Wheat shortages

Wheat shortages are making news everywhere, it seems — from the Mideast to the Midwest.

One of the hotspots early this year is a place with enough strife to begin with — Pakistan:

…flour shortages and rising food prices may well be the most pressing
issue for Pakistanis before next month's elections.
They may even overshadow concerns about violent attacks that have rocked the country.
Pakistan is running short of flour which is needed to make bread.
A government
decision in early 2007 to export a half-million tonnes of Pakistani
wheat, after it over-projected the national harvest, has contributed to
the shortfall.
This is prompting fears of further instability in the country.
And as if Iraq didn't already have enough problems — sorry, it's hard to say the "surge" is working when 15% of the entire population has had to flee their homes — a wheat shortage is developing there, too.
Iraq may face its worst wheat
shortages in years this year, aggravated by a delay in
purchasing that clouds deliveries for the rest of the year.
Food experts, millers, traders and even senior grain
officials privately warn a crisis looms even though Iraq is
about to return to the international market after a nearly
four-month halt in new purchases.
"We cannot envisage how future supplies can be smoothly
delivered with the exceptional delays that will no doubt create
a big gap in deliveries…We are already far behind in
fulfilling the country's monthly needs," an official who
requested anonymity told Reuters…
The impact of the delays will only worsen an already chronic
shortage that since last year has seen deliveries of wheat, with
the exception of February and March 2007, way below the
300,000-330,000 tonne monthly requirement, they added.
OK, so much of this can be chalked up to government bungling — ditto for Venezuela — but what are we to make of this development?
Confronted with a shortage of spring wheat, North Dakota's
state-owned flour mill may begin buying wheat from Canada, which the
Grand Forks mill has avoided doing since it began producing flour in

North Dakota's Industrial Commission voted Monday to allow
Vance Taylor, the mill's general manager, to buy wheat from outside the
mill's normal acquisition territory. The waiver of the mill's
wheat-buying restrictions will last through August, at which time more
supplies should be available from the fall harvest, Taylor said.

than 95 per cent of the mill's wheat comes from North Dakota farmers,
with some bought from western Minnesota, eastern Montana and northern
South Dakota, Taylor said.

In the mill's last quarterly report,
it listed purchases of 5.58 million bushels of hard red spring wheat
and 259,965 bushels of durum during July, August and September.

said he will explore buying winter wheat from producers to the south,
such as Kansas, and hard red spring wheat and durum from Canada. The
Canadian Wheat Board, which is based in Winnipeg, manages wheat and
barley exports from Canada's prairie provinces.

"With the
sky-high prices, it's most likely that spring wheat and durum stocks
… will come close to running out in the U.S.," Taylor said. "We've
had to take this step, which we will use only as we have to, as we go."

Yikes.  And our Maniac Trader Kevin Kerr sees no end in sight, as he pointed out last month:

…according to Kevin, the results of the latest World Agricultural Supply and Demand Estimates report reveals an agricultural sector with little or no slowing demand:

need 9 million more corn and bean acres (7.6 million corn/beans) this
spring and another 5.6 million in 2009 (5.7 million corn/beans).

is largely out-of-control demand and will require an unprecedented
acreage acquisition and reallocation endeavor. Even with massive
possible acreage manipulation through market price, we still need over
3 million acres of pasture this year and another 3 million next year to
move to grain production to have any hope of balancing the situation."

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