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Curiouser and curiouser

(Friday, March 5, 2004 -- CropChoice news) -- Richard R. Oswald letter to DTN, 03/02/04: It's not surprising that grain markets have done what they have. Drought, ethanol, and BSE have tipped the scales in favor of price discovery, but I can't help but feel we've gone through the looking glass when I see corn and soybean prices reach lofty levels I only dreamed of just last year. Five dollar beans have nearly doubled in price and the giant corn pile at the local multinational grain elevator is disappearing into rail cars at three bucks a pop. It just gets curiouser and curiouser.

No one seems to be concerned about opening the flood gates of foreign production into our prized domestic market. While some analysts continue to deplore the dirt cheap market strategy of USDA, they don't seem to notice that prices have reached multi-year highs. Meanwhile, a lot of other analysts talk as though the party will never end even as trade negotiator Robert Zoellick offers to throw open the borders and eliminate the subsidies of the world's wealthiest consumer driven nation.

We might have to change the name of the Chicago Board of Trade to the Chicago Board of Supply Management. Next years prices may not hinge so much on what we grow here, but rather what it costs to get here what we didn't grow. Australian wheat, Brazilian beans, maybe even Chinese corn. Think about it. For the last few years, the reason we didn't have $3 corn was due to the fact that our new Chinese buddy had so much of it. Now all the analysts claim that China is out of the corn export game, even though they're still selling to some of their Asian neighbors. Chinese brassieres and color TVs might be too cheap to sell here, but if US corn were to return to the $5 dollar level it reached just eight short years ago, would Chinese corn from half a world away be too cheap? What about the Argentinean variety that originates much closer?

The demand for corn from ethanol production has been explosive as predicted. So far, so good, but the recent sinking of an ethanol tanker off the US coast reminds us that they make alcohol in other places besides the US and there are ways to get it here. In fact, where the sugar trade is less protected, they make fuel from the surplus. Anyone care to predict how long it will be before we import sugar in liquid form?

USDA has straddled both sides of the soy import issue while it's key agency APHIS has always taken the stance both on and off the record that phytosanitary rules would not be violated if the US were to turn importer of Brazilian soybeans and products. As one APHIS official said, in effect, Asian Rust will arrive on the wind if not on a ship.

The US farmer has a bull's-eye on his back. We are the last bastion of trade surplus in Import- America. We are the final domestic industry to face outsourcing competition in a nation of budget minded consumers.

Our leadership has said that COOL isn't cool. But cheap, no matter where it comes from, is.

It just gets curiouser and curiouser.

Richard R. Oswald
Missouri farmer