Two weeks ago we explained why the drought-inspired soaring price of Soybeans – specifically from the US – would notably influence global central-planners’ actions – and more specifically the Chinese (given its high impact on food price inflation). Food prices remain elevated and the PBoC is undertaking Reverse Repos – the exact opposite of an RRR-driven easing program so many expected. However, there is a further, deeper, and more troubling consequence than ‘simple’ inflationary arguments – that of social unrest. Confirming our insight, the LA Times points out,
Soybean oil is the most important edible oil in China with more than two-thirds of cooking oil consumed in China coming from soybeans – and most of those soybeans are supplied by the US (more than half of US exports are to China and the US is China’s number 1 supplier). According to one official this “makes [China] vulnerable to the drought” and bound to the fortunes of farmers in the American heartland. The Chinese devote more than 20% of their income to food (three times more than Americans – according to the USDA).
MAYFIELD, Ky. (CNN/WPSD) – Ranchers have struggled with skyrocketing corn prices, because the drought has made feeding their livestock very expensive. But one rancher has turned to a very sweet solution.
At Mayfield’s United Livestock Commodities, owner Joseph Watson is tweaking the recipe for success.
“Just to be able to survive, we have to look for other sources of nutrition,” he said.
His 1,400 cattle are no longer feeding off corn. The prices, Watson says, are too high to keep corn in stock. So earlier this year, he began to buy second-hand candy.
“It has a higher ratio of fat than actually feeding straight corn,” Watson explained. “It’s hard to believe it will work but we’ve already seen the results of it now.”
The parched prairies of the Midwest are facing a natural disaster not seen since the ‘dusters’ of the 1930s
The jam jar sitting on John Vannatta’s kitchen table appears to be filled with coffee, until he shows you the label on the lid. The preserve inside is history, saved from a time when black blizzards filled the sky, turning day into night; a time when Americans starved. “Pure 1930s Blow Dirt,” it reads. It might also say: don’t forget, lest it happens again.
Not that Mr Vannatta, 92 – or his neighbour Huston Hanes – needs reminding. Both retired farmers, they are members of a very small club indeed: the last survivors of that great American epic, the Dust Bowl, that spanned 1932 to 1936 and coincided with the Great Depression.
Monsanto is by far one of the greatest disaster capitalists around. Not only does this paraiah of a company manufacture and sell genetically engineered crops (GMOs) that actually increase drought conditions, but it is now poised to capitalize on the very same conditions that it helps to cause.
In “Why in the World Are They Spraying?,” we talk about how Monsanto has a patent on genetically engineering plants able to withstand abiotic stresses such as drought and how it stands to profit from the effects of “climate change.” Therefore, with drought conditions worsening, like any good disaster capitalist, Monsanto is about to cash in. I expected it, others expected it, and here it is… just what we’ve been expecting… Continue reading »
As you read this, the United States is experiencing the worst drought it has seen since the Dust Bowl days of the 1930s. As you read this, nearly half of all corn crops in the United States are in “poor” or “very poor” condition. As you read this, 38 major wildfires are ripping across the central and western United States. The brutal wildfires in Oklahoma have been so bad that they have made national headlines. The price of corn has hit a brand new record high this summer and so has the price of soybeans. More than half of all the counties in this country have been declared to be “natural disaster areas” by the U.S. Department of Agriculture at this point. Things are so bad for ranchers that the CEO of Smithfield Foods is projecting that meat prices will rise by “significant double digits” in the months ahead. Sadly, this drought is projected to continue throughout August and into September. As you will read about below, some meteorologists are even openly postulating that there may not be enough moisture to avoid another drought next year. Yes, things are really bad this year, but when you step back and take a look at the broader picture they become truly frightening.According to the U.S. Drought Monitor, as of July 31st close to two-thirds of the continental United States was experiencing at least some level of drought….
Keep in mind that brown is “severe drought”, red is “extreme drought” and dark brown in “exceptional drought”.
This is truly a historic drought. We have never seen anything like this in modern times in the United States.
The week before, this is how the U.S. Drought Monitor described conditions in the center of the country….
“Over 90 percent of the topsoil was short or very short of moisture in Oklahoma, Kansas, Nebraska, Missouri, Iowa, Illinois, Indiana, and Ohio, with virtually all (99 percent) short or very short in Missouri and Illinois”
There had been some hope that rain would bring relief to farmers in the central part of the country, but instead things just keep getting worse and worse. Continue reading »
Severe drought spread rapidly across the central US this week, further damaging staple crops and heightening the risk of a global food crisis. The Midwest, where roughly one-third of the world’s staple grains are produced, is experiencing the deepest dry spell in over half a century.
The National Drought Mitigation Center in a statement Thursday reported “tremendous intensification of drought through Illinois, Iowa, Missouri, Indiana, Arkansas, Kansas and Nebraska, and into part of Wyoming and South Dakota in the last week.” Almost 30 percent of the Midwest is under extreme drought, triple that of the previous week.
Every state in the country had some counties under abnormally dry or drought conditions, making the disaster the most widespread US drought since the Dust Bowl of the 1930s. The US Department of Agriculture (USDA) has declared 1,369 counties across 31 states disaster areas—officially the largest US disaster on record.Continue reading »
Are you ready for the next major global food crisis? The price of corn hit an all-time record high on Thursday. So did the price of soybeans. The price of corn is up about 50 percent since the middle of last month, and the price of wheat has risen by about 50 percent over the past five weeks. On Thursday, corn for September delivery reached $8.166 per bushel, and many analysts believe that it could hit $10 a bushel before this crisis is over. The worst drought in the United States in more than 50 years is projected to continue well into August, and more than 1,300 counties in the United States have been declared to be official natural disaster areas. So how is this crisis going to affect the average person on the street? Well, most Americans and most Europeans are going to notice their grocery bills go up significantly over the coming months. That will not be pleasant. But in other areas of the world this crisis could mean the difference between life and death for some people. You see, half of all global corn exports come from the United States. So what happens if the U.S. does not have any corn to export? About a billion people around the world live on the edge of starvation, and today the Financial Times ran a front page story with the following headline: “World braced for new food crisis“. Millions upon millions of families in poor countries are barely able to feed themselves right now. So what happens if the price of the food that they buy goes up dramatically? Continue reading »
The blistering summer and ongoing drought conditions have the prompted the U.S. Agriculture Department to declare a federal disaster area in more than 1,000 counties covering 26 states. That’s almost one-third of all the counties in the United States, making it the largest distaster declaration ever made by the USDA.
The declaration covers almost every state in the southern half of the continental U.S., from South Carolina in the East to California in the West. It’s also includes Colorado and Wyoming (which have been hit by devatasting wildfires) and Illinois, Indiana, Kansas and Nebraska in the Midwest. However, it does not include Iowa, which is the largest grain and corn producer in the U.S. This map show the counties affected:
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