Amber Waves of Grain

[Daveparts]

Amber Waves of Grain
By David Glenn Cox



You’re not hungry are you? I’m sorry but due to speculation and globalization we’ve sold that grain overseas. It might have been the wisdom of the Pharaohs to establish grain warehouses in Egypt to prevent famine but the wisdom of Ronald Reagan explained to us that it was just big government riding on our backs and trying to stick it to us.

Those granaries and warehouses full of cheese and other commodities, stored to insure supply and the stability of the markets under Reaganomics, were seen as anachronistic vestiges of the New Deal to be destroyed. The lessons hard learned in the first half of the 20th Century were to be forgotten in the second half. The set aside programs and price supports were designed to take the top and bottom out of the agricultural cycle.

Did they hinder the income that some farmers could earn? Yes, but they also prevented castrophe in a market downturn as was seen in the 1930’s when commodity prices fell until the crop wasn’t worth the cost to harvest, let alone to grow. The hidden hand of liberal government: keeping food prices low by subsidizing farmers and in so doing, subsidizing every food processing company in America, from Kraft to Kellogg and from M&M Mars to McDonalds, not to mention every man, woman and child in America.

Reaganomics portrayed itself as getting evil government off your backs and privatizing and eliminating programs that were costing you money. School lunches for poor children were costing you money, B2 bombers at almost a billion dollars a copy were keeping you safe. Commodity stockpiles were costing you money, opening old growth forests to clear cutting was just stupid greed. And stupid greed was the watchword, the elimination of the stockpiles opened up profits through speculation and provided that there were always more markets and ample supply and no one was any the wiser.

Now wheat prices are soaring world wide. The U.S. Department of Agriculture said in a report, Feb. 8. "Inventories will be the lowest since 1948," when farmers grew less and shipped supplies overseas to help countries rebuild after World War II. It is easy enough to understand shortages in 1948 but 2008? Was there another world war? With more devastated farmlands and economic disruption? Or, once again, you don’t mind paying more for that box of Total do you? Besides you’d have to eat 16 bowls of the competitor's cereal and you couldn’t afford that.

The higher prices stoke inflationary fears, as wheat, like oil, is a basic commodity. Its price increase will reverberate throughout the economy as a whole. But let's look at the bright side, a few hundred traders will make money, money, money!

"There isn't enough spring wheat to meet ongoing shipment demands of Asian customers,'' Simon Roberts, head of agricultural commodities at Australia and New Zealand Banking Group Ltd., said by phone from Sydney today.

March wheat deliveries rose 60 cents, or 5.5 percent, to $11.53 a bushel in after-hours electronic trading on the Chicago Board of Trade as of 10:15 a.m. In London. Prices gained 16 percent last week, the most ever, and have more than doubled in the past year.

The Chicago exchange doubled its daily limit from today after prices gained the previous maximum of 30 cents for five straight days.

The world’s largest producers of wheat, The United States, Canada and Australia, all suffered less than bumper crop harvests this year. The US, Canada and Australia all suffered through drought conditions. Now don’t you go blaming this on global warming because Republicans don’t believe in global warming and besides, with speculators making fortunes on the dwindling world food supply, why would they want to believe in it? You must have faith, they maintain. With God all things are possible and if he won’t cooperate there is always Monsanto!

Worldwide inventories of all wheat are expected to fall to 109.7 million metric tons by the end of the marketing year on May 31, down 1.1 percent from a January estimate and the lowest since 1978, the USDA said.

Exporters of the grain are expected to ship 3.9 percent less wheat in the marketing year because more countries are retaining domestic supplies to ensure food prices stay low. That has stepped up demand for U.S. exports.

God bless America, ain’t it great! Our boys are fighting and dying to defend our freedom to kill third world brown people and speculators are selling foodstuffs to the highest bidder, regardless of what it does to the domestic economy. Seems like, as usual, the Republicans got it backwards. We weren’t carrying big government on our back as much as it was carrying us. 330 million Americans will pay higher food prices so that a few hundred speculators can make a killing. The farmers received higher prices but the profit was offset by lower yields. What, then, if next year it is worse?

On the Minneapolis Grain Exchange, wheat for March delivery rose by the exchange limit of 60 cents to a record $16.13 a bushel. The price has more than tripled in the past year. Harvesting of this year’s spring wheat was limited after drought hurt plants last year in the northern Plains and in Canada.

Wheat for March delivery in Kansas City also rose by the exchange limit of 60 cents to a record $12.0025 a bushel. The price has more than doubled in the past year after an April freeze, followed by excessive rain, curbed yields.

What a system we have devised, a government that demands taxes and tribute and returns nothing back to its people but higher prices. To give back tax rebates to stimulate the economy with one hand while it allows, nay encourages, unbridled speculation of foodstuffs. For we don’t manufacture anything anymore so we must pay our foreign debt with food commodities. Remember that next time you hear about how wonderful free trade is.

A system where you, the citizen, are actually an impediment to their vision of progress. General Motors stocks rose Tuesday on news that the corporation lost one billion dollars last year in North America. But because of tax credits the loss was less than expected, the truly good news was GM is going to buy out 74,000 workers and replace them with lower paid workers. Like the wisdom of the Pharaohs the wisdom of Henry Ford is lost. Ford paid his workers five dollars a day in 1926 so that they could afford to buy the cars that they manufactured themselves. The new GM workers won’t be able to match their 1926 counterparts.

The cart before the horse, we work to make the corporations profitable. So that they, in turn, can provide lower paying jobs to make themselves even more profitable and when they’re not profitable we give them tax cuts to fuel the cycle yet again. The politicians of all stripes defend free trade as a Godsend but it doesn’t look that way to me. We watch the loss of good jobs, the demise of entire industries, the ruination of whole cities and now even the food from our tables. I hope someday they build a pyramid twice the size of the one at Giza and dedicate it to the wisdom of the Pharaohs and the monstrous greed of Wall Street and the politicians in their employ. A simple pyramid structure with a plaque that reads, “Never Again”