- Farmers are set to abandoned their wheat crops at the highest rate since 1917
- Why pasta prices are surging
- Drought issues have actually gotten worse. Keep reading to see what it means for food prices and crops heading into summer…
URGENT: A $500 Trillion Time Bomb is Set to Explode the U.S Economy…
America’s top economist is warning you…
This is bigger than the S&L Crisis.
Bigger than the Tech Wreck.
Bigger than the Subprime Crisis… and the double-dip recession fears.
And I’m afraid to say – bigger than the calamity of the pandemic, which throttled markets across the globe.
Here are all the gory details…
So you know EXACTLY what’s going on…
Along with a small handful of investments…
Which could protect you, your family, and your wealth from the firms destined to go belly up.
Dear Reader,
If you’re a pasta lover, I want to apologize ahead of time…
Wheat acreage has fallen by the wayside. Spring wheat just experienced the worst planting season in our history. With winter wheat, it was the second worst of all time.
You’re actually having some replanting, and farmers have picked up some corn and soybean acreage, which is actually good for potash demand.
We’ll continue to see potash get deployed. Because of this, pricing has come down.
I think people’s expectations got a little ahead of themselves. And now you’ll start to see things balance out.
When we look at wheat, it continues to flounder. It just keeps bouncing back and forth.
When you look at the Russia Ukraine deal, which is the Black Sea deal, technically Ukraine has 68 vessels waiting for inspection.
And Russia has refused to inspect any of them over the last three days.
There is a growing concern that Russia is going to break the deal, which expires this month.
If that happens, that’s going to pull a significant amount of wheat and corn off the market.
From a wheat perspective, this is the worst winter wheat harvest we’ve ever had.
When you look at spring wheat planting, this is the second worst we’ve ever had.
In Oklahoma, they’re describing it as equivalent to the Dust Bowl. And you’re not getting additional flow from Russia either.
Russia was expecting wheat yields of 100 million tons. They have now downgraded that to 73 million tons.
Food prices are starting to turn back up when you look at the UN data.
You’re continuing to see more pressure realistically to the upside, which is why we believe that wheat remains mispriced.
Why Pasta Prices Are Surging
When you look at Italian pasta prices, even though wheat is coming down per se, based on the market, pasta prices are actually surging.
And it’s because there’s less wheat available, and the wheat that they’re getting is harder to use.
You’re seeing the types of wheat weaken, which is already creating an increase in food prices.
And that’s only going to get worse as more volume is taken off the market.
Drought Issues Have Gotten Worse
At the same time, drought issues have actually gotten worse in the US.
According to a recent Bloomberg article, “America’s wheat fields have become so plagued by drought that farmers are now poised to abandon crops at the highest rate in more than a century.
Producers are expected to harvest about 67% of their planted acres.
If realized, that would be the lowest harvest ratio since 1917.”
They have also worsened in Canada to the point where Canada now has several forest fires in a lot of the planting regions, to give you an idea of how dry things are.
I don’t think people appreciate that in Canada, it’s so cold and then gets so warm, the snow on the ground actually doesn’t melt – it evaporates.
It doesn’t run off, it actually evaporates, so you don’t really get a lot of that water actually seeping into the ground.
Argentina is as dry as they come. And Brazil has actually turned drier over the last week after being fairly wet, which is going to be a key one to watch for a pivot.
Russia is going to be your biggest swing.
And with Ukraine, I think that there’s a 70 to 75% certainty that the Black Sea deal will be abandoned, or at least minimized…
Because Russia can still control the amount of flow of Ukrainian product, by withholding over 60 cargos of product at this point in time.
The Consumer Will Continue To Get Hit On Everything From Bread to Pasta
Realistically, the consumer is going to continue to get hit on everything from bread to pasta.
One of the things that they’re looking to do, in order to protect pricing, is shrink inflation.
If you’ve noticed at the grocery store, they’re trying to take the boxes of pasta and make them smaller.
So you’re no longer buying a pound of pasta for the same price. You’re actually getting less.
Again, for all you bread and pasta lovers out there, don’t shoot the messenger.
Thanks for reading,
Freedom Financial News
