The Price of Wheat
tradingeconomics.com
tradingeconomics.com
In the southern USA there's more winter wheat in the fields than I've seen in the 30 years I've lived here. It looks really happy so far too. They'll be bringing that in starting in another 3mo or so.
But you’re right about planting season. It’s coming up fast and that window will close with no way to rewind if tensions die down.
I wondered about it because I am lucky I suppose to live in an area with a fair amount of local wheat production. During the pandemic I noticed that the locally produced wheat never really disappeared even though it was more expensive to begin with; the bigger brands totally disappeared from the shelves.
I could see this as making a bigger impact though, because it's affecting worldwide stock to a bigger extent, at the more basic level of production rather than supply chains per se. But if the local wheat isn't really going anywhere anyway, maybe it doesn't matter.
Between this and the pandemic it seems like smaller, local production is being rewarded more, at least where I am. Chains struggled but smaller local shops thrived.
This isn't desalinating specifically for irrigation, but it is a source of water for irrigation that wouldn't exist without desalination.
https://www.haaretz.com/israel-news/.premium-study-water-des...
Israel is not self-sufficient though; they import 80% of the grain they consume.
Very trivial to extend the idea to routing water from any of the thousands of lakes in Canada.
Vegas had a plan to do just that (though from Reno). These ideas aren't pursued because water is not scarce enough for them to be economically justified yet. If the time comes, they will do it and likely cheaper than you think.
If renewables eventually take over, we can even repurpose the existing oil pipelines. Likely need to widen them, but much cheaper than land use/zoning legal battles.
There was a plan to pipe water to California from the Pacific north west, and the projected costs for that were insane.
By the time the high price of water justifies projects on this scale, there will be blood in the streets, not water in aqueducts.
Civilization adapts quickly once somebody pokes the bear.
Sure, in theory there's plenty of water on the globe, and it's just a matter of getting it to population centers. In theory all we have to do to avert global warming in the first place is reduce our CO2 emissions. In practice both of those goals are essentially impossible, because it's a coordination problem and coordination problems are significantly harder than technological and economic problems.
Sorry, doomsday abandonment scenario is a complete fantasy, void of any logic.
People talk about colonizing Mars, yet suggest we can't pump water from point A to B
How much is all that central valley land worth with ongoing saltwater intrusion?
Where will you get the gigawatts needed to run all the water pumps? New hydro dams?
You are throwing out a solution as if it's easy and feasible. It is certainly not easy, and feasibility , well... We shall see.
Settlement patterns grow up water availability. There's a reason India and eastern China are densely populated while the Sahara has virtually nobody. The U.S. Southwest (LA, Vegas, Phoenix, and smaller cities in SoCal/AZ/UT/NV/NM) urbanized when we developed the technology to dam & control the Colorado River.
In 100 years, it's likely they'll be thriving communities in the Sahara, Canadian Shield, Siberia, etc. to make up for the increasing inhabitability of Northern Europe, the U.S. South & Southwest, Indian subcontinent, Middle East, etc. But that's cold comfort for the people who already live in the affected regions, who will have to migrate, die, or spend most of their resources on water infrastructure.
I'm an omnivore, and use tofu for meals on occasion. On my trip to the Asian market yesterday (cheapest price around), tofu was 50% higher than what I paid last trip two or three months ago (was $1.39 for House Foods 10oz - a common brand around here, now $1.99). Nothing's safe.
In times of famine, prices have of course been higher. Just for fun, the rider of the black horse in the book of revelations prices a quart of wheat at one denarius (a typical days wage at the time). If you go by the 4.4g silver content of the coin, that comes out to $3.64 per quart or $135/bu.
https://ocj.com/2022/03/ukraine-russia-and-crop-production/
Agricultural economists as a discipline deal with these and other policy/trade issues all the time. At agricultural colleges and universities, they provide farmers with insights so the right crops are grown in the right time and place at the right level. No political or financial agenda worthy of note. If you’re in the US and care enough, you might want to contact your local land grant school and talk to an ag economist who specializes in grain production about these concerns, or sponsor an on-line forum with them for others who are interested.
If I remember correctly, most wheat in Ukraine/Russia is/has been planted in the fall/winter for summer harvest. But active regional conflict right next to your breadbasket generally sounds like a dumb and dangerous idea to pursue. You can’t harvest if your harvesting equipment is disabled. You can’t get the grain to market if your transportation systems are disrupted. Seems silly. Slavs may need to gen up some culturally appropriate recipes using maize and soybeans.
[1] https://uk.finance.yahoo.com/news/hungary-ban-grain-exports-...
[2] https://www.wthitv.com/news/global-nitrogen-fertilizer-short...
But they are also huge markets where most buyer/sellers actually intend to use the product. On top of that, global inflation was already pushing up price of most commodities (excess goods spending due to govt stimulus, among other things, such as substitution).
Oil is a much more dire situation, as demand is increasing faster than structural supply. Higher oil does push people towards renewables, but at large cost to the poor. Also acts as multiplier to pretty much all other goods production.
It's not just the supply shock, but everyone expecting rough conditions this year before the war started. Primed with those conditions and a commodity where not having any means millions/billions of people starve, it's easy to see how supply concerns can set off some very sharp movements. Energy and food inflation like this has a history of setting off events like the Arab Spring; it's a very inelastic market and governments don't have the option of not paying.
I'm no commodities expert though.
Here's an article on effects in Egypt: https://mei.edu/publications/russia-ukraine-war-has-turned-e...
The WSB-types generally do not touch futures contract because the margin requirements can be quite high (a single contract is generally tens of thousands of dollars).
Much of this is also fundamentals. ESG = energy stops growing and as the West continued down its self-destructive energy policies, an energy crisis was basically guaranteed. Recall that energy prices in Europe were at all time highs already. The US has largely been saved thanks to the previous POTUS who prioritized energy independence. Even if the current US Administration threw that away, they haven't been in power long enough to completely sabotage their own energy production.
Where it is now a supply crunch is in agriculture. You have one of the largest producers of wheat, fertilizer components, and a couple of other things; invading another of the largest producers of wheat, fertilizer components, and a couple of other things.
Add to this a backdrop of woke politics and cancel culture spreading into diplomacy and you have the West self-destructing itself over what would - in normal times - be a regional issue at best.
TL:DR we're in trouble. And that's before even talking about how the West has weaponized finance and now fundamentally changed the rules by which globalization worked. That's going to have some really nefarious effects a la 2008 GFC, but much worst.
Jokes aside, I honestly think that the modern Western diet would benefit a lot from some diversification on what cereals we eat. We eat way too much wheat nowadays. For instance, I like in Italy and we import most of our wheat, while we produce large amounts of rice, exporting more than 50% of it. People in Northern Italy have always eaten bread, but they ate way less pasta and way more rice and cornmeal in the past. Since the 1950s pasta has become incredibly ubiquitous and people have lost knowledge and the taste for rice dishes - lots of boomers I know don't even have rice in their homes.
Wait...
welcome to end of 'end of history.'
Covid-19 was the first one, it was literally “given a crown”.
The last one to be nuclear winter.
What do you think would happen to Putins daughters in London, to the family members of oligarchs, to anyone who carries the smell (shame) of a past support of that regime. Even enemies of the West will think twice and have no choice supporting the force that is stronger. (whether that's good or bad or if they like it or not)
anyway nobody knows anything about any of this even the ones who are supposed to be experts in it. so certainly don't take my word for it but do question it when they make it clean cut.
[1] assume RU does launch nukes without sabotage on their systems before, and 1 or 2 cities will be lost to nuclear holocaust. There will be immediate containment of many of the missiles not fulfilling their objective. This is a lot messier than the academic idea of a neat escalation scenario that ends in total annihilation of the human race including a nuclear winter.
I think he does not give a fig about anyone anymore
He had this absurd premise that because the Soviet Union collapsed and free trade was surging every place everywhere would coalesce to a boring democracy.
> "Now this is not the end of end of history. It is not even the beginning of the end of end of history. But it is, perhaps, the end of the end of the beginning."
Kind of like gas prices during/after invasion of Iraq? Despite local production availability, it was an opportunistic hike.
What's weird though is I noticed a price spike and then sudden unavailability of many wheat products just after New Years.
Why not? If everything normalized tomorrow, what would stop Russia and Ukraine from resuming wheat shipments?
The effects of war are not magically undone when the war ends.
If the war ended today, it would take Ukraine decades to recover. Pictures like these do not show the people whose lives have been shattered or lost:
https://news.sky.com/story/ukraine-invasion-before-and-after...
Similarly, the sanctions on Russia are only a symbol of the loss of trust and willingness to cooperate that many people throughout the world feel. How many years or decades will it take to build back that trust?
Everything in the linked story claims that wheat shortages are due to short-term disruption, not productive capacity having been destroyed.
> How many years or decades will it take to build back that trust?
That’s irrelevant to the discussion. You don’t need to trust someone in order to buy wheat from them. The actual sanctions are what matter, not whatever they “symbolize”. And there’s no reason to believe the sanctions would last for years or decades if Putin were deposed and Russia’s aggressive actions stopped.
Wheat fields don't harvest themselves. Wheat can't drive itself to ports and load itself on ships. It requires people and infrastructure. The war has disrupted those people and the country's infrastructure. It does not magically return when the war ends.
>> You don’t need to trust someone in order to buy wheat from them.
Yes, but when given the choice many people choose not to do business with murderous criminal thugs. If someone killed your family members or friends would you buy grain from them? Or would you pay more and buy grain from someone else?
>> And there’s no reason to believe the sanctions would last for years or decades if Putin were deposed and Russia’s aggressive actions stopped.
Who knows? That has not happened yet.
As I said above, when given the choice many people choose not to do business with murderous criminal thugs.
If someone killed your family members or friends would you buy grain from them? Or would you pay more and buy grain from someone else?
They may have to invent a new currency, but this would be what, the fourth Russian currency in modern times? Nothing new.
The only people who worship Putin are a vocal, dangerous, and violent minority that are about to find themselves persona non grata in their own homeland.
Next to the deaths in Ukraine, we might thank Putin for 100 million plus deaths by famine within the 3 years.
The only real solution i see is to stop feeding the animals with stuff humans could eat and make a point of global solidarity. I say this as a avid meat eater, but I'm not holding my breath.
Do they want to see the whole world destabilized by a famine?
This is ridiculous.
Filter to 'All'
Those tops between 2010 and 2013 is the 'Arab Spring'.
Now you know what is coming.
I mentioned that eight days ago, it was a sure thing ten days ago. The moment they crossed the border.
https://news.ycombinator.com/item?id=30457490&goto=item%3Fid...
Oh, and it was talked about for months. It's that Ukraine Breadbasket thing.
We Germans had a tour back then, just for that. It's not widely known, but we sometimes even stole the pure soil literally, Chernozem.
History and geostrategics, quite interesting.
Uh, by the way, the Ukrainians had a land reform last year.
As a primer:
https://www.oaklandinstitute.org/blog/who-really-benefits-cr...
----------------------------------------------------------
And now to something completely different, the Serbians and the Balkan...
I don't know for sure who is funding all these "nationalistic" organisations around these parts but I do know nationalism is more often than not used as a tool to divide people, not unite them.
These people seem to "care" and "love" their countries to the extent of beating and harassing brown people. Sorry, got carried away
Some people think it's the best. At the moment the strongest proponents of this line of thought sit in the Kreml. It's just a question of who it's best for. And they don't care if you want it or not.
The Republika Srpska cultivates close ties to their Russian brother, nurtures strong ethnic/nationalist ambitions and is a possible attack vector for Russian PsyOps to stirr things up. Don't you think a possible Civil War or some such in the Federation of Bosnia and Herzegovina would come in handy? For Russia and the Republika Srpska?
Oh, and please don't shoot the messenger, I'm just looking for an exit.
By, the way that Balkan thing is much older. In 1888 Bismarck is quoted as saying "One day the great European War will come out of some damned foolish thing in the Balkans."
He was right.
I think the recent situation around Ukraine actually diminishes the possibility of turmoil in B&H because Western powers are now more eager to use the Office of the High Representative to remove from power anyone who works against peace in B&H.
https://www.govinfo.gov/content/pkg/CHRG-115shrg28945/html/C...
https://www.jstor.org/stable/resrep18769?seq=4#metadata_info...
https://www.fpri.org/article/2018/03/bosnia-russian-chopping...
https://www.spiegel.de/international/europe/the-fragile-stat...
https://www.balcanicaucaso.org/eng/Areas/Balkans/War-in-Ukra...
https://balkaninsight.com/2022/03/01/serbian-far-right-group...
https://balkaninsight.com/2021/11/23/experts-urge-improved-a...
In short, Russia and the current Republika Srpska leadership has incentives to keep the situation simmering but they don't have the means to heat the situation to the point of boiling.
The OHR can at any time remove from power any politician who would try that. NATO and EUFOR forces stationed in the country could easily quell any conflict. Even without relying Bosnia's internal security forces and neighbours that also have an interest in peace in B&H.
Apparently, the Russians even need external experts for their war crimes, as they recruit war-experienced Syrians as mercenaries. I assume that the Serbian experts in this field will work for Mother Russia for free. This will probably relieve B&H from that pest, temporarily. Until those fighters return. Of course, If they do. Wouldn't mind to see them die there.
But it hints at that there is potential for groups and/or nations (I assume Russia wouldn't be the only one) to mess up peoples minds.
Not long ago a journalist ended up in the "internet communication team" of a french presidential candidate (Zemmour) and saw how much shitty tricks they're trying to influence people (editing wikipedia, flooding articles online to give a better image)
Yes it will, as crops have a growing season. If it gets missed there is simply less wheat for everyone in the world for roughly a full year until the following growing season.