A Hungry Man Is An Angry Man – Wheat and Corn

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There is a drought covering the most land expanse in America since 1956 that even Paul Krugman found reason to write about last weekend. http://krugman.blogs.nytimes.com/2012/07/20/the-burning-land/?smid=tw-NytimesKrugman&seid=auto

23-Jul-12 The Economist American farmland is parched. Already there is speculation that the economic losses will reach billions of dollars

And photos.

22-Jul-12 Business Insider Heartbreaking Photos Show How The Drought Is Devastating Farmers In The Midwest 

Perhaps the markets rather not acknowledge this as a problem yet European headlines continues to dominate because greedy hedge funds can’t give Spain and Greece a break ?

Well, Europe may be saved for the moment.

I did some digging on Bloomberg for commodity production and exports for 2012-2013. This is what I got for the producers.

WHEAT CORN
UNITED STATES                             32,659                                          40,642
CANADA                             18,500
AUSTRALIA                             20,500
KAZAKHSTAN                              7,000
BRAZIL                                          12,000
ARGENTINA                                          16,000

And here are the biggest consumers.

WHEAT CORN
JAPAN                              5,900                                          15,500
INDONESIA                              6,600
PHILIPPINES                              3,200
S KOREA                              4,400                                            8,000
MIDDLE EAST                             25,180                                          15,700
BRAZIL                              6,700

Michael Pollan mentioned in his book Omnivore’s Dilemma that if humans could consume fossil fuels, it would be far more environmentally friendly than growing that kernel of corn.

And aren’t the Japanese lucky that the European crisis has given enough ammunition in their JPY  strength to pay for that corn ? And for the rest of the world, perhaps that little spike in inflation will be a welcome relief, along with the realisation that we cant digest that paper our money is printed on ?

Category : Market, Op-Eds