Wheat supplies at 10 weeks

Farmers and agricultural publications continue to provide detail that shows the seriousness our politicians aren’t yet really facing.

Menker’s team at Gro Intelligence finds, as of May 19, global inventories of wheat amount to 20% of annual consumption, meaning the world has just 10 weeks’ worth of global wheat consumption in storage.

“Conditions today are worse than those experienced in 2007 and 2008,” she says. “The lowest grain inventory levels the world has ever seen are now occurring, while access to fertilizers is highly constrained, and drought in wheat growing regions around the world is the most extreme it’s been in over 20 years.”

AgWeb, Is the World Really Running Out of Wheat? 06/07/2022

Note that AgWeb doesn’t answer the question that they ask. The answer appears to be, “Yes, we are running out of wheat.”

More specifically, the world would probably be okay if we were getting bumper crops in the US and Canada, but we’re not. We’re lucky in that the over-wet weather finally broke long enough for us to get wheat, corn, and soybeans planted, but we’re not going to get a crop that will compensate for the lack of wheat elsewhere.

Also worth noting: The price of beef is not looking too expensive right now relative to expectations. Unfortunately, that appears to be because beef farmers are afraid that the cost of fodder and grains will go high enough that they won’t be able to keep their cattle profitably, so it’s better to slaughter and sell them in the short term than raise them longer term. That keeps a lid on prices right now — higher supply — but reduces supply in the future dramatically, because we’re killing tomorrow’s stock today.

I reiterate that I’m not an expert on this stuff and am only repeating what I hear from people in the business who seem to know better. Feel free to argue: I’d love to find out that I’m wrong.

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