The elephant on the farm? Wheat prices.

I'm an advocate of the problems facing farming over the coming years, in particular, the depletion of fossil fuels which will cause severe disruptions to supply, mainly because of natural gas being essential for fertilisers, and the drying of corn prior to milling. There is also the problem with distribution being more expensive because of higher fuel costs, as well as climate change, GM crops (Monsanto patenting seeds), and of course expensive labour.

However, the elephant on the farm so to speak, is the current price of wheat which has almost doubled in one month. This may be due to speculation, or possibly the decision by Russia to halt all wheat exports, but whatever the cause, we are facing a very real problem within the next few months. Corn touches practically all foodstuffs, in the same way fossil fuels do. Pick up almost any food and it will contain corn, or a corn derived product. Including beer and lager of all things!!

Wheat prices: 26/6/2010 CLOSED: $456 then reaching a high of almost $800 on August 5th.

This could be the rank outsider (or should I say Rank Hovis outsider!) coming from the rear of the pack to challenge oil as the main problem facing us in the short term. Linked? Yes possibly, in fact certainly, but oil and wheat have always been connected, but only recently we've seen wheat absolutely stride ahead.

Not sure what to do for the best, but my guess will be that prices will fall back a bit, but that doesn't change the fact that these prices are "futures", so the damage has already been done, we will see higher food prices very soon which will then hopefully fall again when this episode is over.