|
| The Nixon embargo was in fact due to great consumer pressure (Carol Foreman) & a near uprising by feeders (soy meal prices) and the fact we'd sold more soybeans than were in the bins. Grain, prior to recent rail changes, moved from the Northwest to the Southeast & I recall soybeans, for a period of time, were shipped west out of chicago..suggesting things were pretty tight. The Ford Embargo dealt with a frost & temporary sales shut off to Russia..The Peanut Roller embargoed grain sales to the Soviets due to their aggressive activity in Asia. I had a late dinner with John Connally & his son Mark on the evening of the Peanut Roller embargo & John was late in arriving from DC & was hopping mad....he indicated the Peanut Roller & immediate staff put the embargo in place without any discussion or whatever with Congressional leadership or the usual key string pullers behind the scenes. It was a total surprise & some key & powerful folks were not happy. The Peanut Roller embargo required reimbursement to exporters & was pretty expensive in total.
Our current President indicates he wants to increase exports. The Fed and the Administration want asset inflation & a cheap dollar--the consumer is screwed. We are the largest debtor nation which was not the case during any previous embargo. It would be a tricky decision to halt exports.
We have all heard the phrase "this time it is different" always followed by disappointment. However, in the current situation I believe things are different in one respect. The currency is being debased. In addition to the supply-demand situation more bushels will be required to pay for inputs this next season than last season. Brazil & Argentina are going to guard their corn inventories closely (control the export licenses without declaring an embargo) & we will see increased acreage from those areas. I expect we will enter a price bubble & at some point prices will drop like a stone but our price lows will hold at a higher price level.
If you add up DDGS exports, corn gluten exports & corn exports (DDGS is rapidly consuming the oil meal share of exports) more and more acres of corn are going to be required. We have already rationed feed consumption in a general way with the past liquidation & the big rationing will have to come from exports & ethanol (if yields are 155).
I've long learned never to say never & I have zero trust in the current administration -if southern hemisphere weather problems should develop an&/or we face additional weather problems....everything would be on the table.
Edited by SeniorCitizen 9/25/2010 20:36
| |
|
Real dumb question
