GRANTS PASS, Ore. » Oregon farmers are moving ahead with plans to start planting their next crop as questions remain about the source of a patch of genetically modified wheat found in a farmer’s field there last spring that threatened trade between the Pacific Northwest and other countries.
Speculation about the origin of the unapproved wheat discovered in northeastern Oregon ranges from saboteurs to a passing flock of geese. The U.S Department of Agriculture’s Animal and Plant Health Inspection Service said Friday their investigation is ongoing.
Grass Valley wheat farmer Darren Padget says they may never know for sure, but he and other farmers are going ahead with plans to start planting winter wheat in mid-September.
“It’s one of those things where you just scratch your head,” the Oregon Wheat Commission member said as he loaded another truck with seed wheat to haul to a supplier for the local farmers’ co-op. “Everybody’s talking about seeding. We had rains through here the other day that will make seeding conditions good.”
Blake Rowe, the commission’s CEO, said although Asian buyers stopped placing orders for a couple of months, the overall economic impact has been minimal, and markets are back to normal.
Japan, South Korea and Taiwan all resumed placing orders for Northwest wheat after tests failed to turn up any that was genetically modified.
The Japanese government tested 1.2 million metric tons of U.S. wheat for GMO material without finding any, according to the trade group U.S. Wheat Associates.
“The customers came back before the harvest was really finished,” Rowe said from his Portland office. “It didn’t really interfere too much with the movement of wheat.”
If there is any more genetically modified wheat growing, farmers won’t know until spring.
Fields that grow wheat this winter will be sprayed with herbicides after harvest in the spring, so they can lie fallow for a year. Any wheat growing after it has been sprayed is likely to have been genetically modified to survive herbicides, which makes it easier to grow.
That’s how the rogue strain was discovered.
The last decade saw the end of cheap oil, the magic growth ingredient for the global economy after the second world war. This summer’s increase in maize, wheat and soya bean prices – the third spike in the past five years – suggests the era of cheap food is also over.
Price increases in both oil and food provide textbook examples of market forces. Rapid expansion in the big emerging markets, especially China, has led to an increase in demand at a time when there have been supply constraints. For crude, these have included the war in Iraq, the embargo imposed on Iran, and the fact that some of the older fields are starting to run dry before new sources of crude are opened up.
The same demand dynamics affect food. It is not just that the world’s population is rising by 1% a year. Nor is it simply that China has been growing at 9% a year on average; it is that consumers in the big developing countries have developed an appetite for higher protein western diets. Meat consumption is rising in China, India and Brazil, and since it takes 7kg of grain to produce 1kg of beef (and 4kg to produce 1kg of pork), this is adding to global demand.
Farmers have been getting more efficient, increasing the yields of land under production, but this has been offset by two negative factors: policies in the US and the EU that divert large amounts of corn for biofuels and poor harvests caused by the weather.
If the World Bank’s projections are anything like accurate, further massive productivity gains from agriculture are going to be needed over the next two decades. There will be an extra 70m mouths to feed every year
CHICAGO, Illinois (Agriculture.com)–The CME Group corn market closed limit down on improved planting weather outlooks Thursday.
The July corn futures settled down the 30 cent ‘limit’ at $7.29 1/4. The contract traded around $7.24, synthetically. The July soybean contract closed 31 cents lower at $13.53 1/2. The July wheat futures closed 34 1/2 cents lower at $7.76. The July soybean meal futures settled $7.60 per short ton lower at $354.20. The July soyoil futures closed $1.48 lower at $56.93.
In the outside markets, the NYMEX crude oil is $0.10 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 36 points. Since 1980, silver hit a new record price of $50.
“As I said yesterday, with exact scenario today, we left technical gap areas below and the first one was $7.49,” one CME Group corn pit trader says. But, I believe it’s merely about healthy corrections. Otherwise, the market is still bullish long term.”
Tim Hannagan, PFGBest.com senior grain analyst, says corn, wheat and beans continue to remove the recent weather premium, as this last system is now over and there’s not another appreciable rain until next Thursday now. “This has the trade thinking some spring wheat and corn could be planted early next week in the upper Plains. But, even if planting occurs, heavy rains enter on May 6 & 7 and then again May 11 & 12, leaving us generally well behind on planting,” Hannagan says.
Rich Feltes, RJ O’Brien market analyst, says, weather concerns don’t stop after planting. “The market is still going to be hanging on the edge needing to know the crops will be getting timely precipitation in the absence of summer heat. For that matter, for the late planted areas, we will need later than normal frostings. And we won’t know that for months,” Feltes says.
BAMNOD, India — The 50-year-old farmer knew from experience that his onion crop was doomed when torrential rains pounded his fields throughout September, a month when the Indian monsoon normally peters out.
For lack of modern agricultural systems in this part of rural India, his land does not have adequate drainage trenches, and he has no safe, dry place to store onions. The farmer, Arun Namder Talele, said he lost 70 percent of his onion crop on his five-acre farm here, about 70 miles north of the western city of Aurangabad.
“There are no limits to my losses,” Mr. Talele said.
Mr. Talele’s misfortune, and that of many other farmers here, is a grim reminder of a persistent fact: India, despite its ambitions as an emerging economic giant, still struggles to feed its 1.1 billion people.
Four decades after the Green Revolution seemed to be solving India’s food problems, nearly half of Indian children age 5 or younger are malnourished. And soaring food prices, a problem around the world, are especially acute in India.
Globally, floods in Australia and drought in China have helped send food prices everywhere soaring — on fears the world will see a repeat of shortages in 2007 and 2008 that caused food riots in some poor countries, including Egypt.
A record drought in China’s major wheat producing areas threatens to push world food prices beyond their current high level, the United Nations warned in a report Tuesday, adding to growing concern about how the rising cost of food is affecting the poor around the globe.
China, the world’s largest wheat producer, consumes almost all of what it grows and keeps roughly 55 million tons in reserve. But the prospect of a failed winter wheat crop might prompt the country to import grain on a scale that could put further stress on world prices, the U.N. Food and Agriculture Organization warned.
The FAO’s world food price index, a composite indicator of the cost of a basket of goods, is at its highest level since it was introduced in 1990. Wheat prices have roughly doubled since mid-2010, according to International Monetary Fund data.
Rainfall has been more than 30 percent below normal since October across five northern provinces that account for about two-thirds of Chinese wheat production, the FAO reported. Shandong province, China’s second-largest wheat-growing area, has had less than half an inch of rain since September and is heading for its worst drought in 200 years, according to reports from China’s official news agency.
By WILLIAM NEUMAN
First it was heat and drought in Russia. Then it was heat and too much rain in parts of the American Corn Belt. Extreme weather this year has sent grain prices soaring, jolting commodities markets and setting off fears of tight supplies that could eventually hit consumers’ wallets.
In the latest market lurch, corn prices dropped in early October, then soared anew, in response to changing assessments by the federal government of grain supplies and coming harvests.
The sudden movements in commodities markets are expected to have little immediate effect on the prices of corn flakes and bread in the grocery store, although American consumers are likely to see some modest price increases for meat, poultry and dairy products.
But experts warn that the impact could be much greater if next year’s harvest disappoints and if 2011 grain harvests in the Southern Hemisphere also fall short of the current robust expectations.
“We can live with high commodity prices for a period without seeing much impact at the retail level, but if that persists for several months or a couple of years, then it eventually has to get passed on” to consumers, said Darrel Good, an emeritus professor of agricultural economics at the University of Illinois.
MOSCOW — Prime Minister Vladimir V. Putin on Thursday banned all exports of grain after millions of acres of Russian wheat withered in a severe drought, driving up prices around the world and pushing them to their highest level in two years in the United States.
The move was the latest of several abrupt interventions in the Russian economy by Mr. Putin, who called the ban necessary to curb rising food prices in the country. Russia is suffering from the worst heat wave since record-keeping began here more than 130 years ago.
“We need to prevent a rise in domestic food prices, we need to preserve the number of cattle and build up reserves for next year,” Mr. Putin said in a meeting broadcast on television. “As the saying goes, reserves don’t make your pocket heavy.”
NEW YORK — Wheat prices are soaring their maximum allowed amount on the Chicago Board of Trade after Russia banned grain exports for the rest of the year.
Prices shot up 60 cents, or 8 percent, to $7.8575 immediately after the open of trading on Thursday. It’s the highest price since August 2008.
CBOT rules stipulate that prices can rise a maximum of 60 cents in one day, although they are allowed to rise more the following day if the 60-cent limit is hit.
The price of wheat has been soaring since early June, and notched its biggest monthly gain in July in at least 51 years.
Russia, one of the world’s biggest grain exporters, cut off wheat exports because a severe drought has already destroyed one-fifth of that country’s crop.
Copyright © 2010 The Associated Press. All rights reserved.
Wheat prices in Europe reached a two-year high this week after Russian officials announced that extreme heat and drought had decimated roughly 20 percent of the country’s winter crop. Prices retreated slightly after the country’s Agriculture Ministry said that Russia, the world’s third-largest wheat exporter, would use its stocks to maintain exports.
Despite the reassurances, financial markets remained concerned that the wheat losses could be higher than projected, The Financial Times reported. Meteorological reports indicate that hot, dry weather in Russia will continue until mid-August.
Poor growing weather has also stunted wheat harvests in other countries, including Canada, where unusually heavy rains will reduce yields by about 17 percent. Ukraine faces an even more severe grain shortage after a growing season marked by drought and floods, leading government officials to impose a wheat export ban. Meanwhile, hot, dry weather in Western Europe is expected to reduce production of a wide swath of food commodities.