used in a mix with oil to provide E-85 and E-95 for cars and trucks or ethanol (instead of oil) turbines in power plants for peak demand loads are options. The flex fuel vehicles are already being produced, but except in the Midwest or Plains states, we have no distribution system and for now insufficient crop-to-ethanol production capability. Converting coal to a diesel-type fuel are also being investigated.
Now I am not a farmer and have made only a cursory review of USDA reports of available farmland. I heard an anecdotal comment from a co-worker yesterday in which he said most people around our area of Georgia had stopped planting crops and planted pine trees to get government conservation subsidies. In 2004, the federal government provided roughly $32 billion in farming subsidies, which could be said to have come from deficit spending.
Could we not encourage responsible farming in America and the third world, allow them to provide for their food needs, sell the surplus to us and to their local organizations to meet the energy needs, and reduce our deficit spending? What more do we need to know to make this a viable proposal? Let’s discuss nuclear options later, too.