Thursday, February 28, 2008

Noah's Seed Ark

"Hey Noah, What are you building there?"
"An Ark."
"What's an Ark?" B Cosby
When I was a boy, I spent many a summer plowing in the rich soil along the Canadian river. I never got to plant mind you, my job was to disc, to turn the soil over. It was dusty and it was hot. And there were no air-conditioned cabs.

Back then, the price of wheat was 2 or 3 dollars a bushel. And in forty years, nothing much changed. As recently as 1999, wheat was trading at 2.40 bushel. But grain prices are on the move big time. Here's part of the the story from the CSM:

Wheat prices hit record high
The cost of March spring wheat hit $24 a bushel Monday,
double its cost two months ago.
By Ron Scherer

New York - Dressed in his white apron and baker's hat, Jose Espinal puts the finishing touches on a chicken pot pie that will be sold to customers of Cucina & Co. later in the day. He carefully places a crust on the pie and crimps the top and bottom together.

But to make the dough for about 300 pies, Mr. Espinal, the pastry chef, used 22 pounds of flour – an item that the store knows will soon be rising in price.

"I'm expecting it this week," says Michael Salmon, director of operations of Cucina, which is in Macy's in Manhattan. "Maybe 20 or 30 percent."

Why the increase? The prime ingredient in flour is wheat, which these days is acting more like oil – rising sharply on commodities exchanges. On Monday, the price of March spring wheat on the Minneapolis Grain Exchange shot up to $24 a bushel, the highest price ever. Within the past month, the price of some types of wheat has risen over 90 percent. Already, agricultural experts say, it's getting hard to find the type of wheat used to make pasta, noodles, pizza, and bagels.

"Supplies of some types of wheat will be extremely tight," says economist William Lapp, president of Advanced Economic Solutions in Omaha, Neb. "I don't think we'll see physical bread lines, but supplies will be just tight."

Companies that use wheat say they are overwhelmed by the sharp rise and have little choice but to pass on at least part of the increase to consumers. Flour manufacturers, for example, are raising prices by at least 30 percent or more. Since the beginning of the year, bread in the supermarket has risen anywhere from 10 to 30 cents a loaf. more

And here is another story from the North Queensland Register:

'Panic' wheat buying across the US
By Arlan Suderman, Farm Progress grain markets analyst
Tuesday, 26 February 2008

In the wheat price surge this week, the leading wheat contract in Minneapolis, US, has risen by more than the entire worth of the contract just months ago.

Prices rallied by $5.75 a bushel on Monday, being up by nearly 30pc at one point compared with Friday’s close. Eight months ago on June 19, the lead Minneapolis wheat contract settled at over $US5.00 a bushel.

Panic over commodity shortages continues to emerge as the dominant factor in the global markets, with both end user and speculative buyers of corn, soybean, cotton, rice and a host of other commodities taking note of what’s happening in the wheat pit.

While US has made improvements to increase crop production efficiency in recent years, the world hasn’t really put sufficient investment into production agriculture for several decades.
The net result has been declining stocks at the same time that expanding global wealth has demanded more raw commodities.

The net result on Monday was new all-time record high prices for corn, soybeans and wheat on the same day. more

Certainly, this run up in prices may be like other investor balloons, but what if something else is at work besides speculative greed? Like weather? And 100 oil? Here is Lester Brown of the Earth Institute writing about it six weeks ago:

January 24th, 2008

"We are witnessing the beginning of one of the great tragedies of history. The United States, in a misguided effort to reduce its oil insecurity by converting grain into fuel for cars, is generating global food insecurity on a scale never seen before.

The world is facing the most severe food price inflation in history as grain and soybean prices climb to all-time highs. Wheat trading on the Chicago Board of Trade on December 17th breached the $10 per bushel level for the first time ever. In mid-January, corn was trading over $5 per bushel, close to its historic high. And on January 11th, soybeans traded at $13.42 per bushel, the highest price ever recorded. All these prices are double those of a year or two ago.

As a result, prices of food products made directly from these commodities such as bread, pasta, and tortillas, and those made indirectly, such as pork, poultry, beef, milk, and eggs, are everywhere on the rise. In Mexico, corn meal prices are up 60 percent. In Pakistan, flour prices have doubled. China is facing rampant food price inflation, some of the worst in decades. " more

China has even instigated food price controls.

With all the hubbub over who gets to be the next supreme leader, grand papooska moose person, its easy to miss little stories like this, even with our quack, I mean crack corp of MSM reporters out there. But, I think it's safe to say that a four fold increase in wheat is a pretty important story.

Several days ago, we wrote about the Approaching Storm and how millions of people may starve in the next four to five years as climate continues to move and change.

It may not take that long.

Meanwhile, Noah's Ark for seeds just opened.

A seed Ark in the Arctic?

I'm happy about that.

I think.

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