Good news on the food front

As you might know from reading past
issues of Population News, agricultural production in the United States
and the world has fallen over the past few years, leading some groups
such as WorldWatch Institute to predict we are finally at the beginning
of the end of cheap, abundant food. Critics like myself, however, contend
that such oscillations are temporary and an inherent part of agricultural
markets which correct themselves.

New forecasts by the United States
Department of Agriculture sheds yet more light on the debate, and the
results aren’t good for the gloom-and-doom crowd.

A few weeks ago the USDA announced
that the U.S. soybean crop would set a record, forecasting 1.525 billion
bushels of soybeans would be produced with record exports of 2.9 billion
pounds of soy oil and near-record levels of 7.9 million short tons of
soy meal exported in the coming year.

Now the USDA reports that American
farmers are planting a record 80.8 million acres of corn — the most since
1985 — but only 67 million acres of wheat, the lowest since 1988. The
USDA expects that overall US wheat and corn exports will decline as worldwide
demand for US agricultural exports decline and consequently prices for
wheat, corn and soybeans should decline by 20 to 90 cents a bushel from
last year’s crop.

What exactly is going on here?
Well, don’t you know, it turns out people do respond to market prices
after all. Following the relatively low levels of world production of
corn and soybean the past few years, farmers around the world have apparently
switched large amounts of land to growing corn and soybean. South American
exports of soybean and corn are expected to be a major source cutting
into US exports.

Contrary to a WorldWatch report
that grain prices were headed inevitably up, in fact the opposite has
happened. The cost of a bushel of wheat on the Chicago Board of Trade
recently fell to $2.9850,a 4-1/2 year low. A bushel of corn was up slightly
to $2.4950. Hardly the agricultural disaster predicted by WorldWatch.

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