That is part of it,,, poor weather and a little thing called demand by a larger and getting larger world population is also part of it. The thing I find interesting, as a commodity trader, is that the UN is throwing a fit cause now the G -7 now have to worry about providing reasonablely priced food for their people instead of throwing billion upon billion upon billions of dollars and euros into the abyess that is called third world famine.
Many countries that have tried to become self sufficent in agriculture get tired of throwing money at it or tired of the political upheaval it can cause. The Bad - Saudi Arabia made it thier goal to become self seficent in wheat 20 years ago, they did and now they say screw it, we are going to import everything. The Good - Brazil, the higher prices for commodities will continue to encourage the Brazilian farmer to expand the amount of acres that they can farm, and they have plenty. The US and Europe have finite amount of land that can be farmed,, yea yea we have the CRP debacle to get out of but it does not change the amount of acres. The real winner in this will be eastern europe, under the commies - ag production was crippled but now with higher prices for commodities, it will bring not only land back into production but with better practices to increase yeilds. The CHICOMS are the real issue, from crude to soy they have the dollars, no pun intended, to buy their way out of any problems, we saw them do it 1996 (go back and look at prices for ag commodities then) and they can do it again, one of my favorite stats - if everyone in China used 1 more quart of cooking oil a year, there is not enough feed stock (soy, palm, sun) etc, to do that even with the acreage increases in Brazil and Argentina. Ramble and Ramble.
