Fires and drought have reduced Russian grain supplies so much that the country is increasing security around government grain stocks, the Wall Street Journal reported this morning. The country banned exports of grain yesterday, news that caused wheat futures to jump. That rally in wheat prices is also driving up the price of corn and soybean. Russia’s move to cut grain exports set off fears that other governments will seek to hoard their own supplies.
Dan Pillar, in the Des Moines Register, points out that the rise in grain prices will help the U.S. reach at least a 10 percent gain in farm income this year. But the additional exports of American grain will cause some problems for railroads as they try to ship the larger loads.
Meanwhile, some analysts say the Russian problem is a regional phenomenon and not a world shortage. Meanwhile, many observers expect the U.S. to report huge corn, soybean and wheat crops this year, all of which could fill the shortage brought on by the Russian drought and fires.
• Meanwhile, it’s tomato season, but making a BLT is getting expensive. Pork belly futures have surged to record levels as the nation’s inventory of hogs has dropped.
• The National Newspaper Association is arguing that five day mail deliveries will be bad for rural communities. “Reducing the quality of postal service will reduce the quality of life in rural America, making it a less attractive place to live,” said Al Cross, director of the Institute for Rural Journalism and Community Issues at the University of Kentucky. “The resulting out migration, and suppression of in migration, will contribute to population loss and stagnation in rural counties and add to suburban sprawl that drains other public resources.”