Russian fires, Australian locusts, Argentinean drought - an interesting list of things are affecting world wheat prices - but it’s too early to worry about a shortage. Johnna Miller reports…
Wheat prices are big news right now, there’s a potential drought in Argentina, a possible plague of locusts in Australia, but the big news is from Russia…”what’s going on is some developing problems with the wheat crop in Russia. And that has really captured the market’s attention in a big way. Severe drought in Russia and other parts of the formers Soviet Union is really reducing their grain production prospects. The Russians announced that they were not going to allow exports of wheat, they were going to protect their domestic supply.”
American Farm Bureau Economist John Anderson says Russia is one of the top wheat producers in the world, so that announcement that set off some alarms in the grain markets…”will we see the kind of thing we saw a couple of years ago with record high wheat prices? At this point I think probably not because the supply situation is a lot different right now, but the market is still maybe a little touchy to that kind of thing, and I think how this thing plays out over the next six months, I think, is the critical period.”
Anderson doubts consumers will notice a significant difference in bread or cereal prices but it could be good news for US farmers…”the United States stands to pick up more export business if Russians decide to forfeit that business. The United States is sitting on it’s largest wheat stocks in more than 20 years, so we’ve got abundant wheat stocks and the potential to pick up quite a bit of export business because of this situation with Russia.”
|