Peak Grain

I stayed for dinner after church today and, in conversation, the topic of wheat came up. If you didn’t know already, wheat prices have more than doubled from what they were a year ago. My pastor follows the grain market pretty closely. He told me the U.S. grain reserve is gone. There is no reserve. There used to be a surplus reserve of grain in this country. But it’s gone.

If that is true, it is an ominous development.

I decided to look into the subject with a Google search. I discovered a prophetic article written a year and a half ago that talked about the very low reserve of wheat and other grains. The article stated that prices were going to rise. But that will be just the beginning.

It behooves you to read the article. It is not long. It is not difficult to understand. Remember, it was written eighteen months ago. It was written before the price of wheat jumped so dramatically. It was written before your average Joe had a clue any of this was going to happen. Some people can see the handwriting on the wall. We need to take heed. Here is a link to the article:

Grain Drain: Get Ready For Peak Grain

And here is another similar article, written at the same time:

How Long Can The World Feed Itself?

6 comments:

Rick said...

The numbers have only gotten worse, according to a USDA report published this month:

"Global production in 2007/08 is estimated up 11.8 million tons to 605.0 million. This anemic growth follows the largest year-to-year drop in world wheat production in 12 years, and leaves production significantly short of use. World consumption is forecast up slightly, only one half of 1 percent. Global use is forecast to be 14.7 million tons greater than production, trimming projected ending stocks to 110.4 million tons, the lowest in 30 years."

Herrick Kimball said...

Rick-
Thanks for the additional, updated information.

Herrick Kimball said...

Back in the 1970s Gene Logsdon wrote a book titled, "Small Scale Grain Raising." I bought it nine years ago for $10 on Ebay. I know it was nine years ago because y2k was about to hit (or so we thought) and felt the book would be a useful addition to my library.

According to the recent article, Time to Start Growing Your Own Grain by Mr. Logsdon, used copies of the book are selling for hundreds of dollars on the internet.

Perhaps I will sell mine since he is in the process of republishing that book.

In any event, check out Mr. Logsdon's article.

Homestead Herbs said...

Prices of wheat are a reflection of supply and demand- nothing too sophisticated about it. There are three to four major sources of wheat in the world, US/Canada, South America, Australia and Europe (but most of Europe's production stays in Europe). These producing countries need to provide for the net importing countries, ie China, Europe, Africa etc... When there is production shortfalls (S. America and Australia last year) or increase in demand (China), prices are going to reflect the shortfalls.

In general production has been growing, but the import/consumption demand has been increasing at a higher rate, thereby decreasing inventory and prices.

Then you have to take a look at the complementary grains, corn and soybeans and analyze their supply and demand, and also take a look at the oil/natural gas supply demand...

Long explanation to say, prices will be high for at least 2 more years, predominantly due to China and oil. Or at least that's what some well known analysts are telling me! :-)

One can't look at just one aspect of the picture- it needs to be a global, all encompassing view!

Herrick Kimball said...

Thanks for the info Christine. High prices for at least two more years doesn't sound good, along with everything else that's happening with the economy. And, of course, a lot of this depends on the weather and crop yields, which analysists can never really know ahead of time. The "perfect storm" in grain/food supplies may be falling into place. Then again, it might not. But it looks like the situation is precarious.

Beautiful Each Day said...

I am looking forward eagerly to the new edition of Gene Lodgson's book. The older version of his book can be downloaded here:

http://www.soilandhealth.org

for a small donation or even free if you really need it. Look under the Personal Sovereignty Library.

This site has many amazing out of print guides to living the way we will all be soon.

Enjoy

-Robin