I've been posting about the decimated corn and soybean crops. Now it appears that wheat is at risk.
"Weather Woes Sow Worry on Wheat." The Wall Street Journal by L. Pleven and B. Mukherji August 13, 2012 p. C1, C4
Majia here: I'm going to paraphrase some data found in the article:
Australia is facing a 24% drop in wheat production, Argentina facing a 23% drop, EU a 4% drop, Kazakhstan a 54% drop, and Russia a 31% drop. The US is predicting a 13% increase.
The USDA predicts a 5.2% drop in global wheat production.
That 5.2% drop doesn't make too much sense to me given the significant declines in production expected in major producing countries.
The article notes that hedge funds, pension funds and other investors have "ramped up bets on rising wheat prices tot he highest level on record, as of Sep 4..."
Majia here: Rising bets mean the price of wheat is going to rise even higher, increasing starvation in the developing world.
We may see a repeat of the effects of spiking commodities in 2007-2008. Investors pouring into food commodities contributed measurably to global hunger at that time.
Please see "The Food Bubble: How Wall Street Starved Millions and Got Away With It"
Harpers magazine has an article by Kaufman on the food bubblehttp://www.harpers.org/archive/2010/07/0083022
Hunger in the Future
Perfect Storm Brewing
US Poverty and Global Hunger Rise: Less then Tepid Policy Response to Global Crisis in Human Welfare
Bad News for India's Crops and Hunger Globally?