Wheat Supplies, Already Tight, May Be Hurt by Global Drought

HOLLY NOTE: We have posted articles continuously for the past several months 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. Consider taking Pres. Bush's $800/person rebate and invest it in food storage instead of blowing it.

When reading news articles, it is our hope you'll read beyond the headlines and hear the unspoken message - a quiet urging to prepare.

The Midwest is at the heart of our wheat and corn production. All it will take is one bad drought - which Iowa expects - and now possibly a global drought - our food supplies will take a serious hit. Should gas prices continue to escalate, there will come a point when truckers are unable to make a living and simply have to shut down. This, too, will make ALL food prices jump to due scarcity. Shortages are already showing up in certain parts of the country and around the world. Check this email:

I wanted to write and let you know about my shopping experience today. I live near Hickory, NC, a city of 37,000. My home burned in October and I am literally having to start over from scratch. I have been back online for only a few weeks but heard you urging folks to get food NOW. I decided to take the day off and do just that. WOW, was I shocked. I used to go buy in bulk at Aldi with no problem. Today, I had a hard time finding enough of the items I wanted. Some items were not in stock at all. I almost took every can in the store of certain soups and fruits. Then went to another grocery store to stock up on green beans and corn. Same story, I just about took every can on the shelves. It wasn't that I bought so very much, it was that there was so very little stock on the shelves. It reminded me of hearing you say, "There will come a day when a person will have money to buy the items, but there will be none to buy." I hope people will hear this and "WAKE UP." This is very serious!


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.

Procrastination is our favorite form of self-sabotage. — Alyce P. Cornyn-Selby, American author

March 4, 2008
By Tony C. Dreibus

March 4 (Bloomberg) -- Global wheat production, after failing to keep pace with demand the past three years, may be hurt again in 2008 by dry weather in the U.S., Canada and Russia, the three largest exporters of the grain.

Image: This map shows the number of people under the worst drought possible during the last month. Notice how much of the world's agricultural areas are suffering extraordinary dryness. This does not bode well for Spring and Summer crops. HOLLY NOTE: Remember that drought is a relative term. Drought is based on what is normal for a particular area. If rainfall is less and in this case - very much less - than normal determines whether or not the term "drought" applies. Even though the Midwest has seen a lot of snow this Winter, it is not enough to mitigate the underlying dryness. (Global Drought Monitor)

A moderate drought in the southern Great Plains, where most U.S. winter wheat is grown, has slowed development of plants starting to emerge from dormancy, the Canadian Wheat Board said today in a report. Russian crops need rain and soil moisture in the Canadian Prairies is "poor'' for crops that will be planted in May, according to the CWB, Canada's biggest wheat marketer.

Wheat futures on the Chicago Board of Trade, the world's largest agricultural exchange, have more than doubled in the past year and reached records on Feb. 27. Global production has failed to keep pace with demand in seven of the past eight years, eroding inventories to a 30-year low, U.S. Department of Agriculture data show.

"Certainly there are some concerns in the southwestern U.S. plains regarding dryness,'' said Mike Palmerino, a senior agriculture meteorologist at Woburn, Massachusetts-based Meteorlogix LLC. Because world supplies are so low, "anything that is potentially a problem is of concern,'' he said.

Chicago wheat futures have rallied in the past year after the 2007 U.S. crop was damaged by an April freeze that was followed by excessive rainfall. Prices set records six times this year in Chicago, and reached the highest ever on the Kansas City Board of Trade and the Minneapolis Grain Exchange.


World inventories are expected to fall to 109.7 million metric tons by the end of the marketing year on May 31, the lowest since 1978, the USDA said on Feb. 8. U.S. stockpiles may fall to 272 million bushels, or 7.4 million tons, by the end of May, the lowest in 60 years, the government said.

In the U.S., the world's top wheat exporter, the Texas and Oklahoma panhandles and western Kansas remained dry, the CWB said today on its Web site. That's fueled speculation about low soil-moisture levels for grain that's starting growing after lying dormant since November, the board said.

Precipitation is needed "very soon'' for plants in the region, the CWB said.

About 42 percent of the Kansas crop was in good or excellent condition as of Feb. 28, compared with 64 percent a year earlier, the U.S. government said yesterday in a report. In Oklahoma, about 44 percent earned top ratings versus 58 percent in 2007, the USDA said. The Texas crop was 10 percent good or excellent, down from 42 percent last year, USDA data show.


"If you get into mid-March, they have to start seeing rain or there'll be speculation that the dryness will damage the crop,'' said Jamey Kohake, a broker at Paragon Investments in Silver Lake, Kansas. "Down in the Texas panhandle you get into some extreme dryness. It gets a littler drier the further south you go. It could hurt crops longer term.''

Parts of western Kansas, the Oklahoma Panhandle and West Texas have received as little as 5 percent of normal moisture in the past 30 days, National Weather Service data show. The U.S. Drought Monitor shows parts of the region are in a moderate drought.

Growers in the southern Plains grow mostly high-protein hard-red winter wheat, used to make staple foods including bread and pasta. Demand for the grain has increased in the past year because of concerns global growers wouldn't produce enough.

A storm last weekend dropped rain and snow on parts of Kansas, helping crops in the central and eastern part of the state but missing the western counties, leaving them dry, Meteorlogix said in a report today. No significant precipitation is expected in the region for the next five days, the forecaster said.


In Russia, the second-largest wheat exporter, temperatures were also well above normal and mostly dry, the Canadian Wheat Board said.

"Precipitation is needed to give the crop a boost after several weeks of above-normal temperatures,'' the CWB said. "Crops will now be actively growing in the south, increasing the need for precipitation.''

In the southern Canadian Prairies, temperatures were 1 degree to 5 degrees Celsius above normal last week, the CWB said.

Precipitation also is needed in Ukraine, Kazakhstan and China, where warm, dry weather may hurt crops, the CWB said.


Australia, which has suffered from extreme drought the past two years, has received light to moderate rains in some areas while others have remained dry. Meteorologist Palmerino said growing areas in that country may again suffer a lack of moisture as temperatures in the Pacific Ocean have warmed recently.

Temperatures were about 1.8 degrees Celsius below normal in October and are now about 0.3 degrees below normal, indicating an El Nino system may be developing, which usually brings warm, dry weather to western Australia, Palmerino said.

"If this trend toward warming temperatures continues, one thing we can't totally rule out is the development of El Nino conditions as we move into the latter part of the spring and summer,'' Palmerino said. "That would be of concern if we start to tilt sea temperatures in that direction.''

To contact the reporter on this story: Tony C. Dreibus in Chicago at Tdreibus@bloomberg.net.