Making bread

Wheat is the new gold. As poor countries brace for shortages, it's boom time for Kansas farmers.
"It feels like Christmas in August" admitted Darrell Hanavan, of the Colorado Wheat Administrative Committee, noting that the harvest just completed in his state seems to have been the most bountiful for 25 years.

The dollar value for the crop is almost sure to set a record.The US Department of Agriculture expects US exports to surge by 36 per cent this year. The futures prices of wheat on the Chicago commodities exchanges are spiking at heights that even a few weeks ago would have seemed mad –above $7 (£4.50) a bushel in recent days. Speculators have rushed to buy wheat in the wake of Russia's export ban may have created a bubble that is not immune from bursting.Russia announced that weeks of fierce heat and uncontrolled fires would cost the country a quarter of its crop and that its wheat exports, which will be frozen from tomorrow, may not resume until next year. Output in Ukraine and Kazakhstan has slumped too. Canadian wheat farmers have been struggling with crops drowned by rains that won't stop, and in eastern Australia, the wheat crop could be devastated by a plague of locusts expected to start hatching next week.

Egypt, the world's biggest wheat importer, and Indonesia and Thailand, which also both rely on imports of grain, complained this week that they face a sudden price squeeze on such staples as bread, pork and sugar and with that, the risk of social unrest of the kind witnessed in 2008, when food price hikes provoked riots in a number of countries. Abdolreza Abbassian, a senior economist with the UN's Food and Agriculture Organisation in Rome, said Morocco, Libya, Tunisia and Iran all face higher budget deficits because of the amounts they spend on bread subsidies.
"Some are politically unstable countries – they simply cannot afford" the social effects that bread queues could have on the urban poor.

Daryl Larson, who farms 1,500 acres in Kansas sold nearly half of his wheat crop but will keep the rest in the silo in the expectation that the prices will at least climb further. Most analysts would concur with Mr Larson's strategy of holding on to some grain for added profit. SOYMB would only ask why does some in this world face destitution and hunger while others hoard food to obtain more and higher profits.