Even Pharoahs Knew to Prepare for 7-Year Food Shortages

HOLLY NOTE: We have posted articles continuously for the past year detailing depletion of US and global grain reserves to record lows, grain thefts in Kansas, food shortages, rising food prices and resulting food riots, in hopes that you are getting this message: As tough as it might be right now, this is definitely the time to purchase significant food stocks. If you have missed any of these articles, please check the Food & Water ARKives for 2008 and 2007. This issue is too vital for you not to get the entire picture. The Midwest is at the heart of our wheat and corn production. All it takes is one bad drought or major flood to ruin crops. This year, we had it all. For 9 months now, North Dakota has experienced the worst drought ever. Evidence grows of global drought. Drought has hit Australia's food belt – one of the world's top four food producers. The Middle East has also suffered tremendous drought. For example, Turkey lost HALF of its crops to drought and it's devastated Iraq's wheat. China lost $6 billion in crops due to the earthquake. While you may not personally care about Turkey or Iraq or China, global food supplies still have to stretch to feed everyone and our food supplies continue to take serious hits. Extreme flooding like the Midwest saw March-June including along the Mississippi wiped out food crops. Millions of acres of crops were lost. More than 1,000,000 bushels of soy, corn and wheat evaporated when grain elevators burned, exploded, collapsed, or were flooded in storms. Daily news address rampant concerns over rice, wheat, corn and soybean shortages. And now food rationing and hoarding is creeping into reality... There's good reason – we have no surplus. Zip. Grain reserves are non-existent. It's not enough that a huge portion of our grains goes to biofuel, tenuous crops are further impacted by a higher global demand for wheat-based foods on dinner tables. If drought, as addressed above, hit's America's read basket our remaining crops will be in deep weeds. Stock up now - buy in bulk - and pack for long-term storage any grain products and foods you regularly consume. It's easy, it's great insurance and will save you loads of money in the long run. The longer you delay, prices are only going to escalate, your options will dwindle, along with selection. Please do this before your options close. When reading news articles, it is our hope you'll read beyond the headlines and hear the unspoken message - a quiet urging to prepare.

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July 17, 2008
Des Moines Register - Des Moines, IA

It has been proven again and again that an appropriate supply of basic commodities such as corn and soybeans, whose annual yields depend upon weather and factors beyond human control, cannot be taken for granted.

These wide, harmful fluctuations in both yields and prices have historically run in five- to seven-year cycles. With weather patterns changing, they could become more severe. Ample supplies in one year will change to shortages in another year. They always have and always will. Even the pharaohs of Egypt knew and prepared for that.

Without some organized planning and program to help hundreds of thousands of individual independent producers coordinate and moderate the fluctuation in marketable supplies, wide swings in prices and supplies adversely affect grain producers, livestock producers who feed the grain, processors, transporters, our overseas customers, retailers and consumers.

We now add an ethanol industry that competes with other energy sources. Therefore, consumers of gasoline and diesel fuel are also being adversely affected by these wide fluctuations.

From 1977 through 1995, the Farmer-Owned Grain Reserve helped stabilize grain markets. When there was a burdensome surplus due to unusually good growing years without enough customers to keep the price above the loan level, the farmer-owned reserve would pay the storage on enough supply to keep the market price above the loan rate. When supplies increased enough to increase the price to more than 50 percent above the loan rate, that stored surplus was released.

The producers who stored the grain gained income, livestock producers gained from more stable prices for grain, which results in more stable prices for marketed livestock, processors gained from more stable supplies, and our overseas customers and domestic customers benefited over the period of the cycle.

In 1996, Congress passed the Freedom to Farm Act, which abolished the farmer-owned reserve and substituted several subsidy programs. Most organizations claiming to represent producers, processors and even grain merchants (including co-ops and private elevators) sat idly by or approved the change.

In two cycles since 1996, there have been such wide fluctuations in the supply of basic commodities such as corn and soybeans that producers sold corn for as little as $1.45, which was far less than the cost of production. Under the subsidy programs in effect since 1996, subsidies and loan-deficiency payments have cost taxpayers more than $20 billion just for corn and soybeans.

Also, twice since 1996, livestock producers, processors, our overseas customers and consumers of the end products have paid and are paying the price for a shortage that could have been moderated. Also, those farmers who would have stored enough surplus to keep the price above the loan rates have missed the opportunity to gain from holding the surplus in the now-abolished reserve program.

In this last cycle, only three years ago, the government paid out more than $10 billion of taxpayers' money in loan-deficiency and subsidy payments, which would not have been necessary had only 400 million bushels of corn been isolated from the market. That would have kept the market price above the loan rate, and farmers would have received that income from the marketplace instead of from the government. Some of that corn was dumped overseas at prices well below our cost and in violation of our World Trade Organization agreement. Also, some of it encouraged a livestock-feeding buildup that is hurting livestock feeders.

With corn now $7 per bushel and in short supply, ethanol plants are adversely affected and either cutting back production or on hold. This makes investors in those plants and gasoline and diesel users also big losers from abolishing the reserve program. It certainly also discouraged an expansion that would be so beneficial to Iowa.

With this clear history going back decades and now made so clear again, will those organizations that claim to represent farmers, processors, merchants and end users finally wake up and support re-establishing a workable reserve program?

http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20080717/OPINION01/807170345/1036/Opinion