The breadbasket of the world

[Murphy Siding]

     Discussion on the $170 a barrel oil thread made me stop and think about grain for a minute.  I live in farm country, where there have always been bumper stickers that read "Let's trade them a bushel of corn for a barrel of oil".  Sadly, we may someday be trading a bushel of corn for a gallon of gas.

     When I was in school, in the late 60's and 70's, we were always taught that we (North America) were the breadbasket of the world.  Our productive farmers were feeding far more than just our own corner of the world.  Is that still true today?  We hear a lot about the growing economies (and populations) of China, India, Africa, etc...  Does that translate to better times for our farmers, railroads, and ports?

[bobwilcox]

The USDA says we produced 33% of the world's coarse grains in crop year 2007/2008 followed by China, the EU and Brazil.  They say we produced 9% of the wheat with the top producers being the EU, China and India.  We produced only 1% of the world's rice.  China, India and Indonesia are the top producers.  We are important but no one, over time, is irreplaceable.  The South thought King Cotton would force England and France to recognize the Confederacy.  Instead the English learned to feed their textile mills with cotton from new plantations in Egypt. 

On the whole I think Globalization has been positive for North American railroads.  I am still dazzled by a tour of the PHL last January.  I think we have more to gain than to lose as we trade manufacturing jobs for jobs at Microsoft, Apple, Google, UPS, Fed Ex, Wells Fargo, New York Life, Charles Schwab, e-Bay, etc.  We are real good at inventing new stuff.

However, IMHO, we need to insure two things.  The businesses we invent need to have fair access to China, India, etc.  I think our banks and pension funds have a lot to offer the Chinese.  If you have ever visited a Chinese bank you will know what I mean.  The other thing is up to us, not the Chinese.  What do we owe the UP engineer holding down the Janesville turn now that his job is going to disappear because GM is closing down? He has a tough future at 50 something with ten years to go on his Railroad Retirement and a high school degree.  Frequent, fair elections are a very good idea.

Sadly for CNN there is one thing we should not be - afraid.  To paraphrase Edward Morrow, “ We know by our history and our doctrine that we are not a fearful people.”

[al-in-chgo]

As so often happens, a lot of it depends on definition and interpretation.  We definitely export tons of grain to the world, and of course little bit of things like hi-quality beef, lobsters and such to be a major food exporter. 

OTOH a lot of people would be shocked to hear how much and what kind of our food is imported.  Partly it's in the irony of a country (US) that was pretty self-sufficient.  I mean, oranges and orange juice  came from Florida or California and thus were not classed "luxury" items and heavily taxed as they were in Great Britain or Germany.  Now a major component of American orange juice is Brazilian, and the food companies lobby Congress to make sure the "and/or" in the ingredients list can cover the fact that sometimes Brazilian o.j. constitutes most of our o.j.  (Not the unpasteurized kind, but note how expensive they are!)  

Even today, apple juice is noticeably cheaper than orange guide in Britain and Germany.  Result is that Europeans can have their chocolate, tobacco and orange juice but they pay a price for it -- and the lesson is clear that domestic products should be the norm whenever possible.  Although I suspect a lot of stuff is traded among the EC communities today, I'm not so sure they import from Chile and China the way we Americans do. 

Then it gets downright scary when we see that canned pineapple rarely comes from Hawaii.  Canned fish, and of course those lovely seedless Chilean grapes that we used to call "out of season" and I for one have gotten accustomed to. 

It got really scary and I wish I had taken notes when the NIGHTLY NEWS HOUR (PBS) told about how many ingredients from good ol' natural Catherine Clark brown bread (which this household uses) is made up of ingredients that have to be imported. 

I wish I could add more to this discussion, but I have a feeling it will be a pretty depressing list. 

 

[greyhounds]

Don't get scared or depressed.  Life is too short for that.

Get a copy of "Guns, Germs and Steel: The Fate of Human Societies".  When you read that the US has over 1/4th of the arrable land in the world you'll be calmed.

Sure, the US imports food.  It is not feasible to grow coffee or bananas in the US so we import them.  I like coffee and bananas so I contribute to the trade deficit.

But, in 2007 over 108 million hogs were slaughtered in the US.  One out of five was shipped across an international border as an export.  It takes 7.7 pounds of grain to produce one pound of pork.  So the hogs have to grow up where the grain is.  And with 1/4th the land that can produce grain, we're going to be exporting pig meat (and a lot of other food) for a long time.  So don't sweat the grapes.

 

[al-in-chgo]

From prior post:  "Get a copy of "Guns, Germs and Steel: The Fate of Human Societies".  When you read that the US has over 1/4th of the arrable land in the world you'll be calmed."

I read it when it went into paperback. Dang good book.  If I can find it I'll reread it or at least the part pertaining to the Great Plains.

BTW have you read Jared Diamond's following work, COLLAPSE? 

[greyhounds]

From prior post:  "Get a copy of "Guns, Germs and Steel: The Fate of Human Societies".  When you read that the US has over 1/4th of the arrable land in the world you'll be calmed."

I read it when it went into paperback. Dang good book.  If I can find it I'll reread it or at least the part pertaining to the Great Plains.

BTW have you read Jared Diamond's following work, COLLAPSE? 

No, I haven't read COLLAPSE.  I just ordered it from Amazon on your recomendation.

[andrewjonathon]

1. Being self-sufficient and trading with partners are fundamentally at odds with each other. Do you want to be self-sufficient but possibly pay more for goods or do you want to focus on things you have a fundamental advantage and let others produce things at which they are better. Personally, I don't see any real benefit to being self-sufficient. Who cares where the orange juice comes from so long as it tastes good.
2. The USA is not China's largest trading partner. In fact in 2006, the European Union overtook the US as China's largest trading partner. So I think they are as affected by globalization as us.
3. Despite the panic of jobs going overseas, I think the US will do just fine in the long run so long as they continue to let the market play the major role in the economy. If the government starts getting too involved then it probably will go south. The US economy has continually adjusted and reinvented itself in the past. In the early 1900's over 90% of the population was employed in agriculture. Today it is in single digits. If people back then knew the future erosion of agricultural jobs they would probably have panicked. And yet, today we still have a very high rate of employment because the economy reinvented itself. Overall its a very healthy process.

[wjstix]

From prior post:  "Get a copy of "Guns, Germs and Steel: The Fate of Human Societies".  When you read that the US has over 1/4th of the arrable land in the world you'll be calmed."

I read it when it went into paperback. Dang good book.  If I can find it I'll reread it or at least the part pertaining to the Great Plains.

BTW have you read Jared Diamond's following work, COLLAPSE? 

"Guns Germs and Steel" was made into a multi-part TV show on IIRC PBS.

For those not familiar, he's basically looking at how did part of the world end up so rich while the rest was so poor?? Part of his answer was geography, relating to how far north or south you were of the equator. If you can grow wheat in Syria you can grow it in Italy or Spain or North Dakota, because they're all within a belt that climatically is excellent for wheat. Wheat means bread means feeding your people and having enough left over so people can do things other than farm; some people can begin working with metals and creating things to help you advance technologically like improved plows and guns to protect your stuff.  Other people closer to the equator had a harder time feeding themselves, and because their climates were hotter, were a breeding ground for diseases that were rare in more temperate climates. 

In Turkey c. 1900, it was cheaper to buy a barrel of Minneapolis-milled flour there than it was to buy a barrel of flour grown and processed in Turkey. 

[al-in-chgo]

From prior post:  "Get a copy of "Guns, Germs and Steel: The Fate of Human Societies".  When you read that the US has over 1/4th of the arrable land in the world you'll be calmed."

I read it when it went into paperback. Dang good book.  If I can find it I'll reread it or at least the part pertaining to the Great Plains.

BTW have you read Jared Diamond's following work, COLLAPSE? 

No, I haven't read COLLAPSE.  I just ordered it from Amazon on your recomendation.

I feel flattered!  Thanks for giving my day a boost, and I hope you like the book.  - a. s.

 

[Murphy Siding]

The USDA says we produced 33% of the world's coarse grains in crop year 2007/2008 followed by China, the EU and Brazil. 

Any idea how this compares to years past?  If anything, it looks like grain is a bright spot in our trade defecit issues.

[al-in-chgo]

The USDA says we produced 33% of the world's coarse grains in crop year 2007/2008 followed by China, the EU and Brazil. 

Any idea how this compares to years past?  If anything, it looks like grain is a bright spot in our trade defecit issues.

It was supposed to have been a pretty good but not bumper year.

This year is shaping up to be a disaster, especially for corn, because of all the Midwestern flooding. 

Which reminds me that not all foodstuffs are treated as food.  Corn to ethanol, for example.

[Railway Man]

The USDA says we produced 33% of the world's coarse grains in crop year 2007/2008 followed by China, the EU and Brazil. 

Any idea how this compares to years past?  If anything, it looks like grain is a bright spot in our trade defecit issues.

It was supposed to have been a pretty good but not bumper year.

This year is shaping up to be a disaster, especially for corn, because of all the Midwestern flooding. 

Which reminds me that not all foodstuffs are treated as food.  Corn to ethanol, for example.

The disaster is for the uninsured farmer who lost his crop.  It's a price increase for purhasers of meat, corn sweeteners, and ethanol.  It's a bonanza for the farmer who did not lose his crop.

RWM

[SFbrkmn]

Kansas, by tradition, is the largest grower of hard red  winter wheat in the nation. As we speak, combines are cutting the amber waves of golden grain. Its a great time to be in the state. Because of the state being rich in wheat, flour mills were built all across the state back nearly a century ago. The number of these mills now has been reduced to about 12. In 1960 the United States controlled 80-90% of the world flour export market. Many mills south of a line from Denver to Omaha to St.Louis were in the so called export belt. For many, many yrs, Egypt was the largest flour importer--much of this flour made in KS that provided jobs in  milling towns. About 20 yrs ago, the federal govt began to slowly phase out its  USDA flour enhancement export program to where the share of flour exports now it less than 10% if not lower. This  lost business went to countries like France where the govt there was serious on the issue. Many mills thus have since closed acct of the market changes: Topeka, Buhler, Inman, Wellington and just across the OK line in Blackwell. If our govt did not let the flour  export program die, many of these mills would still be grinding and 50 foot boxcars of sack export flour heading to the gulf coast would be a everyday scene on BNSF & UP trains.

[SR1457]

While I dont have the exact figures, I am sure grains, and wheat are a lot cheaper that oil., so why dont we charge all these oil rich countries $150 for a bushel., and if they dont like that., "Then let them drink their oil, and we will eat more cereal and hotcakes"

[SFbrkmn]

There was a country & western song that I think came out in 1979 titled "if You don't Lower The Gas, We'll Lower The Boom". Can't recall who the singer was but it made the point just as the above post says. I'm just referring to wheat here but the problem why that wouldn't work is big business, coupled with the fact that there are so many countries that grow wheat themselves. In fact, almost everyday of the yr, wheat is being cut somewhere in the world. In 1980 President Carter imposed a grain embargo on Russia. It had little effect. Grain compaines still grain to the Russians. The payments were done through overseas banks and not here in the US. A loophole so to speak.

[al-in-chgo]

The USDA says we produced 33% of the world's coarse grains in crop year 2007/2008 followed by China, the EU and Brazil. 

Any idea how this compares to years past?  If anything, it looks like grain is a bright spot in our trade defecit issues.

It was supposed to have been a pretty good but not bumper year.

This year is shaping up to be a disaster, especially for corn, because of all the Midwestern flooding. 

Which reminds me that not all foodstuffs are treated as food.  Corn to ethanol, for example.

The disaster is for the uninsured farmer who lost his crop.  It's a price increase for purhasers of meat, corn sweeteners, and ethanol.  It's a bonanza for the farmer who did not lose his crop.

RWM

Absolutely.  I can do without corn-on-the-cob more easily than a family farmer can do without his livelihood.  - a.s.

 

 

[al-in-chgo]

While I dont have the exact figures, I am sure grains, and wheat are a lot cheaper that oil., so why dont we charge all these oil rich countries $150 for a bushel., and if they dont like that., "Then let them drink their oil, and we will eat more cereal and hotcakes"

Why don't we?  Because the United States has never gone to war against a country with which it has full trade relations.  Flip side can therefore apply, at least some of the time:  when we go to war, it's against nations we aren't trading with.  And as said above, lots of other countries can export flour (and cattle feed), if for no other reason than they are being subsidized by the central government, as in France.  We could if we wanted send some poor countries further into hunger but I doubt we could (or would want to) withhold food from societies that are willing to pay a market price for it. 

France is approximately the size of Texas and there's a good chunk of grain belt north and east of Paris that looks like the American Midwest:  big farm machinery, good-sized hopper cars that beong to "Transcereals"; I don't know if that's an expediter, gov't program or what, but it works. They have traveling fairs like our country fairs, even upland bird-shooting (I was there in early fall).  Adjusting for the language and the "funny" metric road signs it could have been Iowa. 

 

[greyhounds]

The disaster is for the uninsured farmer who lost his crop.  It's a price increase for purhasers of meat, corn sweeteners, and ethanol.  It's a bonanza for the farmer who did not lose his crop.

RWM

Does this mean that certain politicians will propose a windfall (Rainfall?) profits tax on the bonanza for farmers with dry fields?

[greyhounds]

Kansas, by tradition, is the largest grower of hard red  winter wheat in the nation. As we speak, combines are cutting the amber waves of golden grain. Its a great time to be in the state. Because of the state being rich in wheat, flour mills were built all across the state back nearly a century ago. The number of these mills now has been reduced to about 12. In 1960 the United States controlled 80-90% of the world flour export market. Many mills south of a line from Denver to Omaha to St.Louis were in the so called export belt. For many, many yrs, Egypt was the largest flour importer--much of this flour made in KS that provided jobs in  milling towns. About 20 yrs ago, the federal govt began to slowly phase out its  USDA flour enhancement export program to where the share of flour exports now it less than 10% if not lower. This  lost business went to countries like France where the govt there was serious on the issue. Many mills thus have since closed acct of the market changes: Topeka, Buhler, Inman, Wellington and just across the OK line in Blackwell. If our govt did not let the flour  export program die, many of these mills would still be grinding and 50 foot boxcars of sack export flour heading to the gulf coast would be a everyday scene on BNSF & UP trains.

Well, it might move in contaiers instead of boxcars today.

Seriously, what the Export Enhancement Program was was a subsidization of exports.  (corporate welfare?)  This meant that the government had to take money from some Americans and give it to other Americans.  I really don't think the US Government should be in the buisiness of taxing a waitress in Wisconsin so that flour can be milled and exported from Kansas.  (I also believe such redistribution of income is not constitutional.)

I know France does it.  So what.  If their people are willing to be taxed so that they may sell flour below cost on the world market - that's their problem.

[al-in-chgo]

From prior post:  "I know France does it.  So what.  If their people are willing to be taxed so that they may sell flour below cost on the world market - that's their problem."

That's what I think too.  Remember the blue tins of Danish Butter Cookies that are in the stores before Christmas?  Danes pay more for the same thing.  Subsidy. 

PS:  I just opened a can of Market Pantry cashews from Target.  Origin: "Africa, India, Brazil, Vietnam and Indonesia."   Since when did all the nations of Africa merge into one nation??

 

[SFbrkmn]

I had mixed feelings on the USDA flour export program. It had both its pro & cons. Being a former milling worker back when mills produced export flour, it provided jobs, a good market for wheat farmers, lots of interesting rail  activity on what kind of boxcars the switcher would spot for loading. The cons related to it was the fact that there were certain jobs in the mill that worked everyday the mill was running. Mine was one of them. When mills were filled up w/export orders, the mill ran 7 days a wk, including holidays except Christmas. When export dropped off, so did the runtime that would slack  down to 5 days a wk or even lower than that. Always loved it when business slowed. Atleast I got wknds off for awhile. 1983, 1984, 1986 & 1987 I recall were very heavy export  yrs for the milling business. Because of high business levels, I worked every single day from December 26, 1982 to Labor day wknd 1983--almost 9 months w/out a single day off. You bet I cursed the USDA.