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The 2010 Food Crisis means Financial Armageddon


Cassandra Syndrome

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Very well researched and presented article here from Market Skeptics. With all the talk and concerns about sovereign debt default, the commercial mortgage meltdown, the US Dollar, US Bond Market, Global Trade etc. the subject of the economics of our most essential commodity, food is being for the want of a better word ignored.

There is overwhelming, undeniable evidence that the world will run out of food next year. When this happens, the resulting triple digit food inflation will lead panicking central banks around the world to dump their foreign reserves to appreciate their currencies and lower the cost of food imports, causing the collapse of the dollar, the treasury market, derivative markets, and the global financial system.
Between the global depresson and adverse weather conditions food production and therefore supply is decreasing.

Early in 2009, the supply and demand in agricultural markets went badly out of balance. The world experienced a catastrophic fall in food production as a result of the financial crisis (low commodity prices and lack of credit) and adverse weather on a global scale. Meanwhile, China and other Asian exporters, in an effort to preserve their economic growth, were unleashing domestic consumption long constrained by inflation fears, and demand for raw materials, especially food staples, exploded as Chinese consumers worked their way towards American-style overconsumption, prodded on by a flood of cheap credit and easy loans from the government.

Normally food prices should have already shot higher months ago, leading to lower food consumption and bringing the global food supply/demand situation back into balance. This never happened because the United States Department of Agriculture (USDA), instead of adjusting production estimates down to reflect decreased production, adjusted estimates upwards to match increasing demand from china. In this way, the USDA has brought supply and demand back into balance (on paper) and temporarily delayed a rise in food prices by ensuring a catastrophe in 2010.
Demand is always increasing as the population increases and the developing world become wealthier.

The data is out there, but nobody seems to care.

An astounding lack of awareness

The world is blissful unaware that the greatest economic/financial/political crisis ever is a few months away. While it is understandable that general public has no knowledge of what is headed their way, that same ignorance on the part of professional analysts, economists, and other highly paid financial "experts” is mind boggling, as it takes only the tiniest bit of research to realize something is going critically wrong in agricultural market.
Market Skeptics: *****2010 Food Crisis for Dummies*****
 

deiseguy

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There is a whole list of posters on this site who are going to be so disappointed by the start of this thread. Rumours of the death of Irish agriculture have been greatly exaggerated.
 

Cassandra Syndrome

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There is a whole list of posters on this site who are going to be so disappointed by the start of this thread. Rumours of the death of Irish agriculture have been greatly exaggerated.
Really?, Farmers are going to strike in the New Year by banning exports of beef.
 

Schuhart

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There is a whole list of posters on this site who are going to be so disappointed by the start of this thread. Rumours of the death of Irish agriculture have been greatly exaggerated.
There's a difference between Irish agriculture having a future and Irish farmers having a future. At present we're importing veggies from land-scarce UK. I've no doubt that we could be exporting food to the UK instead, but that would require a revolution in who owns and farms the land.
 

Cael

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There's a difference between Irish agriculture having a future and Irish farmers having a future. At present we're importing veggies from land-scarce UK. I've no doubt that we could be exporting food to the UK instead, but that would require a revolution in who owns and farms the land.
Thats the point, a chara, our Irish Kulaks are so dependant on hand outs that they have become totally incapable of supplying any type of food shortage.
 

deiseguy

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There's a difference between Irish agriculture having a future and Irish farmers having a future. At present we're importing veggies from land-scarce UK. I've no doubt that we could be exporting food to the UK instead, but that would require a revolution in who owns and farms the land.
One slight correction, we could be exporting more food to the UK and it will happen as the land is transfered fairly rapidly over the next 10-15 years into much larger units.Demographics win every political debate eventually there are simply not enough people coming into the industry to replace a quarter of those leaving.
Ireland is already a significant net exporter of food. Less than 5% of world dairy production is internationally traded we export around 80% of our production. Britain from where we seem to import a lot of veg was never more than 80% self sufficient in dairy production. Where food is produced is a case of horses for courses.
 
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Schuhart

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One slight correction, we could be exporting more food to the UK and it will happen as the land is transfered fairly rapidly over the next 10-15 years into much larger units.Demographics win every political debate eventually there are simply not enough people coming into the industry to replace a quarter of those leaving.
That's fine, we're substantially saying the same thing. We basically both agree that the future of Irish agriculture involves many current farmers leaving the sector without being replaced.
 

Cassandra Syndrome

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deiseguy

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That's fine, we're substantially saying the same thing. We basically both agree that the future of Irish agriculture involves many current farmers leaving the sector without being replaced.
Yes we agree on that point. I think we differ on what the outcome of these changes will be for the country as a whole and for rural areas in particular.
 

Cassandra Syndrome

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Cassandra Syndrome

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Aug 23, 2009
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Very well researched and presented article here from Market Skeptics. With all the talk and concerns about sovereign debt default, the commercial mortgage meltdown, the US Dollar, US Bond Market, Global Trade etc. the subject of the economics of our most essential commodity, food is being for the want of a better word ignored.



Between the global depresson and adverse weather conditions food production and therefore supply is decreasing.



Demand is always increasing as the population increases and the developing world become wealthier.

The data is out there, but nobody seems to care.



Market Skeptics: *****2010 Food Crisis for Dummies*****

That 2009 article's predictions on the surge in food commodities was spot on.

Food costs hit record high as minister admits prices are 'a worry' - Telegraph
 
D

Dylan2010

In global terms though Russia, Ukraine and parts of Africa are no where near their potential. We have 30 years of EU and US policy of dumping food on third world markets and destroying local agriculture, then there is the insane corn ethanol subsidies. Its not that there isnt enough food, just too much government
 

richie268

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[ame=http://www.youtube.com/watch?v=qJqV7adXUyw]YouTube - 2010-08-23 - Hugh Hendry - The Battle Over Potash[/ame]
Interesting little clip with Hugh Hendry discussing the complex issue of food supply.
 
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Potatoeman

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Isn’t China edging towards no longer being self sufficient too when they enter the market expect huge price spikes.
 
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