I look forward to headlines that say, "Good Times Unavoidable", or
"Future Continues to be Boringly Optimistic".

But until then, plant as big a garden as you can.

http://www.kansascity.com/news/nation/story/514388.html

Posted on Mon, Mar. 03, 2008 12:15 AM

Experts fear 'corn shock' ahead for economy
By JERRY HIRSCH
Los Angeles Times

The nation¹s growing dependence on corn in fuel as well as food could
put the nation in perilous economic straits in the event of a Midwestern
drought, economists say.

³We are replacing price volatility from the Middle East with Midwestern
weather price volatility,² said Michael Swanson, a Wells Fargo & Co.
vice president and agricultural economist.

Corn is a key element of the U.S. food supply. Dairy cows eat it to make
milk, and hens consume it to lay eggs. It fattens cattle, hogs and
chickens before slaughter. It makes soda sweet. As the building block of
ethanol, it is now also a major component of auto fuel.

Analysts warn that a ³corn shock² could lead to $5 gas and $3.50 eggs as
the effects reverberate across the economy.

It could happen as soon as this summer.

³The risk of a drought right now is higher than normal because of the La
Niña we are seeing,² said Bruce Babcock, an agricultural economist at
Iowa State University, referring to the cooling of ocean temperatures
that often has a drying effect.

Such would occur against a backdrop of soaring prices for basic food
items and other commodities that are already stressing the economy.
Coffee, platinum and oil prices are already up dramatically.

After a torrid 2007, corn prices have risen an additional 20 percent
this year because of global demand for livestock feed, sweeteners and
ethanol. The rush by American farmers to forgo other grains to plant
cash-producing corn, along with weather problems, has squeezed wheat
supplies, pushing the price of that grain up 21 percent. Soybeans have
risen 25 percent.

Analysts are already simulating what would happen if a drought hit the
Corn Belt. Babcock estimates that corn could reach $8 a bushel from
$5.46 now.

As any farmer can tell you, Mother Nature is fickle. The U.S. has
suffered four major weather disasters since 1971 that wiped out 21
percent to 29 percent of the corn crop at a time.

Bad weather, including droughts, scorching heat waves and cold, cloudy
spells at just the wrong time, has reduced harvests by billions of
bushels. Previously, these disasters have raised food prices. The next
drought will be the first to affect gas prices.

That¹s because ethanol ‹ mostly refined from corn ‹ will make up about 6
percent of the nation¹s gasoline supply this year, and that¹s expected
to rise to 10 percent over the next five years.

But if there were a crop shortfall, the rising price of corn would
prevent ethanol distillers from earning a profit, prompting them to
slash production, Babcock said.

Oil companies would have to scramble to fill that sudden gap with
conventional gasoline. Prices would soar for both fuels, said Philip
Verleger Jr., an energy economist in Aspen, Colo.

³One way to see this is to look at what happened last year,² Verleger
said.

Industrial accidents and other refining disruptions cut U.S. gasoline
production about 10 percent in February 2007, sending wholesale prices
soaring, he said.

Farmers are also worried about what could happen in the short term.

³A drought would be bad for everyone. The high prices would hurt my
customers, and I would have no crop to sell,² said Ron Heck, a
fourth-generation soy and corn farmer from Perry, Iowa.

Blame oil companies for part of the problem, said Matt Hartwig,
spokesman for the Renewable Fuels Association in Washington.

³The oil industry has just not made the investment in refineries to keep
up with the demand for gasoline,² Hartwig said.

As demand for gasoline outstrips refinery expansions, fuel prices will
be linked more tightly with the size of the corn crop.

³You might see a point where even the threat of a drought could cause
gas prices to rise,² Wells Fargo¹s Swanson said.

Lester R. Brown, an author and president of the Earth Policy Institute,
sees a different scenario, one with global implications.

He estimates that as long as oil prices continue to hover around $100 a
barrel, ethanol distillers could pay up to $7 a bushel for corn and
still make money.

However, Brown said, ³if the ethanol producers stay in the market, that
will disrupt the food supply.²

He added: ³Because of the interrelationships among crops, a major
shortfall in the U.S. harvest could tip global grain and soy markets
into chaos.²

It would affect the prices of food made directly from these commodities,
such as bread, pasta and tortillas, and food made indirectly, such as
pork, poultry, beef, milk and eggs.

If it happened this summer, it would be especially bad because of the
current pace of global food inflation.

³The rest of the world is less able to pay high prices for food. What¹s
annoying for us is life-threatening elsewhere,² Brown said.
----------

What a small world. The cooling of the Pacific off of Chile causing a
potential drought in the corn belt. Who would'a thunk it?

"The hard rain's gonna fall". said the delphic oracle. Now what did she
mean buy that?

Cuba here we come. Again, how did you do that urban agriculture?

Six billion people today. Nine billion in 2050. Increase in land = 0.

Let's plant those gardens BIG.
--

Billy

Impeach Pelosi, Bush & Cheney to the Hague
http://angryarab.blogspot.com/
http://rachelcorriefoundation.org/

This thought from a bookmark from the American Chemical Society:

"Only 5 percent of the members of Congress have backgrounds in science
and engineering. Yet, everyday they make decisions that impact the
scientific community."

This holds for effect on entire community.