Where the crops have been good, life is pretty much normal. I do find it a little spooky how much agricultural infrastructure can be operated by so few people. Rural USA is getting old. But even old and empty, rural Minnesota seems like it will have contributed more than its fair share to the feeding of the world's hungry billions in 2012. This best-case scenario glosses over the fact that this year's crop will be slightly smaller than last year's. And as we see below, Russia's grain yield is off by 25%. A little bit here, a little there, and pretty soon you are talking about a real food shortage.
Cross your fingers, folks.
I love the fact that Cristina Fernandez is willing to try just about anything conventional economic wisdom hates these days. And not only getting away with it, but prospering. Of course, it helps a LOT that Argentina is a net food exporter.
Russia considers grain export curb to keep prices down21 September, 2012
Russia doesn’t plan to impose grain export limitations at the moment because of soaring domestic prices, but Russia’s deputy PM Arkady Dvorkovich says it is considering market interventions to regulate prices.
Dvorkovich stressed that any market limits “don’t make any sense and won’t improve the situation in the market”.
His comment came hours after Minister of Economy Development Andrey Belousov said that “it's quite possible the government will decide to restrict grain exports,” if the prices at the domestic market continue soaring.
Domestic prices for Russian third-class milling wheat may rise to $290 per tonne by the end of the year, from the current $260, Belousov said, adding that the government will discuss the issue "this autumn". Earlier this year Russian officials repeatedly said that they won’t introduce any limits, despite fact that a severe drought destroyed a quarter of this year’s grain yield.
Meanwhile, experts agree with Dvorkovich. “Export restrictions are not the best option,” Aleksandr Korbut, Vice-president of Russian grain union told RT. “Higher grain prices are very attractive for grain producers as it stimulates growth and attract investment into the sector”.
Korbut pointed out that imposing export limits won’t help to curb grain prices, but could result in the opposite effect.“Russia is the world leading food supplier, so any export limitations will push prices up worldwide as it was in 2010. The prices have already grown on speculations about the drought in Russia this year,” he explained.
A price surge in global markets would eventually lead to a price hike in the domestic market and speed up inflation, Korbut stressed. “The Russian state has more effective tools, such as selling grain from the intervention fund to keep prices down,” he added.
In 2010 Russia, the world’s second biggest grain exporter, introduced an export ban after an unprecedented drought damaged the harvest, reducing it to just 61 million tons. The move shocked the market sending prices soaring worldwide.
The government expects this year’s grain harvest to be between 72 million and 73 million tons, down from a record 94.2 million tons last year. If it drops to 70 million tonnes, Russia's exportable surplus would be around 10 million tonnes, said Belousov. more
Cristina Fernandez, Argentina President, Challenges Critics In U.S.By MICHAEL WARREN 09/24/12 11:31 AM ET
BUENOS AIRES, Argentina -- President Cristina Fernandez comes to Wall Street and Washington on Monday with a message for critics who say Argentina is headed for economic disaster by refusing to play by the rules of the global financial system: good riddance to the rules.
Her government has racked up a long list of unpaid IOUs while helping the country recover from its humiliating, world-record debt default a decade ago. And Fernandez argues Argentina's economic rebound has been possible precisely because its leaders have stood up to foreign pressures and put their people first.
Argentines used to be "dazzled by the North," she said last month while inaugurating an expanded highway, one of many infrastructure projects she said would have been impossible had her government done as outsiders demand.
"They hadn't noticed that the rich countries don't want partners or friends; they just want employees and subordinates. And we're not going to be anybody's employees or subordinates. We are a free country, with dignity and national pride."
As Fernandez addresses the United Nations Tuesday and then takes questions at Georgetown and Harvard later in the week, she's sure to insist, as she has often in the past, that her forceful management of the economy has made factories rebound, jobs more secure, society more egalitarian and the future brighter than it has been in years.
Fernandez says corporations no longer tell Argentine presidents what to do, and instead must heel to a government that puts the people's needs first. Natural resources are once again sovereign, and Argentina is freer than ever from international debt obligations. more