WHEAT MARKET GOES WILD

TOM WEBB PIONEER PRESS - Decades from now, farmers will still talk about this week - the moment when wheat in Minneapolis soared to nearly $20 a bushel. Like a 100-year flood, spring wheat prices have risen relentlessly all winter, obliterating every record in sight. At the Minneapolis Grain Exchange, wheat fever pushed prices to $19.80 a bushel in trading Friday - nearly triple the record from 1996.

To grain experts, it's a warning of what happens when grain supplies don't keep up with rising demand. Fear of scarcity and shortage push markets far beyond any norm. . .

For decades, agriculture's great problem has been surplus, not scarcity. And ruinously low prices, not ruinously high ones. Farmers have complained bitterly about this, but consumers benefitted from the great abundance of grains and proteins. This week's action in Minneapolis previews a different sort of marketplace. "It's telling us how close we are to that tipping point in all commodities," said Usset, a former grain trader. "Every commodity I know would like more acres: corn needs more, soybeans need more ... durum wheat, malt barley, sunflowers, they all want a little more production."

FINANCIAL POST - The pending global food crisis is due, in part, to a rich twist of irony: One of the factors driving up the price of T-bone steak, a dozen eggs and a carton of milk is a perfectly edible vegetable, a staple of many diets --corn. Adding to the irony, we're growing more corn than ever before. We're just not eating it.

Corn is being diverted from human consumption, kicking off a domino effect of problems tied to food prices. It starts with ethanol produced from corn, which optimists hope will help solve the U.S. reliance on foreign oil, as well as provide a fuel that burns cleaner.

"The U.S. is now using more corn for production of ethanol than our entire crop in Canada," says Kurt Klein, a professor of agricultural economics at the University of Lethbridge. "It's huge."

And it is going to get bigger. In 2000, world production of ethanol totalled 20 billion litres. In 2007, world production climbed to 60 billion litres. In the month of January alone, six billion new litres of ethanol were produced in the United States, Mr. Klein says. . .

This has huge implications for global food supplies. The amount of corn it takes to produce 75 litres of ethanol-- roughly a tank of fuel-- is enough corn to feed one person on a 2,000-calorie-a-day diet for a year, Mr. Klein said.



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