Thursday, February 28, 2008

Let Them Eat Cake

Bad weather last season. The wheat crop in Europe came in below expectations. Drought in Australia and New Zealand put a crimp in grain production. Poor harvests in Russia and Argentina, coupled with limited stocks in storage, resulted in a decrease in exports. Russia and Argentina will keep their wheat for their own people, thank you very much, so go look elsewhere.

Prices are going up, as anyone who buys carbs is aware. Price hikes lead to inflation, and countries who export grain are keeping it at home, to keep local prices down and hedge against inflation that leads to price hikes which lead to revolutionary tendencies. Just ask King Louis and his lovely missus, Marie Antoinette.

People want to eat wheat, carbaphobics excepted. Low supply, high demand, and there goes the price curve. But if exporters won't sell at any price, where does a nation go to get its daily bread?

The wheat market in Chicago was a wild ride yesterday. Given the capitalistic system, it's easy to buy wheat in America as long as you're willing to meet the price. Americans will watch their amber waves of grain shipped overseas, and then head to the bakery to pay even more for a hamburger bun, but that's the nature of a free market.

Farmers will make a bit more per bushel, the middlemen will rake in the cash, and only the wealthy will be able to afford a loaf. At least hair powdering isn't figuring into the mix, to elevate the price of grain into the stratosphere.

We're heading back to the good old days, when the ancestors lived on spuds and buttermilk because it was all they could afford, while ships left Irish harbours loaded with grain for the export market.

This no carb diet business is starting to sound like a good idea.....except that the price of corn is running off the charts and meat protein comes from corn-fed creatures.

It's been suggested that higher grain prices will encourage farmers to plant more and the increased supply will yield lower prices next year. Unless we really are headed into another Ice Age and grain-growing weather doesn't come through. Marie Antoinette was a victim of that exact sort of foul weather.

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