G.O.O.D

Source: farminguk.com

NO BUTTER AVAILABLE IN JAPAN,NO BREAD IN EGYPT,NO BEEF IN RUSSIA XMAS 2008,WHAT HAS GONE WRONG.

Its very hard to believe that in 1976 we had the famous Beef Mountain, Butter Mountain a Wine Lake and Milk Lake in Europe.

Beef was being subsidized and given to the Soviet Union, along with butter in the hundreds of thousands of tonnes. Milk was being poured down deserted mine shafts all over Europe and Apples and Plums were rotting by the train load as no one wanted them.

Every newspaper on a global basis has carried the story of the world food shortage for the last few months, CNN have set up a special web site www.cnn.com/worldfoodcrisis with numerous versions of the root cause of the problem.

In 2003 the EU farm commission were concerned that there was an over production of rural products in the European Union, they decided to act on the problem.

In May 2005 farmers were to be paid, the average of the previous 5 years subsidy on corn of fattening cattle on condition that they did not keep any animals or plough a field , this payment system is in its third year next month and continues until the year 2112.

What used to known as the worlds great exporting countries are now importing countries and farmers are being paid in the EU, not to produce.

We now have to add the other factors, increased demand from emerging economies such as Russia, India and China that have blossomed from nowhere in the last ten years.

James Neilson raised a very valid point in the Buenos Aires Herald when he said “The greenbacks collapse (US Dollar) has contributed greatly to a commodity boom which would look far less impressive if the prices of grain, soybeans, oil and minerals were set in euros. And the great food crisis ,he adds has little to do with production ,which is at record levels ,and a great deal to do with money” Mr Neilson is indeed correct in relation to Latin America especially Brazil and Argentina and there is no doubt the decline of the dollar earlier in the year has caused many problems.

However the aforementioned facts along with facts like Peasants in China have not been growing rice for the last 5 years, only enough for their own requirements, until this year when the price they receive justifies the labor.

In Argentina we are slaughtering cattle at 350 kilos as opposed to the rest of the world at 650 kilos,
Pig Farmers from England Ireland and Australia have losing money hand over fist, because of the cost of feed and the demand for low prices in supermarkets.

Poultry Producers have gained immeasurably for whilst meat and bone meal has been banned in feed for cattle because of the threat of BSE mad cow disease. However it is still allowed to be fed to poultry. Whilst no proof has been established of a link between cooked By products and BSE, one can reasonably assume if humans can indeed become infected by beef they can as easily become infected by chicken.

There have been Food Riots in Egypt over the price of bread and the Police in fact baking 70,000 loaves a day in Cairo for the poor, Butchers shops in Egypt are turning over the same amount of money as last year but selling 50pc less beef.

From the worlds top 10 beef exporting countries 25 years ago, Botswana, South Africa, Zimbabwe ,Romania and the old Yugoslavian nations have become beef importers on a very large scale.

In the last year since 2007 Corn prices went up 36pc, Rice has risen 75pc, Soymeal 87pc, in many countries bread has gone up 130pc in price, until the marker collapsed again two months ago.

Beef has been a luxury item in wealthy countries for many years, which has been compensated by the advent of processed foods, with the same protein at affordable prices such as burgers hot dogs and kebabs. However in the EU, they are now going to ban the use of mince beef or ground beef as they call it in the USA.

France has been used to high meat prices for many years, consequently they are big users of offal liver, heart, tripe tails head meat and lambs heads.

Robert Zoelick head of the World Bank, believes the current food crisis threatens Global security. However Josette Sheeran, director of the UN World Food Program, concurs with Mr Neilson and said last month “We are seeing a new face of global hunger, we are seeing food on the shelves, yet people are unable to afford it”.

Recently in Australia farmers were complaining that they can buy their own beef cheaper in the supermarkets of the USA and Japan, than they can at home, despite the costs of shipping thousands of miles away and the additional refrigeration and packaging.

In Argentine we consume 69 kilos of beef per person per year, this is a staggering figure compared to the EU where consumption is 17.5 kilos .In Argentina as in France we also have a healthy appetite for offal.

We have seen in recent months India, Vietnam, Egypt and Brazil ban the export of Rice to conserve supplies for the domestic market, In Argentina we have banned export of beef and wheat for the same reasons.

There have been food riots in Egypt, Haiti, Cameroon, Ivory Coast, Bangladesh and Vietnam, water, water everywhere and not a drop to drink, as it’s the price as much as the shortage causing the problem.

Is it a big problem to fix, indeed not, farming has always been feast or famine, ask any farmer in Outback Australia, who has to battle the elements of drought or floods.

In Australia during the late eighties and early nineties at the time of the wool mountain. The Hawke Government were giving farmers 20 cents for each sheep they had. This was the price of a government subsidized 22 bullet, in order to shoot there sheep at the governments cost then dig a hole to bury them. Millions of sheep were disposed of this way and today we have a food shortage.

Which came first the chicken or the egg, without the arable farmer tilling his corn, wheat, barley, maize or soybean we have no basic food for pigs, poultry and cattle, in the majority of countries where they have to be wintered in yards,

Man cannot live on bread alone, our farm animals cannot survive on grass alone only in exceptional countries in the Southern Hemisphere, Argentina, Australia, Brazil and New Zealand. Whilst the framework is still in place in the African countries, politics has got in the way of farm production, until we can find a compromise between colonialism and nationalism .

The whole world situation can be turned around in under two years, this is physically possible if the politicians could see the wood for the trees.

The subsidy system has served the farmers of Europe and the USA well for the last 55 years, whilst the farmers of the Southern Hemisphere have had to battle on and farm every hectare to its best advantage, with no assistance through drought or flood except their tears and blood.

Technorati Tags: famine, food shortage

We’ve been mentioning the food crisis for many months now.  It is the next major crisis facing us, and it’s far beyond the time to start taking it seriously.  If you have made no preparations yes you had better do so now, in whatever way you are able…

Source: Los Angeles Times

In Montebello, nearly 5,000 turned out for a food giveaway, a number that stunned organizers who had tried to keep it a low-key event, targeting publicity to several churches and schools. But word of mouth proved stronger than a few fliers, and crowds inundated Montebello Park. A diverse mix of people stood in a six-hour-long line — families from middle- and working-class communities, including Pico Rivera, Montebello, Norwalk and Whittier. No one left empty-handed, though.

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Technorati Tags: food crisis

Source: Bloomberg.com

The credit crunch is compounding a profit squeeze for farmers that may curb global harvests and worsen a food crisis for developing countries.

Global production of wheat, the most-consumed food crop, may drop 4.4 percent next year, said Dan Basse, president of AgResource Co. in Chicago, who has advised farmers, food companies and investors for 29 years. Harvests of corn and soybeans also are likely to fall, Basse said.

Smaller crops risk reviving prices of farm commodities that sank from records in 2008 after a six-year rally that spurred inflation and sparked riots from Asia to the Caribbean. Futures contracts on the Chicago Board of Trade show wheat will jump 16 percent by the end of 2009, corn will rise 15 percent and soybeans will gain 3 percent.

“The credit situation is worrying even the biggest and best farmers,” said Brian Willot, 36, a former University of Missouri commodity analyst who now grows soybeans on 2,000 acres in Brazil. “For the financially weak, credit has dried up completely. For the strong, credit has been delayed and interest rates are higher.”

The number of hungry around the world is at risk of increasing as the financial crisis cuts investment in agriculture and crops, said Abdolreza Abbassian, secretary of the Intergovernmental Group on Grains at the United Nations Food and Agriculture Organization in Rome. The total increased by 75 million last year to 923 million, the UN estimates.

Brazil Squeeze

“The net effect of the financial crisis may end up being lower planting, lower production,” Abbassian said. “More people will go hungry.”

In Brazil, the world’s third-biggest exporter of corn after the U.S. and Argentina, production may fall more than 20 percent because farmers can’t get loans to buy fertilizer, said Enori Barbieri, a National Corn Producers Association vice president. The nation’s coffee harvest, the world’s largest, may drop 25 percent for the same reason, said Lucio Araujo, commercial director at farmer cooperative Cooxupe, located in Guaxupe.

Borrowing costs increased and farmers struggled to get loans after the worst financial crisis since the Great Depression made banks and grain processors, including Cargill Inc. and Archer Daniels Midland Co., less tolerant of risk.

Minnetonka, Minnesota-based Cargill and Decatur, Illinois- based Archer Daniels, the world’s largest grain processors, are among the crop buyers to halt financing for growers in Brazil, said Eduardo Dahe, who represents the companies as president of the National Association of Fertilizer Distributors.

Lending `Stopped’

Processors usually cover half the financing needs of farmers by accepting part of the future crop as payment. “No one is doing it,” Dahe said. “It’s stopped.”

In Russia, loan rates for farmers have jumped by half in some cases to more than 20 percent in the past few months, Arkady Zlochevsky, president of the Russian Grain Union, said in an interview earlier this month.

While the credit squeeze gripping emerging markets has yet to hurt the U.S., the risk remains, Agriculture Secretary Ed Schafer said Oct. 1.

“We certainly could see tight credit having an effect on agricultural production,” Schafer said in Washington. “The costs of farming operations today are huge, and that backs up to the banks that have balance sheets that are tight, it backs up to elevators that have credit stretched out.”

Farm Incomes

To be sure, farmers in the U.S., the world’s largest grain exporter, may have enough cash to avoid production cuts through next year because of this year’s record profits.

Net farm income will rise 10 percent this year to $95.7 billion, the U.S. Agriculture Department estimated Aug. 28. While farm debt jumped 7.7 percent last year to $211 billion, the total is 9.6 percent of assets, a ratio that the government forecast on Aug. 28 will drop to 8.9 percent this year, the lowest level since at least 1960, the earliest data available.

“I don’t see the crisis” for U.S. farmers, said Corny Gallagher, who helps oversee $20 billion in global agribusiness and food-product loans for Bank of America Corp. in Sacramento, California. “While commodity prices are down from their peak, they are still relatively high.”

Warning signs are appearing.

`Deteriorating’ Conditions

Global inventories of corn, wheat and soybeans before the harvest in the Northern Hemisphere next year will be the second- lowest since 1974, enough for 67 days of consumption, compared with 144 days of supplies in 1986, U.S. data show.

“Stockpiles are going to be extremely tight,” said AgResource’s Basse. “The world cannot afford any dislocation in production next year, or there will be a real shortage.”

The Federal Reserve Bank of Kansas City said Aug. 15 that credit conditions in the second quarter, the most recent data available, “showed signs of deterioration” in the seven-state region that includes Kansas, the biggest U.S. producer of winter wheat. Loan-repayment rates fell for the first time since 2006 as wheat slid 7.6 percent in the quarter. Wheat lost another 41 percent since then.

“This year is going to be the best year ever and now we are looking at the potential to give it all back in 2009 if prices don’t rise above the expected cost of production,” said Mark Kraft, 49, who grows corn and soybeans in Normal, Illinois. “You have to hope that fertilizer, seed and land rents come down and the price of corn improves.”

Lower Prices, Higher Costs

Wheat fell to $5.1625 a bushel on the Chicago Board of Trade on Oct. 24, touching a 16-month low of $4.965. On Feb. 27, it reached a record $13.495. Corn fell 7.5 percent last week and touched a one-year low of $3.64 a bushel today, compared with a peak of $7.9925 on June 27. Soybeans fell 4.4 percent last week to $8.67 a bushel and are down 47 percent from a record $16.3675 on July 3. Rough-rice futures are down 41 percent to $14.685 per 100 pounds from $25.07, the highest ever, on April 24.

One 80,000-kernel bag of Monsanto Co. corn seed, enough for about 2.5 acres, rose 45 percent this year to $320, the same amount Midwest tenant farmers paid to rent an acre of land, Kraft said. A gallon of diesel for tractors averaged $4.47 in the third quarter, up 51 percent from a year earlier, according to AAA, the largest U.S. motorist organization.

The value of the collateral farmers use to secure loans — crops and land — is diminishing. Lenders are demanding more equity for farm loans used to run operations or acquire land and equipment.

“We need two to three times the amount of money we used to need with the same collateral,” said Bo Stone, 37, a seventh- generation farmer in Rowland, North Carolina. “It means we have way more risk than we’ve ever had. This is a time where one bad crop year, with the amount of money and input tied up, could potentially cost you your equipment, land and livelihood.”

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Technorati Tags: Food Crisis