Should America stockpile grain?

Great Debates
1

We all know the world has changed.

India and China, once impoverished, now have robust economies. Middle class Westerners now must compete with an emerging middle class in Asia for grain. We also have to compete with them for oil, which drives up the cost of oil, which drives up the cost of everything else—including grain. In addition to this, the ethanol boondoggle has taken substantial acreage out of food production and into fuel production, again driving up the cost of grain. The weaker dollar also drives up the cost of both oil and grain. And there are other factors I’m probably not even aware of. These are not passing, temporary conditions. The world has changed. For the foreseeable future, energy and food are going to be more expensive for everybody. Including us. And that means a lot of Americans are going to have to spend more on energy and food, and less on iPods and designer clothes.

Some Asian countries have restricted or completely eliminated exporting grain.

So far as I’m aware, no such restrictions exist in the United States. Americans, however, must continue to compete with Asians for American grain in an open market. And given the Enron and Katrina debacles, I’m not at all sure America’s business and political leadership has the good of the people as their highest priority. Pardon my cynicism, but I believe at least some of our leaders are perfectly capable of selling American grain to the highest bidder abroad even if Americans are starving.

Should America have a strategic grain reserve, just as it has a strategic oil reserve? I’m aware that taking several billion bushels of grain off the market to create a reserve will have a serious impact on grain prices, and this proposal will probably exasperate the free market devotees among us. And yet I’m beginning to think it might be a good thing if the United States took steps to assure ourselves of an adequate grain supply should the markets go haywire. I think we’d all feel better knowing we have at least a little protections against fluctuations in the global grain market.

We cannot assume that food will always be plentiful simply because it always has been plentiful. And frankly I’d feel a lot better if America had a little something stored up just in case.

Am I being a nervous Nelly? Or should Pharoah listen to Joseph?

2

Our leaders don’t sell grain. Farmers sell grain. And they sell it wherever they find the best market for it. If Americans were starving, the price of grain would rise and farmers would sell it all here.

3

True story: the Chinese government has worried about the possibility of food shortages causing political unrest. Their solution? They established a Strategic Pork Reserve: they put millions of pig caracasses in longterm deep freeze and thaw them out as needed.

4

Yes, that worked out great for the Irish during their little potato famine, when the landlords shipped the grain out of the country and sold it elsewhere.

Your post assumes that Americans will have more money to buy the grain than foreigners will, or that the farmers won’t already have contracts in place to ship the grain overseas.

5

Completely different situation. You make it sound like allowing exports starved all those people to death. When India makes us a colony you can maybe invoke the Irish famine, but otherwise, it’s a highly inaccurate comparison.

6

Farmers sell grain to brokers, not to individuals. The brokers sell to whoever has the money, and may not care if poor people are rioting in American cities because they don’t have enough to eat.

You have to understand that the rich and powerful are often perfectly willing to let the rest of us suffer so long as they hold on to their wealth and power.

7

Which encourages farms to grow more grain…

Wait, so the world has changed…but it will never change again? :confused:

No, unlike crude oil, grain is a perishable good. It doesn’t keep forever so you will constantly taking grain out of the market only to have it eventually rot before it’s used.

And where does one store millions of bushels of grain anyway?

8

America already has “a little something stored up just in case.” Right now it’s about 1.3 billion bushels of corn, 160 million bushels of soybeans, 208 million bushels of wheat and surpluses of rice and other commodities.

That’s the difference between what’s available in silos, grain elevators and storage bins and what’s been sold. It’s there, waiting for someone to buy it.

9

Gods…another one of these. They seem to sprout like weeds.

Pretty much what Nemo said here. The government doesn’t sell grain (thank the gods for small favors)…farmers do. And they are sold on a commodities market. That said, in the highly unlikely even there were ever starving American’s (and looking around at my fellow American’s I’m thinking a bit of starvation might be a good thing to be honest), there is nothing stopping the government from BUYING grain and distributing it to the masses, yearning to bake bread. Which is pretty much what would happen in this ridiculous OP.

What have Enron and Katrina to do with anything? What do you suppose they prove wrt grain? And what has any of this to do with the commodities market, where grain is actually sold?

This leaves aside the ridiculous assertion that the government would simply stand around with it’s thumb up it’s collective ass and do nothing if people were starving here in the US. Don’t you folks ever get tired of this same old bullshit??

There ARE reserves of food in case of emergencies…all over the country. What, you figure every time there is a local emergency they have to go out and grow the food they ship to those folks?? Weave the blankets, pump the water out of the ground and bottle it? We aren’t using a fraction of the land under cultivation we once had…and yet we have huge surpluses of food every year. AFAIK that isn’t likely to change. If it DOES change then it won’t exactly be a problem with those greedy farmers selling all their excess grain overseas while people starve because there won’t BE any excess grain…and what there is would be too expensive to sell (you know…supply and demand and all that, ehe?). In such an (unlikely) emergency the government would step in to distribute food to the places hardes hit, and probably draw on reserve food stocks to get us through until conditions picked up or stabalized from whatever disaster had struck making us have such a shortfall in grain.

Or maybe they would let them eat cake…

Just the standard anti-business nervous Nelly IMO. YMMV.

:eek: Were we occupied by the colonial British when I wasn’t looking?!? Who are these ‘landlords’ exactly that will ship off all the food and let the subjugated people languish and starve so as to swipe the land for colonization by their own citizens?

I really had no idea…I must have missed the memo…

(IOW… :rolleyes: )

-XT

10

Farmer on NPR this morning. He talked about how he has lived a lower middle class life, but thanks to current prices he can make a middle class life. He also said that if prices dropped without the petroleum based costs dropping (diesel and fertilizer both come from those pricey barrels of oil), he would be bankrupt.

We make plenty of food in the US, and Mexico could easily triple its output as well. It is not Americans’ who will be having food riots, it is 3rd world countries who sell their grain to India and China.

11

I’m not assuming that. I’m stating it as a fact. Americans do have more money than Indians or Chinese. If grain gets scarce enough for it to come down to a bidding war, we’re going to be the ones making the highest bids. The Irish starved because other people were able to pay more for grain then they could afford to pay.

12

We do? This food “crisis” has been with us for, what, a few months? If it persists for a few years, then perhaps we can talk about some fundamental change. It’s a little short-sighted to look at recent events and conclude that there is something major going on.

13

Also, I think (my opinion here) that the Brits WANTED the Irish to starve. They had been a thorn in the side of the Brits for quite a while, and also here was all that juicy land there ripe for the picking.

The blight was an act of god…but the famine was an act of the Brits. IMHO anyway. And there is absolutely zero parallel between the potato famine and this ridiculous fantasy of the OP’s in any event.

-XT

14

I figure it was more an act of stupidity rather than malice. England didn’t need to pick up land in Ireland in the 1840s; they already had all the land. And it’s not like there was any desire to resettle English farmers in Ireland to work that land. So England was happy with the status quo; the Irish worked the land and grew the crops and the English owned the land and sold the crops. The famine ruined that status quo and hurt everyone although obviously the Irish were hurt much worse.

15

Actually, the potatoe famine was more apathy than either stupidity or malice. The British simply wanted theirs and really just didn’t care whether the Irish died or not. The Irish may not have had a really different skin color, but there was extremely powerful racism ongoing, combined with religious hate and classism.

16

Well, I was going to wait until I had the time and energy for a detailed reply, but it doesn’t like like I’m ever going to get it, so this will have to do.

The replies I’ve gotten here all seem to have the same underlying theme: The United States has never had a critical food shortage, therefore the United States will never have a critical food shortage. All we have to do is trust the market, and nothing bad will ever happen. Well, nothing really bad, anyway.

Well, we’ve seen some pretty serious market failures over the last couple of decades, the most spectacular of which is the mortgage snafu. In the absence of regulation, people who were supposed to be responsible and competent got greedy, and as I’ve remarked elsewhere, greed makes people stupid and mean. Reckless lending turned the housing market into a game of musical chairs, each buyer expecting to unload his house before the bubble burst, sticking the last buyer with the financial loss. Plenty of people saw it coming, but nobody seemed able, or even interested, in putting a stop to it.

Are the people who deal in grain really immune to this?

Xtisme wants to know what Katrina and Enron have to do with grain, and he asks me if I expect the government to stand around with its thumb up its butt while people go hungry. Well, why wouldn’t it? That’s exactly what it seemed to be doing during Katrina and now during the mortgage foul-up. Plenty of people knew New Orleans was a disaster waiting to happen, and when the crisis finally hit, the response of the government at all levels was, to phrase it charitably, sluggish. Even after the levees broke, it looked horribly as though the government didn’t really care about doing anything truly effective–or perhaps I’m the only one around here who remembers Michael Brown’s “How dare you interrupt my power lunch?” attitude. Enron similarly showed that big shots who smelled big short term profits for themselves were perfectly willing not only to wreck the lives of working people but to wreck the company itself as well. I see American companies who would prefer to import labor under H1B visas rather than pay Americans a decent wage. I’ve watched a video which shows companies exactly how to discriminate against American job applicants. None of it reassures me about the judgment and integrity of the people who are supposed to be making important economic decisions for our country.

Why would the big money people who deal in grain be different? Am I supposed to believe that there aren’t plenty of speculators and other hotshot financial types who wouldn’t gladly let millions of Americans go hungry if they can make big money fast by selling American grain abroad?

Apparently Xtisme and the others believe Americans will always be wealthy enough to outbid the rest of the world for American grain, and the world will always have an adequate supply. I don’t share that confidence. I look at how the oil crisis of the 70s caught America by surprise, and how the current surge in oil prices seems to have caught us with our pants down as well. And I have to ask: Just once, couldn’t we anticipate at least the possibility of a crisis and take a few precautions against it?

We’ve established an oil reserve to provide at least some cushion against oil shocks. Perhaps we should take similar steps to provide some cushion against a grain shock as well.

17

You seem determined to find a crisis where there’s no basis for one. You keep bringing in other historical events which are not parallels to this one. Here’s the essential facts:

  1. American grain production is not controlled by any outside political concern.
  2. Absent such an outside concern, grain gets sold on the open market to the highest bidder.
  3. Americans have more money than anyone else and will be the highest bidder.

Now unless you can convince us that one of these things is likely to change in the foreseeable future, we’re not going to panic about a grain crisis. And repeatedly saying “But it could happen” and “Don’t trust the Man” aren’t convincing us.

18

Food prices around the world are up more than 80% in two years, global grain stocks are at 25 year lows, American stocks are the lowest in the last 60 years, there have been food riots around the world, a number of nations have either curtailed or suspended grain exports, and experts say we are in the first worldwide food shortage since the Second World War. And nobody sees a potential problem here? :confused:

19

Assuming you have cites to back all that up, I’d still say from the perspective of your OP that American’s don’t need a strategic grain reserve, nor is a grain shortage going to be a problem for most Americans except that things made with grain are going to cost more for a while.

This is a bit different than saying no one sees any problems however. In the short term I’m fairly sure that nations other than those in the first world are going to have problems…perhaps major problems. And first world nations are going to have troubles helping those poorer nations out in the short term (perhaps)…but, again, this is not what your OP was asking…which is should we have some kind of grain reserve for our own needs.

-XT

20

Sure there are problems. But you’re claiming a specific problem - that one day Americans are going to wake up and find that all their grain was sold overseas and we’re going to starve. That particular problem isn’t going to happen.

A problem that is happening is that grain shortages are causing people in the third world to go hungry. If the American government were to respond to this by buying up grain and putting it away in storage, it would make the actual problem worse.