The good news about corn and carbon
Grain markets shifted to a new footing last week with the surprising 14 percent drop in expected United States corn ending stocks.
In fact, the U.S. Department of Agriculture reports on ending stocks of grains and oilseeds and expected winter wheat acreage were all positive for prices.
No one is predicting that grain prices will now rocket up, but many believe a turning point in market psychology has been reached.
Traders and grain buyers will move from a perception of comfortable grain stocks to the potential for tighter product availability.
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Russian pulse trouble reports denied
Russia’s pulse crop will be larger than last year, which won’t help prices rally from their doldrums.
The continuing dryness in the U.S. plains and in parts of Brazil will become a greater concern. Demand might pick up as end users worry that prices could be higher in the coming months and begin to stock up now.
This news does not reduce the need for government assistance for grain and oilseed producers, but it does signal farmers to keep an eye on the markets and look for rallies that could present pricing opportunities for the 2000-01 crop.
Storing carbon
There appears to be a national campaign by business to question whether Canada should comply with the Kyoto Protocol on reducing greenhouse gases. Big business is complaining that Canada will take a bigger economic hit than other industrialized countries if it cuts its emission of carbon dioxide and other emissions by 2010 as set out in the protocol.
I can’t help but contrast the greenhouse gas problem to the massive spending required to avoid the computer Millennium Bug. In both cases, money has to be spent to avoid a potential disaster.
Few business groups questioned the need to upgrade computers to prepare for Y2K. In fact, most believe that spending to update computers will probably make the economy more efficient.
Spending to reduce our reliance on fossil fuels will also benefit the economy through more fuel-efficient vehicles and the growth of high tech industry. The benefits to farming could be impressive. Minimum till conservation farming builds organic matter and restores soil carbon. Systems already are being created by carbon dioxide producers, such as energy companies, to offset their carbon output by paying others, such as farmers, to store it.This way, farmers will be recognized as stewards of the environment in a tangible way. The money will be most welcome.
