Wheat prices rose further on Friday in the wake of Russia’s decision to extend its grain export ban by 12 months, raising fears about a return to the food shortages and riots of 2007-08.
In Mozambique, where a 30 per cent rise in bread prices triggered riots on Wednesday and Thursday, the government said seven people had been killed and 288 wounded.
Vladimir Putin’s announcement on Thursday extended an export ban first introduced last month until late December 2011, sending wheat and other cereals prices to a near two-year high. It came as the UN’s Food and Agriculture Organisation called an emergency meeting to discuss the wheat shortage.
Financial Times
Russia is the fourth largest exporter of wheat in the world. They have chosen to restrict exports due to worries that the poor production in their fields may not even feed their own people. This will cause a huge shortfall in wheat for many areas of the world, already causing riots in Africa that will spread to other areas. Even if America and Europe can make up the difference the cost of wheat will rise to a level that the undeveloped nations will be hard pressed to afford.
When He broke the third seal, I heard the third living creature saying, "Come " I looked, and behold, a black horse; and he who sat on it had a pair of scales in his hand.
And I heard something like a voice in the center of the four living creatures saying, "A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine."
Revelation 6:5-6
Moreover, He said to me, "Son of man, behold, I am going to break the staff of bread in Jerusalem, and they will eat bread by weight and with anxiety, and drink water by measure and in horror,...
Ezekiel 4:16
So, are we seeing the beginning of an apocalyptic scenario, something straight from the pages of the Bible itself? I don't know. However, it doesn't hurt to keep your eyes open to the signs all around us.
Let's face it; the world has seen many, many years when crops failed. We've made it through those and we will probably get through this. Of course, throughout most of our history most people have grown a significant portion of their own food on their own little piece of ground so crop failures were somewhat more localized and less likely to affect the world as a whole. Today, however, we rely on farming done on a massive scale to supply the food to an increasingly urban people that depend entirely on someone else to grow their food for them. Crop failure is no longer a local event.
So how important is wheat, anyway?
Wheat (Triticum spp.) is a grass, originally from the Fertile Crescent region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize (784 million tons) and rice (651 million tons). Globally, wheat is the leading source of vegetable protein in human food, having a higher protein content than either maize (corn) or rice, the other major cereals. In terms of total production tonnages used for food, it is currently second to rice as the main human food crop, and ahead of maize, after allowing for maize's more extensive use in animal feeds.
Wheat was a key factor enabling the emergence of city-based societies at the start of civilization because it was one of the first crops that could be easily cultivated on a large scale, and had the additional advantage of yielding a harvest that provides long-term storage of food. Wheat grain is a staple food used to make flour for leavened, flat and steamed breads, biscuits, cookies, cakes, breakfast cereal, pasta, noodles, couscous and for fermentation to make beer, other alcoholic beverages, or biofuel.
Wikipedia
Wheat, like corn, is part of nearly everything we eat. Fortunately, it seems that the wheat crop in America has done rather well this year.
"US farmers will reap the benefits from failing crops round the world, the US Department of Agriculture said on Thursday as it forecast the country’s second-largest wheat exports in 15 years, worth billions of dollars.
The USDA cut sharply its forecast for global wheat production following Russia’s worst drought in more than a century and lower output in the European Union, Ukraine and Kazakhstan.
But it predicted that US farmers would harvest a bumper wheat crop, leaving them well-placed to meet the needs of importing countries, which have been scrambling to secure new supplies after Moscow banned all grain exports last week."
CNBC
Since we live in a free market society where supply and demand generally sets prices, guess what's going to happen to our cost of living?
"With wheat futures soaring to their highest level in two years, you could soon find yourself paying more for a loaf of bread at the local grocery store.
The price of wheat has surged more than 80% from its seven-month low in June, rallying to its highest level since August 2008 this week, as Russia said it would ban grain exports until Dec. 1 due to a drought that has destroyed more than 20% of its wheat crop. Prices retreated Friday but still remain up 10% for the week.
If prices resume their upward trajectory, you could wind up paying 25% to 30% more for a loaf of bread and at least 10% more for a pizza by the end of August or early September, said Darin Newsom, a senior analyst at Telvent DTN, an agriculture and commodities information company.
That would translate into a price hike of as much as 90 cents more for a $3 loaf of bread, and a bump of $1.40 for a $14 pizza."
Money.CNN
Knowing that wheat is an essential part of many of the foods we take for granted I would suspect that the prices of more than just bread and pizza will be on the rise. All while unemployment is going up and even those that are working are doing it, in many cases, for a whole lot less than they used to make. Full time jobs have become part time and wages, for many at least, have fallen in a big way.
Of course, you'd never know that we are in the economic shape we're in if you follow the numbers published by the government. They distort everything to paint a rosy picture while they attempt to keep this giant lie of financial prosperity going for just one more day.
What if they've been lying about our food supplies as well?
"Early in 2009, the supply and demand in agricultural markets went badly out of balance. The world experienced a catastrophic fall in food production as a result of the financial crisis (low commodity prices and lack of credit) and adverse weather on a global scale. Meanwhile, China and other Asian exporters, in an effort to preserve their economic growth, were unleashing domestic consumption long constrained by inflation fears, and demand for raw materials, especially food staples, exploded as Chinese consumers worked their way towards American-style overconsumption, prodded on by a flood of cheap credit and easy loans from the government.
Normally food prices should have already shot higher months ago, leading to lower food consumption and bringing the global food supply/demand situation back into balance. This never happened because the United States Department of Agriculture (USDA), instead of adjusting production estimates down to reflect decreased production, adjusted estimates upwards to match increasing demand from china. In this way, the USDA has brought supply and demand back into balance (on paper) and temporarily delayed a rise in food prices by ensuring a catastrophe in 2010.
It is absolutely key to understand that the production of agricultural goods is a fixed, once a year cycle (or twice a year in the case of double crops). The wheat, corn, soybeans and other food staples are harvested in the fall/spring and then that is it for production. It doesn’t matter how high prices go or how desperate people get, no new supply can be brought online until the next harvest at the earliest. The supply must last until the next harvest, which is why it is critical that food is correctly priced to avoid overconsumption, otherwise food shortages occur.
The USDA—by manufacturing the data needed to keep supply and demand in balance—has ensured that agricultural commodities are incorrectly priced, which has lead to overconsumption and has guaranteed disaster next year when supplies run out."
Market Skeptics
Isn't that special? If the article above is true then the abundant harvest in America will only push off the inevitable. If we have to sell our wheat around the world to offset the failure in Russia we won't be able to rebuild our depleted storehouses. We may be able to cover the shortfall temporarily but if we were already short on food stores then it will all end in the same place, starvation. If we do the logical thing, that is keep our wheat and store it to build up our short supplies, then others will starve. If we sell it then we will, if not starve, be hard pressed to feed ourselves and probably completely unable to absorb the rise in cost for a scare commodity, our daily bread.
Since there is a short term profit to be made you better believe we'll be selling our lives along with our wheat as quickly as we can. If the government has been lying about the numbers regarding food then the chances are that most of the people involved in the process don't understand the damage they're doing, anyway.
Have we sown the seeds of our own destruction? Has our way of living, reliant on others for our daily bread created a situation that will truly became a disaster of Biblical proportions? Has our global interconnectedness set up a game of dominoes so that if one falls the rest go with it?
Our we about to pay the price for putting ourselves in the place of God?
But if thou wilt not hear the voice of the Lord thy God, to keep and to do all his commandments and ceremonies, which I command thee this day, all these curses shall come upon thee, and overtake thee.
Cursed shalt thou be in the city, cursed in the field.
Cursed shall be thy barn, and cursed thy stores.
Cursed shall be the fruit of thy womb, and the fruit of thy ground, the herds of thy oxen, and the flocks of thy sheep.
Cursed shalt thou be coming in, and cursed going out.
The Lord shall send upon thee famine and hunger, and a rebuke upon all the works which thou shalt do: until he consume and destroy thee quickly, for thy most wicked inventions, by which thou hast forsaken me...
The Lord give thee dust for rain upon thy land, and let ashes come down from heaven upon thee, till thou be consumed.
Deuteronomy 28; 15-20;24
Enjoy the holiday weekend and make sure to fill yourselves with plenty of good food and drink. This just may be one of the last big holidays we can afford to do it.
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