The US Government Has Zero Grain Reserves

In 1996, the Federal Agriculture Improvement and Reform Act of 1996
("Freedom to Farm Act") called for elimination of government stockpiles
of grain.  I'm sure someone thought it made sense, at the

Now, the United States government has no reserves of butter, cheese,
dry milk, barley, corn, oats, sorghum, soybeans, wheat, rice, sugar,
honey, peanuts, canola seed, crambe, flaxseed, mustard seed, rapeseed,
safflower seed, sunflower seed, peas, lentils, chickpeas, and cotton.
 [Source: US Farm Service Agency, href="">Current
CCC Inventory ( href="">PDF

Stockpiles have been dwindling since 1996, and were basically gone by
2007.  In May of this year, nearly the final bit of wheat was
released for humanitarian purposes.

To be perfectly accurate, all but 2.7 million bushels of wheat were
released, so it is not quite zero.  It's enough wheat to make
½ of a loaf of bread for each of the ~300 million people in America.

What is interesting, is that the href="">Freedom
to Farm Act was passed on April 4, 1996.  Yet, on
January 22, 1996, President Clinton had href="">authorized
release of 1.5 million metric tons of wheat from our reserves, in part
because of short domestic supply.  So we ran short of wheat,
then three months later, decided to abolish the reserves?

The Department of Homeland Security is doing a heck of a job, I'd say.

Not to worry, some people are paying attention.  For example,
this news was reported to the public in the href="">Tri
State Observer
, out of Milford, Pennsylvania.
 The alert folks at href="">Earth
Frenzy Radio
echoed it, as did href="">Survival
and href="">Wendy
Usually Wanders
.   href="">Grist
also mentioned it in their recent article on increasing food prices.

The private sector does have stockpiles, but these are href="">down
by 45% this year, compared to last.   href="">Worldwide,
wheat stocks are at their lowest level since 1977, and maize stocks are
at their lowest since 1983.  Keep in mind, in 1983 there were
only 4.7 billion people; now, there are 6.7 billion.

Naturally, the prices for these commodities are gong up.  This
was detailed in a href="">recent
article in the Wall Street Journal.
 (The WSJ article is behind a pay wall, but the full text is
available href="">here.)

Normally, price increases would be followed by production increases.
 In fact, world grain production is expected to href="">increase
by 2.6% in 2008 (depending on the weather, of course).
 But href="">climate
chaos and href="">topsoil
loss may limit our ability to adapt.  The difficulty
in adaptation may to href="">exacerbated
by limited fuel supplies.  Plus, the world population
increases a little over 1% per year.

According to the WSJ article:

In 2007 and early 2008, prices of wheat, corn, rice
and soybeans, among other crops, have escalated along with energy and
other natural resources.  Since the start of 2007, wheat
futures are up 69%, soybeans have risen 92%, corn is up 49% and rice is
up 131% on the Chicago Board of Trade.

A 2.6% increase in production seems rather paltry, in the face of these
massive price increases.  Granted, increased production takes
some lead time, and the price increases are fairly recent.
 But the disproportion between the increased price and the
increased production, suggests that it may not be possible to increase
production much more.  That is, given the very large increase
in price, one might have expected that the production would increase
more than it will.  It is too early to draw a firm conclusion,
but this could be an indication that we are at, or approaching, peak
food.  Some think it is fair to say that we are at, or
approaching, href="">peak

Oh, and by the way, href="">China's
grain reserve is presently between 150 million and 200
million tons.  But they don't take American Express.


Note: after I wrote this post, I read that US crop production for 2008 is already falling behind expectations.

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By speedwell (not verified) on 09 Jun 2008 #permalink

This is bad. REALLY bad. I mean, just what is going to drastically change in this country if we're forced to make our BEER from Chinese grain???

Seriously, remind people that without grain, their beer will get expensive too, and you'll see attitudes change REAL fast. :)

By Joe Shelby (not verified) on 09 Jun 2008 #permalink