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Lies, lies and more lies.  Who can believe our government?

Reported in   Market Skeptics, Thursday, December 17, 2009   by Eric deCarbonnel

*****2010 Food Crisis for Dummies*****

If you read any economic, financial, or political analysis for 2010 that doesn’t mention the food shortage looming next year, throw it in the trash, as it is worthless. There is overwhelming, undeniable evidence that the world will run out of food next year. When this happens, the resulting triple digit food inflation will lead panicking central banks around the world to dump their foreign reserves to appreciate their currencies and lower the cost of food imports, causing the collapse of the dollar, the treasury market, derivative markets, and the global financial system. The US will experience economic disintegration.

Farmers can’t be going bankrupt across the US thanks to the worst harvest season ever seen while at the same time producing the USDA's Biggest Crop Ever! Someone is lying, and evidence supports the farmer’s story.

Adverse weather conditions across the globe

American farmers weren’t alone in their suffering this year. Abnormal weather has ruined crops around the world in 2009:

The worst drought in half a century has turned Argentina's once-fertile soil to dust and pushed the country into a state of emergency. The country's wheat yield for 2009 was 8.7 million metric tons, down from 16.3 million in 2008.

2) Australia is suffering the longest running and
most severe drought on the planet. November temperature records were broken all over eastern Australia, and lower wheat yields than expected were reported, leading to production estimate cuts. Profarmer Australia has cut their Australian wheat production estimate by 1 MMT to 20.9 MMT, and Commonwealth Bank of Australia reduced their estimate by 0.7 MMT to 21.6 MMT (USDA's current estimate is, of course, is an
insane 23.5 MMT).

Northern China was hit by worst drought in 50 years. Chinese wheat production was predicted to be down 10% "In A Best Case Scenario". The sustained drought lead to water and food shortages in June for more than 1.37 million people in northwest China's Ningxia Hui Region. Chinese corn production is expected to shrink at least 10%, with shortages developing by spring-summer of 2010.

The Middle East and Central Asia are suffering from the worst droughts in recent history, and food grain production has dropped to some of the lowest levels in decades. Total wheat production in the wider drought-affected region is currently estimated to have declined by at least 22 percent in 2009.

5) Wind, rain, and hail
ruined India’s spring wheat crop. Following failed wheat harvest, India then experienced the driest monsoon in 37 years. In terms of affected area, India’s drought was the worst since 1918. Farmers who could no longer irrigate crops now feared nothing would be left to drink. Millions of poor villagers across southern India are facing an imminent food shortage following months of intense drought and recent devastating floods.

6) Etc…

Financial crisis worsens drop in crop production

On top of the worldwide abnormal weather, the low commodity prices and lack of credit caused by the financial crisis harmed production.
The lack of credit curbed farmers’ ability to buy seeds and fertilizers limiting production, and low prices at the end of 2008 discouraged the planting of new crops in 2009. In Kansas for example, farmers seeded nine million acres, the smallest planting for half a century.

Between the effects of the financial crisis and the abnormal weather experienced across the globe, the idea that 2009/10 saw record harvests of anything is pure fantasy.

Look at information around the rest of the world.