# The price of wheat, and food in general



## oregonyeti (Jun 16, 2007)

Probably most of us, in different parts of the world, have seen a substantial increase in the price of food in general in the past year or so. From my understanding it's partly due to the high price of oil (affecting fertilizer cost, transport cost and processing cost), and partly due to a coincidence of weather not cooperating in some major food growing parts of the world. There's also a higher demand for meat in rapidly developing big countries such as China and India, which is in the end less protein-efficient food considering what the animals are fed vs the meat produced, and so takes up more grain, one factor reducing availability.

As far as USA policies, in my opinion, having corn crops subsidized for ethanol production is not that great an idea. It gives farmers less incentive to grow wheat, soybeans and other crops and drives up the cost of those crops. On a question of ethics, some of the world sees it as a waste of a food crop as some of the world is hungry, but yet we're also reducing our dependence on oil by doing that.

I hope this won't turn into a political argument as it might at some sites (if anybody even notices my post ). What do you all think?


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## oregonyeti (Jun 16, 2007)

I probably should have put this in the late night cafe forum . . .


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## anneke (Jan 5, 2001)

Yup. Done.


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## foodpump (Oct 10, 2005)

On this side of the border (Vancouver) price of flour has gone by almost $10 a bag. Canada had a reputation for growing a lot of wheat, but it`s not grown as much as it used to be, and the reason for this is is the Canadian Wheat Board. This institution is loathed and hated by just about every farmer in Canada, as THEY set the price for wheat, and only THEY can sell wheat. Don`t believe me (question mark) There are one or two farmers rotting in jail because they tried to sell a few truck loads of wheat over the border. Dead serious.


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## free rider (May 23, 2006)

I'm an economist. I saw a problem with our food system some years ago and have been expecting this increase in price. It's not just oil (and you're right about the ethanol thing not being a good idea... takes limited land away from food production and it uses oil in its production).

Part of our trouble is that the US is importing food as we've built subdivisions over farms. This is something relatively new in comparison to a few decades ago. Why is this important? Weak dollar. We have a weak dollar right now as we try to pump money into the system to save the banks from real estate troubles. When our dollar is weak against foreign currencies, including the Mexican peso, our imports become much more expensive. We're importing our food, so it's much more expensive.


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## dc sunshine (Feb 26, 2007)

I heard a radio show yesterday here about spiralling food costs. One commentator said there's been a big swing in food choices amongst the middle classes in China and India, therefor upsetting the normal "balance". With that, and transportation costs sky-rocketing, its no wonder.


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## cat man (May 7, 2007)

The areable land issue is defitely a big one.
Farmers, Cattle Ranchers et al could sell there land for far more than they could earn growing a crop, or raising cattle or whatever.

The current real estate market should mitigate this for a while though


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## free rider (May 23, 2006)

And this commentator's qualifications are?


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## free rider (May 23, 2006)

Hope so. The bubble pushed as far in the wrong direction.

Btw, please don't concentrate on transportation being the issue. Oil is used to make plastic. Milk is delivered in plastic containers that are stacked in plastic crates. Oil is used in much, much more than transportation.


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## cat man (May 7, 2007)

I'm not so sure the commentators qualifications are relevant.
It is common knowledge in the food production circles that Asia is consuming much more middle class type ingredients than in the past.

The Euro is killing us as well, which in part, has caused seafood prices to rise substantially.


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## free rider (May 23, 2006)

I look at the data all the time and I see nothing like that for Asia. So how is it common knowledge? That's my worry. So many things that are considered common knowledge are actually wrong. That's why I'm curious about the qualifications of the person.

The Euro = problem with the weak dollar. The dollar is so weak that we're even losing against the Mexican peso. Forget the Euro... awful against that. Problem is with the dollar.


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## cat man (May 7, 2007)

The strong Euro vs the weak US dollar means they have a 50% discount on things that we like to buy domestically. Scallops, Lobster, Tuna to name a few. It also dramatically raises our prices for EU imports like Italian Cheeses, EVOO, Danish Pork etc.

I'm not sure what data you're looking at, but I wasn't referring to US exports, I was referring to Asian produced products being consumed in Asia that historically have been exported. The more they consume at home, the less available for us to import.

http://www.st.nmfs.noaa.gov/st1/trad.../TRADE2006.pdf

Seafood imports rised 5% 2006 vs 2005 BUT the cost of these imports rised 10%. This is caused by the US consumer having to essentially 'outbid' the Asian domestic markets.


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## oregonyeti (Jun 16, 2007)

Regarding meat consumption in China, here's a paper from the International Food Policy Research Institute:

http://www.ifpri.org/divs/mtid/dp/papers/dp21.pdf


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## free rider (May 23, 2006)

That's what I was talking about. I've been researching food for more than ten years and that common knowledge about Asia is simply urban legend from what I've seen.

Yeti, the paper you posted was based on a simulation, not reality.


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## oregonyeti (Jun 16, 2007)

Free Rider, I'm glad you brought that up. I'll have that question now rather than taking it as fact.


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## dc sunshine (Feb 26, 2007)

Free Rider - I only tuned into the radio for a short drive in the car - I actually have no idea what the commentator's credential's are. But given that it was on the highly respected government funded national station - I can only trust that they had a reputable, well researched and educated commentator.

It is not due, obviously, to one or two causes alone. But you can't deny the fact of sky-rocketing transportation costs as being part of the equation. I know I never fill the tank in my car anymore - $20 at a time and I try and limit trips out.


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## peachcreek (Sep 21, 2001)

I was talking to someone in the milling business and she attributed the high wheat prices on spiraling transportation costs and last years' poor winter wheat crop that was below average in yield and quality.


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## free rider (May 23, 2006)

Sorry for being so cynical about the subject, DC. I'm quoted in the press very often... or should I say misquoted. I can't remember a time when the media got it right. Soundbites are awful too. They edit the radio and tv interviews with amazing technology. When I give interviews, I have to consiously run my words together in certain places so that they can't edit what I've said to fit their needs rather than what I've said. Quite often, I am pressured to say what they want me to say. They'll outright ask me to even though I've said they're wrong. Years of this have made me question everything.


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## dc sunshine (Feb 26, 2007)

No probs Free Rider. Geez, I never realised working with the press could be that hard. Must get extremely frustrating. 
Cheers, DC


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## free rider (May 23, 2006)

Now we're completely off-topic, but you've reminded me of a time when I used to have a television set. It was the day that Saddam Hussein was captured. I was flipping through the channels and each and everyone was on the Saddam story. 

The Univision guy, however, hadn't made it down to the area where the rest of the reporters were. He was still up in his hotel room. I guess they cheaped out on his equipment too because the zoom wasn't quite long enough to get him down into the crowd anyway.

That gave a unique perspective. His angle was wide enough that you could see about 10 to 15 people surrounded by a huge group of reporters and photographers. Beyond that, nothing. Not for a long, long way round them were there any more Iraqis. Just 10 to 15 of them and then the ring of reporters and then nothing.

The reporters were obviously giving directions to the Iraqis. They would motion for them to jump up and down and they would jump up and down. On the channels other than Univision, it looked like there was a throng of people and that is how it was being reported. 

Then, the ring of reporters threw something into the crowd. Candy, money, I don't know. The Iraqis jumped for it and stuffed it into their pockets.

Then, the ring of reporters directed the Iraqis (same 10 to 15 people) over to the road. One of the photographers stopped a car and paid him something. Then he directed the Iraqis over and they all climbed on the car. They were directed to wave their arms about. They did. This happened with a few cars.

Then the reporters threw something to the 10-15 Iraqis and, once again, they stuffed it into their pockets. 

If only I had a VCR. You have to laugh or else you'll cry. I gave away my tv set and became a cynic.

I should add that there are some very good journalists out there.


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## dc sunshine (Feb 26, 2007)

Hmmm...food for thought - with a nasty aftertaste. Makes you wonder if in any given situation, is the presence of cameras incendiary to that situation, compared to if there weren't - say if you could see it from a fly on the walls viewpoint. I imagine in some cases it is.

But that behaviour by those reporters is abominable. Praise be to the good journos out there, the barrel is getting spoilt by some bad apples.

Getting back on topic (kind of) - there's nothing surer than death and taxes, and the price of eggs will always rise


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## ninja_59 (May 2, 2004)

Heres is a map of wold food prices:

Just click on continue to obtain the map:
CBC News Interactive: Global Food Prices


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