U.S. Farmers Head Into Key Stretch for Harvests

The world is much faster than grain farmers are growing, draining reserves and pushing prices to levels that fed food riots in poor countries three years ago.
The role of the United States to maintain a global shortage of food in the bay hinges largely on crops during the coming months as farmers in the U.S., the world's largest exporter of agriculture, coaxial cable wheat, soybeans and other crops in their fields. That prospect is likely to be reinforced on Thursday when U.S. Department of Agriculture releases its monthly update of world agricultural markets.
Economists expect global wheat production to recover this year drought conditions ease in the Black Sea, which would reduce U.S. exports wheat and make the prices. While economists expect grain prices to ease somewhat if global crop up this year, prices are still expected to remain high for years. What's more, nothing less than the crops can cause large price swings wild.
"The stage is set for serious disorders in climatic disasters happen," said Keith Collins, former chief economist of the U.S. Department of Agriculture. "It seems clear that the possibility of a more widespread food crisis the world has increased."
With emerging market economies on the rise, food prices have soared along with global demand.
Today, wheat prices have increased by 80% from a year ago. High food prices were among the factors triggering street protests that recently swept through North Africa, where wheat dominates the diet of the region. Egypt is the largest importer of grain. Governments across Asia are using subsidies and price controls to protect consumers from inflation.
In the U.S., retail food prices are expected to rise 4% this year, much faster than in 2010, when the government index of consumer prices of food rose 0.8%, the rate slowest since 1962. Food prices are creating in just as consumers are paying more at the pump. Rising energy prices sparked by the turmoil in the Arab world could also add to the costs of food production.
The chief executives of supermarkets and other food businesses such as restaurants are reluctant to pass along all their costs on the rise, as long as the U.S. unemployment rate, now 8.9%, remains high. That could change if the economy improves.
The evidence of what might be ahead abounds in the nation's agricultural belt. prices of commodities are increasing, partly because the food-importing countries have few other places to shop.The U.S. controls 55% of world trade in maize and 44% of the soybean trade, 41% of trade in cotton and 28% in wheat.
February USDA farm price index, goods, covering 48 products, was 24% more than in February 2010. That increase translates into a windfall for U.S. grain producers, but the pain for owners of cattle feedlots, fattening their cattle with grain.
China is eating up almost a quarter of U.S. soybeans to fatten pigs and chickens desired by its middle class. country's textile factories are buying almost a third of exports of U.S. cotton. U.S. exportsare wheat by 46% compared to last year due to weather problems called competitors like Russia and Canada in some markets.
Because the mandates of gasoline prices, and federal, about 40% of U.S. corn crop largest being prepared in ethanol. At the time of the fall harvest begins, the Department of Agriculture U.S. expects to have enough corn to satisfy the appetite left the country for 18 days. The country was a tight supply of this once since the 1930's Dust Bowl era.
Farmers have responded much higher prices by planting more land and then produce saturation pressure on prices. But this cycle seems to be disappearing, which means that food prices could stick muchlonger in the past.
Farmers are producing large crops. The USDA forecast U.S. farmers increase the area planted to eight major crops in the country this year by 9.8 million acres, or 4%, the biggest change in 15 years. The department expects that corn growers harvest a record 13.73 billion bushels this fall.
But demand for corn is so strong that this 10% increase in harvest would extend the country's reserves with only five days. As a result, the USDA expects the price of the corn crop this year's yet-to-be-planted in a record average $ 5.60 a bushel.
World coffee production was a record last year, but prices are rising because the reserves are stretched thin. Sugar prices are the highest in almost 31 years despite a record crop and large last year. The potential for civil war in the cocoa-exporting giant Ivory Coast has raised prices at the highest level in 32 years despite record production last year.
Due to weather problems last year in the major wheat-producing nations such as Canada and Russia, world wheat production fell 5. 5%, but the production was the third largest in history.
"The strength of demand has increased to the point that good years are not filling containers to offset the bad years," said Keith Flury, senior commodity analyst at Rabobank in London.
One solution is for farmers to increase production more quickly than they have been. But it is difficult to do in the powers of agriculture, such as the U.S., where prices of agricultural land have skyrocketed and the best land is taken now. Much of the land theforeign to be brought under the plow is in the regions where the climate is volatile, as the wheat belt of the Black Sea.
"The era of (growing) surplus is over," said Dan Glickman, who was agriculture secretary during the Clinton administration and now a senior member of the Bipartisan Policy Center, based in Washington.
David cleaving, a farmer aged 53, who raises 3,500 hectares of grain and cotton near Wildorado, Texas, on the peninsula of the state, said, "Prices are high but everything related to agriculture appears become increasingly risky. "
Many economists are worried about what would happen to food prices if a drought were to hit long-overdue Midwestern corn and soybean producing states this summer. Most forecasters do not provide for the Midwest, but is seeing the dry weather in the Southern Plains with concern.
The drought of 1988 reduced the size of the U.S. corn crop by 31%. The food system absorbs the shock because the U.S. was seven months from corn in reserve when farmers harvest their fields withered. With the stocks of small harvest this year as a drought could cause the price per bushel of corn and soybeans to nearly double to $ 12 and $ 27 respectively, from their current levels through the roof, said Dan Basse, president of AgResource Co., a Chicago commodity forecasting concern.
Economists say that political pressure to strip the ethanol industry could build federal aid if the U.S. food pricesfire and the high cost of feeding frozen milk production, pork, beef and chicken. Abroad, the number of malnourished people could rise further when the purchasing power of U.S. funds to feed the hungry around the world an estimated $ 2.1 billion in fiscal year 2010, was weakened.
The drought is in the minds of many U.S. analysts due to drought and reduced crop potential of winter wheat in the Southern Plains, which is planted in the fall and harvested in early summer. Forecasters see a good opportunity to unusually dry weather to persist in much of the southern U.S. in the spring. In Texas, a major state crop of wheat, 56% of the crop is rated in poor to very poor condition by the USDA.

(Source: http://online.wsj.com/article/SB10001424052748703867704576182922704152088.html?mod=googlenews_wsj)