CBOT Wheat Price Swings On Wednesday 2/27 Exceeded Price Per Bushel In 2000

[hatrack]

EDIT

On Wednesday, May wheat settled at $12.50 a bushel, down from a high of $13.49. It opened at $10.79 after dropping by $1.35 in overnight trading. The day's $2.70 range reached the exchange's price limits and was more than the actual price per bushel just eight years ago. Soft red wheat has doubled in less than a year in Chicago, while spring wheat on the Minneapolis Grain Exchange has more than doubled since September, to $17.47 a bushel.

What's more, those prices may have attracted speculators instead of commercial hedging on wheat prices. And that is significant because it can lead to more pricing volatility, said Joe Sowers, an analyst for U.S. Wheat Associates, an industry organization based outside Washington. Sowers said this phenomenon traces to March 2006, when droughts in Texas and Oklahoma reduced wheat harvests. Australian farmers endured droughts in 2006 and 2007, and wheat production in the European Union also fell because of weather problems.

That led traditional grain exporters such as Russia, Kazakhstan and Argentina to restrict foreign access to their wheat, hoping that would ward off inflation in their countries. Foreign buyers responded by flocking to America's markets, routinely placing large orders. In overnight trading Tuesday, Iraq alone bought more than 550,000 tons of hard red winter wheat. "A Nigerian can buy wheat the same way as a Japanese trader or a miller in Iowa," Sowers said. "It's an open-access market."

As a result, organizations such as the American Bakers Association want the Agriculture Department to re-examine its export regulations in order to better protect national supplies. The Agriculture Department trusts the invisible hand of the free market. It predicted that the high prices will cause farmers to plant greater quantities of wheat, improving the yield next fiscal year.

EDIT

http://www.chicagotribune.com/business/chi-thu_wheatfeb28,0,7516072.story

[izquierdista]

1. Invisible hand

About as believable as the invisible man who live in the sky and is all powerful but can't speak to anyone except an old man in a white dress.

[pscot]

2. The "invisible hand of the free market"

has its invisible fingers clamped firmly around American's throats.

[GliderGuider]

3. The people who are really being choked off are the Africans.

http://www.paulchefurka.ca/Africa/Africa.html

Between international food aid drying up and import costs rising out of sight, they are screwed. Last night I plugged more realistic numbers for global food price inflation into my Africa_2040 model (20%/yr instead of 12%/yr) and adjusted the fertilizer price and utilization parameters in light of the natural gas analysis just published on The Oil Drum. The model told me that under those conditions Africa could have a population of 250 million by 2040, compared to 900+ million today.

The USA and Canada have lots of discretionary income, we're not going to starve over the next couple of decades. It's a very different story in Africa.

[OKIsItJustMe]

5. Check out Nihil's "revelation"

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=135846&mesg_id=135930

[Trillo]

6. One would hope that in this day and age of "enlightenment"

we could figure out how to feed everyone the world over.

[phantom power]

7. the fact that you had to put "enlightenment" in quotes tells all...

Africa is going to get thrown under the bus of demand-destruction.

[GliderGuider]

8. Why would you expect that?

Such altruism isn't usually practiced outside one's own kinship group. Besides, there are strong religious objections in the West to doing this - the religion in question being "Our Lady of the Invisible Hand". There are also significant logistical hurdles to food distribution within Africa that raise costs and reduce the amount of food that can physically get to those in need even if it were available.

Besides (and here I'm being serious, even if it sounds like I'm being mischievous):

Supplying more food today just causes more famine tomorrow. We have grown more food every single year since agriculture got underway 10,000 years ago, and we have not eliminated hunger - we have just enabled the production of more people. If that is true, how will producing yet more food or distributing it better solve the problem?

[Trillo]

9. I wasn't thinking of altruism. That was your presumption

Yes, the problems with food distribution, and national corruptions leading to distribution problems are a problem. I don't believe that I wrote "a few" should increase food production, so it could be given away to others, keeping them dependent, like pets (which we don't have) or slaves (work harder to make more money to give to corporate farms). That was your presumption, though one that's quite understandable.

Gee, I wonder if by the time of 8th grade, currently, all children in the U.S. are fully schooled in how to obtain enough land, and fully competent enough in horticultural and livestock practices that they can grow enough to support themselves (not meant as a snark, it's actually a longterm and heartfelt observed weakness in our wonderful "education" system which has failed most of us miserably).

Even here on DU that attitude is that if your education was poor, the answer is more education. Yes, lets keep doing what didn't work in the past, (because it's been so successful at perpetuating a culture of haves and have nots?)

Your famine observation has been traced back to the first "civilized" humans and the alteration of family structures that optimized for "breeding", oh, excuse me, "having", higher numbers of children. Say, about, 6K years ago. Money.

Anyway, Africa is known as one of the few remaining holdouts for a high current birthrate. Curiously, there's an article out today about China reconsidering its One Child policy.

[GliderGuider]

10. When you say "equitable" that implies some degree of altruism

Altruism involves disadvantaging yourself or your kinship group for the benefit of another person or group, without the expectation of reciprocal benefit. IMO equitable distribution of food falls into that category. "Enlightenment" might or might not - you didn't explain what you meant by the term. If it involved giving the knowledge or capability of growing food to others without the expectation of reciprocal benefit, I'd argue that it's just altruism with a slightly different label.

The first rule of food is: never take the risk of not having enough for yourself or your kin. The second rule of food is: if significant quantities of food are involved, they must be acquired through competition. Giving unrelated others significant amounts of food without having them acquire it through competition means that we may end up taking the risk prohibited by Rule #1. Therefore altruistic giving may only involve relatively insignificant amounts of food, at least from the perspective of the giver.

The famine observation can actually be traced back 10,000 years, to the beginnings of totalitarian agriculture in the Fertile Crescent of the Middle East. The development of this style of agriculture created surplus food, which then permitted the expansion of populations, which resulted in social organizations that supported large families, which then required larger food surpluses, which then permitted more population expansion, which required more food, which permitted more people... It was the first major human positive feedback loop, one we are still caught in. Every year for the last 10,000 years we have grown more food, but we have not eliminated hunger. Instead we have produced more mouths.

Interestingly, the control of the food supply that was enabled by totalitarian agriculture was precisely what created "rich" and "poor" and still drives the growing disparity between them. Once you control someone else's food supply (which is what modern agriculture is all about) you can make them do almost anything for you. If they are farmers themselves this includes giving you most of the food they grow in return for you giving back just enough for them to live on. They will keep doing this in the mere hope that you will keep giving them enough to live on, because the alternative is certain death -- after all, you control the food. That control enables you to amass all the surplus to yourself, and then dole it out to your favoured ones -- especially those that help you keep power (i.e. your army). The same carrot and stick you use on the farming peasants works on them too -- do my bidding and you will live well, defy me and you will starve.

We have mostly disguised this naked power game through the use of money as a proxy for food, but if you scratch the veneer a bit the mechanism immediately shows through. An urban wage-earner must do as his boss commands, or he will find himself without the means to buy food for himself or his family. He may change jobs, but unless he adopts a subservient attitude at each one he will be cast out, foodless. I claim that we have "mostly" disguised this power game, but in societies that get close to the breaking point, like Zimbabwe, it becomes nakedly apparent. Money in this context is nothing but a proxy for food.

Altruism or "enlightenment" in this arena is rare, because food is one of the most basic power tools we have. That's why you often see food aid packages with "strings" attached by the donor countries. Ironically, one of the strings is often "no birth control"...

One last correction is in order. Africa is not "one of the few remaining holdouts" with high fertility. Over half the world's population live in countries with fertility rates greater than replacement. Besides Africa, that includes all of South Asia (India, Pakistan, Bangladesh) as well as most of Central and South America -- over 3 billion people in all.

China is contemplating relaxing its policy because of a gender imbalance and an aging demographic. Their TFR is around 1.7, so they can afford to go to a two-child policy, at least for a while. They are still worried about triggering another population boom. I don't think that's a long-term concern, because the signs are all around that the world is about at its Malthusian limit. Any incipient baby boom in China would probably be damped by caloric insufficiency, as it will in Africa and South Asia as well.

[Trillo]

11. Correct all you want, but when you claim I wrote a word I never wrote,

I kinda figure everything else you write is constructed with similar care, at best.

http://www.mapsofworld.com/world-top-ten/countries-with-highest-birth-rates.html

edited to add another, more complete graphic (not just top 10):
http://www.pregnantpause.org/numbers/fertility.htm

BTW, Africa is a continent, comprised of a number of countries.

[GliderGuider]

12. OK, what did you mean by "enlightened"?

How would the world demonstrate enlightenment?

Yes, Africa has high birthrates, as well as high TFR. As a result Africa, and especially Sub-Saharan Africa is going to be the crucible for food security problems in the next decade.

In my previous post I took to the opportunity to write down some of the things I've been thinking about over the last few days. Sorry If I went off on a tangent.

[GliderGuider]

13. And I'm sorry I got the word wrong.

All I can sat is it was late and I was wrapped up in my own thoughts. I'll try to do better than that in the future.

[Trillo]

14. I was too hard with my words, I'm also sorry.

Yes, enlightened seems to have overtones toward more equality, though your quote and phrasing indicated I had used that precise word. I was using enlightenment as a generalized reference to the Age of Enlightenment, of which I make no claims of being an expert upon. I think of altruism differently. Briefly, we humans seem to have artificial inequalities that would not exist in the natural world of hunter gatherers, we seem to vastly overvalue some apparent traits or qualities or disciplines (such as CEO, but others as well, hinted at by my educational criticism above), and everyone else is undervalued as a lessor, when in fact each of us has great, though somewhat subtly different, skills, so how can it be altruistic to assert one's natural birthright that was artificially usurped by others? (not meant as a question to be answered, rather to instigate a tangent of thoughts)

I'm also sorry if I should have showed more tolerance and understanding toward your ideas and thoughts expressed, it's possible I partly misunderstood you. Your first words that I inwardly reacted to were: "The USA and Canada have lots of discretionary income, we're not going to starve over the next couple of decades. It's a very different story in Africa."

I don't know about Canada, but a few exceedingly wealthy, and large masses of poor, seems to be a generalized pattern that exists everywhere. There are a large number of poor people in the USA that have trouble feeding themselves, that do not have lots of disposable or discretionary income, and aid for the poorest of them has reportedly been reduced in recent years. I also find little comfort in the idea that 'we are okay but those people "over there" are not'.

I find it hard to stomach the idea that a 'civilization', and we now seem to have a global one in spite of national borders, would let some people go hungry and refuse to find 'practical' solutions that need, including the issue of a growing human population that is already at least five-to-ten times too great for our natural globe to sustain.

With as many intelligent people as there are in positions of power and influence and control, I cannot rule out the possibility that this is a deliberate system of managed scarcity (even managed over centuries) to result precisely where it is today. You also hinted at that with your strings attached phrase.

[GliderGuider]

15. These are excellent thoughts. You're taking this stuff seriously.

I have a suggestion that will give you a brand new perspective on these problems. Read two books. They're both very short reads, easy and fun. They pretend to be novels, but in fact they're slightly disguised presentations of a very different way of understanding the world, based on ecology and a re-examination of the meaning and effect of the agricultural revolution of 8,000 BC. The amazing thing both books are 12 years old.

The books are "Ishmael" and "The Story of B" by Daniel Quinn. The only other book that has stopped me in my tracks like these two was William Catton's "Overshoot", but these are a lot more fun to read. Once you finish them, you'll never look at agriculture, social structures, power dynamics or economics the same way again. For someone who is wondering WTF is going on here, these two innocent-looking paperbacks can be revolutionary.

[kristopher]

17. Food for thought

Universal Declaration of Human Rights


Adopted and proclaimed by General Assembly resolution 217 A (III) of 10 December 1948

On December 10, 1948 the General Assembly of the United Nations adopted and proclaimed the Universal Declaration of Human Rights the full text of which appears in the following pages. Following this historic act the Assembly called upon all Member countries to publicize the text of the Declaration and "to cause it to be disseminated, displayed, read and expounded principally in schools and other educational institutions, without distinction based on the political status of countries or territories."

PREAMBLE

Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world,

Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people,

Whereas it is essential, if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights should be protected by the rule of law,

Whereas it is essential to promote the development of friendly relations between nations,

Whereas the peoples of the United Nations have in the Charter reaffirmed their faith in fundamental human rights, in the dignity and worth of the human person and in the equal rights of men and women and have determined to promote social progress and better standards of life in larger freedom,

Whereas Member States have pledged themselves to achieve, in co-operation with the United Nations, the promotion of universal respect for and observance of human rights and fundamental freedoms,

Whereas a common understanding of these rights and freedoms is of the greatest importance for the full realization of this pledge,

Now, Therefore THE GENERAL ASSEMBLY proclaims THIS UNIVERSAL DECLARATION OF HUMAN RIGHTS as a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction.

Article 1.

All human beings are born free and equal in dignity and rights.They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.

Article 2.

Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty.

Article 3.

Everyone has the right to life, liberty and security of person.

Article 4.

No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms.

Article 5.

No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.

Article 6.

Everyone has the right to recognition everywhere as a person before the law.

Article 7.

All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination.

Article 8.

Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law.

Article 9.

No one shall be subjected to arbitrary arrest, detention or exile.

Article 10.

Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in the determination of his rights and obligations and of any criminal charge against him.

Article 11.

(1) Everyone charged with a penal offence has the right to be presumed innocent until proved guilty according to law in a public trial at which he has had all the guarantees necessary for his defence.

(2) No one shall be held guilty of any penal offence on account of any act or omission which did not constitute a penal offence, under national or international law, at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the penal offence was committed.

Article 12.

No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.

Article 13.

(1) Everyone has the right to freedom of movement and residence within the borders of each state.

(2) Everyone has the right to leave any country, including his own, and to return to his country.

Article 14.

(1) Everyone has the right to seek and to enjoy in other countries asylum from persecution.

(2) This right may not be invoked in the case of prosecutions genuinely arising from non-political crimes or from acts contrary to the purposes and principles of the United Nations.

Article 15.

(1) Everyone has the right to a nationality.

(2) No one shall be arbitrarily deprived of his nationality nor denied the right to change his nationality.

Article 16.

(1) Men and women of full age, without any limitation due to race, nationality or religion, have the right to marry and to found a family. They are entitled to equal rights as to marriage, during marriage and at its dissolution.

(2) Marriage shall be entered into only with the free and full consent of the intending spouses.

(3) The family is the natural and fundamental group unit of society and is entitled to protection by society and the State.

Article 17.

(1) Everyone has the right to own property alone as well as in association with others.

(2) No one shall be arbitrarily deprived of his property.

Article 18.

Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief, and freedom, either alone or in community with others and in public or private, to manifest his religion or belief in teaching, practice, worship and observance.

Article 19.

Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.

Article 20.

(1) Everyone has the right to freedom of peaceful assembly and association.

(2) No one may be compelled to belong to an association.

Article 21.

(1) Everyone has the right to take part in the government of his country, directly or through freely chosen representatives.

(2) Everyone has the right of equal access to public service in his country.

(3) The will of the people shall be the basis of the authority of government; this will shall be expressed in periodic and genuine elections which shall be by universal and equal suffrage and shall be held by secret vote or by equivalent free voting procedures.

Article 22.

Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.

Article 23.

(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.

(2) Everyone, without any discrimination, has the right to equal pay for equal work.

(3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.

(4) Everyone has the right to form and to join trade unions for the protection of his interests.

Article 24.

Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.

Article 25.

(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

(2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

Article 26.

(1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.

(2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.

(3) Parents have a prior right to choose the kind of education that shall be given to their children.

Article 27.

(1) Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits.

(2) Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.

Article 28.

Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized.

Article 29.

(1) Everyone has duties to the community in which alone the free and full development of his personality is possible.

(2) In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society.

(3) These rights and freedoms may in no case be exercised contrary to the purposes and principles of the United Nations.

Article 30.

Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein.

[amandabeech]

16. Here's an article that you might find interesting concerning increasing

agricultural output in some parts of Africa:

http://biopact.com/2008/02/doubling-food-production-in-sub-saharan.html

Apparently, application of locally produced agricultural lime might greatly improve yields even without heavy applications of chemical fertilizer.

Farmland in the U.S. that was once forest floor requires application of lime to get most crops going in the acidic soil. I'm surprised that lime hasn't been tried previously. Composting, even of human wastes if done correctly, might help, too.

As would a real trend to smaller families, at least in some places.

[OKIsItJustMe]

4. 'Panic' wheat buying across the US

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=135846&mesg_id=135846