Keeping The Black Rider At Bay: On Agricultural Exports

No one likes food shortages [1], and a substantial part of my own interest in logistics concerns world food supplies and my own concerns about their stability both now and in the future. As Stratfor has been kind enough to open some of their reports I took the opportunity to examine their own insightful examination of the world’s food staple supplies in the export market. After all, no one wants to hear this: “A quart of wheat for your day’s wages, and three quarts of barley for your day’s wages.” After all, that’s not a lot of food at all for all the money you make in a day.

Stratfor’s news is relatively positive, for now, but there are some works of caution we ought to reflect on as well [2]. Corn, rice, wheat, and soybeans are the four most important staple crops on the world market (and soybeans is the least important of those, though it is a growing source of protein as an alternative to meat). Stratfor’s analysis would seem to indicate that there are some dangerous issues with the food export market at present concerning the centralization of exporters.

For example, four nations dominate 80% of the world’s market for corn: the United States, Brazil, Argentina, and Ukraine. While Brazil and Argentina have been struggling with a drought and the exports of the United States have dropped a bit over the past year, Ukraine had a great year, breaking its yield and export records. Likewise, the United States dominates soybean exports currently, but South American countries like Brazil, Argentina, Uruguay, and Paraguay are rapidly growing as soybean producers despite recent drought conditions there. Brazil is expected to take the lead in soybean production as American production lags. The top producers of rice, controlling 80% of exports, are Thailand, Vietnam, Pakistan, and the United States. It remains to be seen how Thailand’s floods affect rice exports, though it seems as of yet that there has been no lasting harm. Ten countries dominate wheat exports: the United States, Australia, Russia, Canada, the European Union, Argentina, Kazakhstan, Ukraine, Turkey and Uruguay, controlling 90% of exports, and while the United States’ exports have suffered, Russia and Kazakhstan have had record years.

There is a pattern here worth noticing. The United States has traditionally dominated exports of all food crops: wheat, corn, rice, and soybeans. Nonetheless, the United States is experiencing a decline in agricultural yields in all staple crops. This is a concern. A loss of agricultural prosperity reflects more endangered economies (since the United States appears to depend heavily on staple exports to provide positive value for exports to counteract massive imports), and also threatens food supplies. Stratfor’s report was quick to note that American production of corn had only dropped 1% but exports had dropped 10%, meaning more American corn was being consumed at home and not able to be exported.

Likewise, the rise of exports in Russia and former Soviet nations like the Ukraine and Kazakhstan, as well as in South America, suggests that there are growing agricultural markets capable of supplanting America’s traditional dominance in such areas. While 2011 does not promise an end of America’s agricultural prosperity, the absolute and relative decline of America’s agricultural productivity is a warning sign we ought to pay attention to. So far we have kept the black rider at bay, but how long we will be able to do so in the face of continued threats to our agricultural base remains unclear.

[1] https://edgeinducedcohesion.wordpress.com/2011/11/15/start-your-day-off-right-with-a-food-shortage/

[2] http://www.stratfor.com/analysis/update-global-food-commodities?utm_source=freelist-f&utm_medium=email&utm_campaign=20120125&utm_term=engage&utm_content=link2&elq=797d46b9aa754b60bf9b58226c4ac804

About nathanalbright

I'm a person with diverse interests who loves to read. If you want to know something about me, just ask.
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5 Responses to Keeping The Black Rider At Bay: On Agricultural Exports

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