By David L. Brown
According to the poem by Robert Frost, some think the world will end in fire, some in ice… Well, ask an Aussie and he’s more likely to bring up drought and plagues of locusts. We know that Oz has been suffering years of relentless drought, leaving the Murray-Darling river system virtually dry. Now, at last some relief has come in the form of rains. Good news, right? No worries, eh? Well, that’s as maybe, according to an article today from the British newspaper The Independent.
Australia’s Darling river is running with water again after a drought in the middle of the decade reduced it to a trickle. But the rains feeding the continent’s fourth-longest river are not the undiluted good news you might expect. For the cloudbursts also create ideal conditions for an unwelcome pest – the Australian plague locust.
The warm, wet weather that prevailed last summer meant that three generations of locusts were born, each one up to 150 times larger than the previous generation. After over-wintering beneath the ground, the first generation of 2010 is already hatching. And following the wettest August in seven years, the climate is again perfect. The juveniles will spend 20 to 25 days eating and growing, shedding their exoskeletons five times before emerging as adults, when population pressure will force them to swarm.
It is impossible to say how many billions of bugs will take wing, but many experts fear this year’s infestation could be the worst since records began – 75 years ago. All that one locust expert, Greg Sword, an associate professor at the University of Sydney, would say was: “South Queensland, New South Wales and Victoria are all going to get hammered.”
The article, titled “Australia Faces Worst Plague of Locusts in 75 Years,” predicts that the coming disaster “is expected to cost farmers billions.” Well, yeah, that it might — but what’s more important, the amount of money farmers make or the number of people who starve in the famine that is slowly strangling the planet? Hmm, I guess money and profit once again trumps human lives.
Meanwhile, the U.S. corn and soybean harvest is under way and agri-business leaders are crowing about the wonderful news of higher commodity prices. The reason: The harvest doesn’t look so good. This report today from AgWeb.com explains what’s up with that:
With an already tight carryover projected for next year, corn’s supply noose seems to tighten by the day as the market looks for news to ensure corn supply for the coming year. Soybeans are following suit as demand is increasing for that crop and it appears the market must begin to bid up acres. This is creating an “unbelievably bullish market.”
Corn carryover, projected to be the lowest since the 1995-96 marketing year before USDA’s September USDA’s Crop Production Report, looks to be the noose around the necks of grain buyers. Daily reports of lower-than-expected yields and mounting bullish demand news are combining to paint a fundamental and technical picture that will shoot corn and soybean prices considerably higher, says Jerry Gulke, Top Producer marketing analyst and president of The Gulke Group.
The title of the article, “Unbelievably Bullish Corn and Soybeans” tells the story. Yeah, bullish is good and bear markets are bad—for traders and investors. But that’s actually a load of bull because it’s crop failure that lies at the bottom of the story. And for a world in which a billion or more people are already living in the looming shadow of famine this wonderful bull market isn’t good news at all.
And as always, while grain traders profit no matter what, for the farmer it’s a crapshoot. Those who luck out and are able to harvest good yields will cash in from the high prices. Those others whose failures contribute to the shortfall … well, they’re stuck on the horns of the bull.
In the wake of disastrous drought and heat in Russia and Ukraine, wheat prices have already shot upward this year and remain at more than $7 a bushel. Now yields of corn and soybeans seem to be disappointing, too, causing the present bull stampede. Remember, too, that the harvest has a long way to go and weather problems could cause even today’s pessimistic crop outlooks to be revised downward.
None of this bodes well for world food security, and how appropriate that the coming Australian summer may bring us video clips of skies darkened by clouds of locusts descending on fields of crops. Stay tuned.