What is the effect of global warming on US wheat stocks and the price of bread?

Question

2007 closing stocks were a at a 60 year low of 280 million bushels and falling fast because other countries are buying. The price of wheat has gone from $220 to $420 per tonne in the last year. The remaining stock is about 55 lb of wheat per capita. How many days will the existing stock last at current rates of consumption? What will happen if the IPCC predictions of reduced wheat yields due to altered rainfall patterns in the SW US are correct?

Answer 1

I think the biggest problem is that the futures market is bouncing around.  In the farm community I live in even the analysts who report on it every day say they've never seen anything like it.  A major factor is China.  They'll commit to buy a huge block of an agricultural product, sending the futures sky high, then back out at the last minute, hoping for a fall in price.  This tactic actually works, but it's created so much uncertainty in the grain markets that it has caused prices to rise across the board.  I believe uncertainty often has that effect on a commodity.

Answer 2

You have it all wrong.  The price of wheat is rising due to the increase in demand for ethanol.

From the BBC News:

"The reason for the surging price is increasing demand from refineries that are buying corn - or maize as it is sometimes called - to turn it into ethanol."

http://news.bbc.co.uk/2/hi/business/6481...

http://www.vnunet.com/business-green/new...

http://www.forbes.com/markets/feeds/afx/...

If a farmer used his land to grow wheat, when he sees the price of corn rising, he will switch to growing corn.  This will decrease the supply of wheat (or any other commodity) and increase its price.  Basic 101 Economics.

Answer 3

Global warming has done very  little to effect the price, but the hype over it has. The government in the search for finding a substitute, has botched it big time with the introduction of using Corn, in ethanol production.

Ethanol  very inefficient where it can’t be piped, so its transported by truck which is expensive. Its pushed up, the prices of foods that are derivatives from corn, exponentially.

Some day a viable substitution will be found and it will be introduced into the free market without the government subsidizing it, because it will sell itself.

As it stands now, ethanol is suspect and should be looked into. I think that the introduction of Ethanol is unethical and based upon bad science.

Answer 4

Here's one description of the effect of climate change on wheat:

"A warmer Arctic will also affect weather patterns and thus food production around the world. Wheat farming in Kansas, for example, would be profoundly affected by the loss of ice cover in the Arctic. According to a NASA Goddard Institute of Space Studies computer model, Kansas would be 4 degrees warmer in the winter without Arctic ice, which normally creates cold air masses that frequently slide southward into the United States. Warmer winters are bad news for wheat farmers, who need freezing temperatures to grow winter wheat. And in summer, warmer days would rob Kansas soil of 10 percent of its moisture, drying out valuable cropland."

http://www.nrdc.org/globalWarming/qthini...

A much more detailed analysis of the effects on agriculture, water supplies and qualiity, and electrical demand appears in this report to Congress, including a reminder of our experience with  50% reduction in yields:

The Potential Effects of Global Climate Change on the United States

http://www.epa.gov/climatechange/effects...

"The effects of a warmer climate alone would generally reduce wheat and corn yields. Yield changes range from + 15 to -90%."

"Dryland farmers in the Great Plains are particularly vulnerable to climate variability. The Great Plains States of Nebraska, Kansas, Oklahoma, and Texas were the hardest hit during the Dust Bowl of the 1930s (Worster, 1979; Hurt, 1981). Yields of wheat and corn dropped as much as 50% below normal, causing the failure of about 200,000 farms and migration of more than 300,000 people from the region."

Answer 5

The global warming myth has nothing to do with wheat prices.  Economic factors and increased grain consumption for ethanol production have been the driving force behind the price change.

Answer 6

Populations have gone up every where . The devaluing of the dollar and the reserves that other country have is causing them to buy up US grain reserves an future crops . An there is nothing stopping them . But all this will be blamed on global warming as an escape goat . Not on our failed finance system .

Answer 7

You probably weren't around during the late 70's and early 80's.

Government subsidies created not only a unintentional price fixation but actually curtailed wheat production.You have at least two types of wheat,spring and winter.Which one are you talking about.