The price of a food staple -- rice -- is rising significantly, NBC11 reported.
The price of rice has increased dramatically in recent weeks due to crop failure overseas and resulting hoarding, NBC11 reported.
nd at least one Bay Area store is asking customers to hold back on their rice purchases. Costco has posted signs asking customers to follow their regular rice-buying habits.
The rice price increase is a result of a domino effect, NBC11's Noelle Walker reported. Drought in Australia led to a severe decline in rice production that in turn led the world's largest rice exporters to restrict exports. That spurred higher rice prices and hoarding in Asian countries, NBC11 reported.
Now in the United States, rice prices have skyrocketed.
Son Tran owns Le Cheval Vietnamese Restaurant in Oakland.
He said he's seen the price of rice go from $20 to $40 in a matter of weeks.
And Le Cheval's stockpiles are dwindling.
Add to that, the price of vegetables has gone up 50 percent, and some of Tran's regular customers aren't so regular anymore.
The empty tables are a new and troubling trend.
Rice isn't the only food in short supply. The unleavened bread snack matzo, popular with Jewish families during Passover, is also hard to find.
Grocers underestimated demand for the product and one of the main producers of matzo crackers had a problem with one of its ovens on the East Coast, which also shortened supplies.
I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.
No, this is not a drill.
You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.
Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.
"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)
Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.
Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.
And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.
These are trends that have been in place for some time.
And if you are hoping they will pass, here's the bad news: They may actually accelerate.
The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.
Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.
The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.
A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.
You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.
If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.
The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.
NEW YORK, April 23 (Reuters) - Wal-Mart Stores Inc's (WMT.N: Quote, Profile, Research) Sam's Club warehouse division said on Wednesday it is limiting sales of several types of rice, the latest sign that fears of a rice shortage are rippling around the world.
Sam's Club, the No. 2 U.S. warehouse club operator, said it is limiting sales of Jasmine, Basmati and long grain white rice "due to recent supply and demand trends."
U.S. rice futures hitting an all-time high Wednesday on worries about supply shortages.
On Tuesday, Costco Wholesale Corp (COST.O: Quote, Profile, Research), the largest U.S. warehouse club operator, said it has seen increased demand for items like rice and flour as customers, worried about global food shortages and rising prices, stock up.
Sam's Club, the No. 2 U.S. warehouse club operator, is limiting sales of the 20-pound (9 kg), bulk bags of rice to four bags per customer per visit, and is working with suppliers to ensure the products remain in stock.
Warehouse clubs cater to individual shoppers as well as small businesses and restaurant owners looking to buy cheaper, bulk goods.
With prices for basic food items surging, customers have been going to the clubs to try to save money on bulk sizes of everything from pasta to cooking oil and rice.
Sam's Club said the large-sized bags of rice subject to the limits are typically purchased by its restaurant owner or food service customers.
Sam's Club said is not limiting sales of flour or cooking oil at this time. Costco said some of its stores have put limits on sales of items such as rice and flour, but it was trying to modify those restrictions to meet customer demand.
Costco Chief Executive James Sinegal told Reuters that he believed the recent surge in demand was being driven by media reports about rising global demand and shortages of basic food items in some countries.
Food costs have soared worldwide, spurred by increased demand in emerging markets like China and India; competition with biofuels; high oil prices and market speculation.
The situation has sparked food riots in several African countries, Indonesia, and Haiti. United Nations Secretary-General Ban Ki-moon has warned that higher food prices could hurt global growth and security.
Rice prices have risen 68 percent since the start of 2008.
Trade bans on rice have been put in place by India, the world's second largest exporter in 2007, and Vietnam, the third biggest, in hopes of cooling domestic prices. Rice is a staple in most of Asia.
On Tuesday, Tim Johnson, president-CEO of California Rice Commission, which represents growers and millers of rice in the state, said: "Bottom line, there is no rice shortage in the United States. We have supplies."
Wal-Mart shares were up 0.4 percent to $56.80 in afternoon trading, while Costco shares rose 1.7 percent to $69.26. (Reporting by Nicole Maestri, editing by Jeffrey Benkoe and Tim Dobbyn)
Farmers and food executives appealed fruitlessly to federal officials yesterday for regulatory steps to limit speculative buying that is helping to drive food prices higher. Meanwhile, some Americans are stocking up on staples such as rice, flour and oil in anticipation of high prices and shortages spreading from overseas.
Their pleas did not find a sympathetic audience at the Commodity Futures Trading Commission (CFTC), where regulators said high prices are mostly the result of soaring world demand for grains combined with high fuel prices and drought-induced shortages in many countries.
The regulatory clash came amid evidence that a rash of headlines in recent weeks about food riots around the world has prompted some in the United States to stock up on staples.
Costco and other grocery stores in California reported a run on rice, which has forced them to set limits on how many sacks of rice each customer can buy. Filipinos in Canada are scooping up all the rice they can find and shipping it to relatives in the Philippines, which is suffering a severe shortage that is leaving many people hungry.
While farmers here and abroad generally are benefiting from the high prices, even they have been burned by a tidal wave of investors and speculators pouring into the futures markets for corn, wheat, rice and other commodities and who are driving up prices in a way that makes it difficult for farmers to run their businesses.
"Something is wrong," said National Farmers Union President Tom Buis, adding that the CFTC's refusal to rein in speculators will force farmers and consumers to take their case to Congress.
"It may warrant congressional intervention," he said. "The public is all too aware of the recent credit crisis on Wall Street. We don't want a lack of oversight and regulation to lead to a similar crisis in rural America."
Food economists testifying at a daylong hearing of the commission said the doubling of rice and wheat prices in the past year is a result of strong income growth in China, India and other Asian countries, where people entering the middle class are buying more food and eating more meat. Farm animals consume a substantial share of the world's grain.
U.S. wheat stocks are at the lowest levels in 60 years because worldwide consumption of wheat has exceeded production in six of the past eight years, said U.S. Agriculture Department chief economist Gerald Bange. Adding to tight supplies was the back-to-back failure of two years of wheat crops caused by drought in Australia, a major wheat exporter, he said.
In addition, the diversion of one-third of the U.S. corn crop into making ethanol for vehicles has increased prices for corn and other staples such as soybeans and cotton as more acreage is set aside for ethanol production.
Farmers also have raised prices because they have been hard hit by spiraling energy costs, which not only raised the price of diesel fuel to records of over $4 a gallon but drove up the cost of nitrogen fertilizer, which is made from natural gas.
"Commodity prices across the board are at levels not experienced in many of our lifetimes," said CFTC Chairman Walter Lukken. "These price levels, along with record energy costs, have put a strain on consumers as well as many producers and commercial participants that utilize the futures markets to manage risks."
The upswing in prices has been exaggerated by the massive influx of investors and speculators seeking to profit from rising prices for corn, wheat, oil, gold and other commodities. Big Wall Street firms and hedge funds have taken huge positions in futures markets that once were dominated by relatively small operators such as farmers and grain-elevator owners.
Small investors, who see fast-rising commodities as good hedges against inflation and a falling dollar, also are getting a piece of the action by investing in index funds that are tied to commodity prices.
"During such turbulent times, it is tempting to shoot first and ask questions later," Mr. Lukken said, but he contended the commission should be "cautious" about doing anything to curb speculation. He and other regulators argued that speculators add volume and liquidity to the markets, which makes them operate more efficiently and helps farmers and other players.
Commissioner Michael V. Dunn said the soaring demand for food and fuel worldwide might be leading to permanently higher food prices, both domestically and abroad.
"We may already be working under or fast approaching a new paradigm of higher agricultural prices," he said. "There is not a silver bullet or single solution to address the problems we are currently facing."
FARM TRADE
Federal market regulators say the soaring price of most commodities over the past year reflects increased demand rather than investor speculation.
Rice 122%
Wheat* 95
Soybeans 83
Crude oil 82
Corn 66
Gasoline 41
Gold 37
Sugar 30
Coffee 24
Milk 5
Live cattle -7
Lumber -14
* On the Chicago Board of Trade
Source: Commodity Futures Trading Commission
Wed Apr 23, 2008 7:17 pm
postcardsfrompalestine VIP
Joined: 05 Sep 2006 Posts: 1737 Location: It means good luck - a chinese symbol
KUALA LUMPUR, Malaysia - Malaysia sought assurances yesterday from Thailand, the world’s largest rice exporter, that it will continue to supply the grain amid worries over shortages and sharply rising prices.
Malaysian Foreign Minister Rais Yatim said rice supply was a key issue in a meeting between Thai Prime Minister Samak Sundaravej and his Malaysian counterpart, Abdullah Ahmad Badawi.
The leaders discussed “how to strengthen our cooperation to ensure food security in the region,” Samak told a joint news conference after the talks.
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World rice prices have risen sharply this year because of growing demand and poor weather conditions in some rice-producing countries.
In another sign of widening food crisis fears, Sri Lankan police raided shops believed to be hoarding rice, an official said.
The government intends to prosecute the traders with penalties of up to six months in prison, R.M.K. Ratnayake, secretary to the trade and consumer affairs ministry said yesterday.
Sri Lanka’s ongoing civil war, which has seen rice-producing districts torn by strife, has exacerbated fears of food shortages.
"I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food," begins The Wall Street Journal's Brett Arends in an article earlier this week, Load Up the Pantry. (Yes, The Wall Street Journal!) Mr. Arends blames "the surge in demand from China and India" and "the growing demand for ethanol as a fuel additive." Both statements are correct, but miss the underlying source of the crisis.
"There is more than enough grain to feed every hungry human on the planet, but the poor cannot compete with wealthier buyers of meat and biofuels," says truthout's Kelpie Wilson, also this week, in Why More Food Is Not the Answer. Her statement is accurate, as are the facts that "it takes about seven pounds of grain to produce one pound of beef" and that "[t]he grain used to fill an SUV tank with ethanol could feed one person for a year." However, in approvingly citing a report that "indicts markets with failing to eradicate hunger and poverty," Ms. Wilson misses the root cause of the problem.
Before we identify that root problem, let's look at the crisis we face.
Food riots have occurred across the globe and are threatening governments in poor countries. Last year there were tortilla demonstrations in Mexico and pasta demonstrations in Italy. More recently, in sub-Saharan Africa, Egypt, and Haiti, people have taken to the streets demanding rice. Argentina, Russia, Ukraine, and Kazakhstan have banned the export of wheat. Indonesia, Vietnam, Egypt, China, Cambodia, and India have done the same with rice. South Korea has issued price controls on basic foodstuffs. Japan has run out of butter, and with wheat and barley prices skyrocketing, is resorting to government reserves to buy grains from overseas. In the United States, Sam's Club is rationing rice and citizens are heeding Mr. Amends' advice and stockpiling food. It has been reported that global grain reserves stand at eight to twelve weeks.
The root of this crisis lies in the fact that grains are being used not to feed people, but to feed cattle and cars. And, not surprisingly, both ideas came from the State and have been financed with State funds, confiscated, it goes without saying, from the citizenry.
How the Nixon administration dealt with a similar rise in grain costs not only informs us what approach not to take in the current crisis, but was also the fundamental cause of the current crisis. In 1972, it was Americans who took to the streets demanding government action on rising grain costs, after a grain deal with the Soviet Union fell through. Nixon's agriculture secretary, Earl Butz, was charged with the task of reducing the cost of grains by any means necessary.
(This same Earl Butz is the main villain of The Unsettling of America by Wendell Berry, the 1977 classic detailing the profound cultural consequences of Mr. Butz' imperative for farmers to "get big or get out," which led to the death of the family farm; State intervention, not the free market, led to the birth of agribusiness.)
Mr. Butz engineered a system in which massive subsidies replaced loans to American farmers, causing grain prices to artificially plummet, giving rise to the state-subsidized corn industrial complex. Corn cost less to buy than it did to grow, inconceivable in a free economy. New products, impossible if corn had been sold at its market value, were developed to make use of the artificially low cost commodity. The ubiquitous high fructose corn syrup replaced sugar and became the sine qua non of the modern American diet, leading to today's "obesity epidemic," detailed by Michael Pollan in his October 2003 article for The New York Times, The (Agri)Cultural Contradictions Of Obesity. Importantly to today's crisis, corn feed became the staple for cattle, grass-eating animals whose stomachs are not designed to eat grains. Thus, they require massive injections of enzymes and antibiotics to be able to digest what we force-feed them, a process whose consequences are described in graphic detail by Corby Kummer in his May 2003 article for The Atlantic, Back To Grass.
Hence, we now have a global agricultural system in which an artificial demand for cheap corn led to an artificial dependency on it. Thus, the "the surge in demand from China and India" mentioned by Mr. Arends only exacerbates the problem as more folks enter the middle class in those countries and want to eat meat on something more than an irregular basis.
If using corn to force-feed grazers like cattle flies in the face of reason and sound market principles, using it to fuel cars is absurd. In essence, ethanol is nothing more than the continuation ad absurdum of the same policies begun in the Nixon administration as part of its corporate welfare package to agribusiness. At least with the above examples, corn was converted into food, or, more accurately, "edible foodlike substances," to use Michael Pollan's phrase from his book In Defense of Food: An Eater's Manifesto. With ethanol as a biofuel, corn is being converted into something entirely unfeasible.
"Ethanol is so costly that it wouldn’t make it in a free market," said Walter E. Williams in an article last month for Human Events, Ethanol Hoax Spreads Economic Havoc. The economic absurdity of ethanol is made clear by the fact that "it takes more than one gallon of fossil fuel – oil and natural gas – to produce one gallon of ethanol." The only reason it is produced in the first place is that it is subsidized, and subsidized heavily, with money confiscated from citizens, while cheaper and more efficient Brazilian ethanol made from sugar is targeted with stiff tariffs.
Ethanol, like corn feed, creates an artificial, State-subsidized demand, which has caused the prices of other grains to skyrocket. The United States, once the breadbasket of the world, is still the world's major producer and exporter of grains, and its irresponsible State corporatist policies have thrown the world grain market out of whack. To use an agricultural proverb, "The chickens have come to roost." Tragically, it is the poorest of the poor in other countries, not those who put these policies into place, who are paying the heaviest price.
The Austrian School teaches us that State intervention in markets leads to often unforeseen and disastrous consequences. The global food crisis is a result of State intervention in that most vital of markets, the grain market. We may well be headed for an unprecedented global catastrophe.
Is the legacy of Nixon's corporatism leading to similar results as those of Stalin's collectivism, and bringing about an unintentional global Holodomor? Will Bush's insistence on making the great leap forward to biofuels lead to a similar catastrophe as that caused by Mao's Great Leap Forward? We pray not, but like those 20th Century disasters, the growing 21st Century Global Food Crisis has as its cause reckless State intervention in the economy.
April 28, 2008
An American Catholic son-in-law of Korea, Joshua Snyder [send him mail] lives with his wife and two children in Pohang, where he serves as an assistant visiting professor of English at a science and technology university. He blogs at The Western Confucian.
Emptying the Breadbasket
For decades, wheat was king on the Great Plains and prices were low everywhere. Those days are over.
By Dan Morgan
Special to The Washington Post
Tuesday, April 29, 2008; A01
At Stephen Fleishman's busy Bethesda shop, the era of the 95-cent bagel is coming to an end.
Breaking the dollar barrier "scares me," said the Bronx-born owner of Bethesda Bagels. But with 100-pound bags of North Dakota flour now above $50 -- more than double what they were a few months ago -- he sees no alternative to a hefty increase in the price of his signature product, a bagel made by hand in the back of the store.
"I've never seen anything like this in 20 years," he said. "It's a nightmare."
Fleishman and his customers are hardly alone. Across America, turmoil in the world wheat markets has sent prices of bread, pasta, noodles, pizza, pastry and bagels skittering upward, bringing protests from consumers.
But underlying this food inflation are changes that are transforming U.S. agriculture and making a return to the long era of cheap wheat products doubtful at best.
Half a continent away, in the North Dakota country that grows the high-quality wheats used in Fleishman's bagels, many farmers are cutting back on growing wheat in favor of more profitable, less disease-prone corn and soybeans for ethanol refineries and Asian consumers.
"Wheat was king once," said David Braaten, whose Norwegian immigrant grandparents built their Kindred, N.D., farm around wheat a century ago. "Now I just don't want to grow it. It's not a consistent crop."
In the 1980s, more than half the farm's acres were wheat. This year only one in 10 will be, and 40 percent will go to soybeans. Braaten and other farmers are considering investing in a $180 million plant to turn the beans into animal feed and cooking oil, both now in strong demand in China. And to stress his hopes for ethanol, his business card shows a sketch of a fuel pump.
Across the Red River and farther north, in Euclid, Minn., Don Strickler, 63, describes wheat as "a necessary evil." Most years, he explained, farmers lose money on it. Still, it provides conservation benefits and can block diseases in soybeans and sugar beets when rotated with those crops.
Wheat's fall from favor, little noticed when it was cheap, has been long coming. Though still an iconic symbol of American abundance -- engraved on currency and praised in song -- the nation's amber waves of wheat have been increasingly shoved aside by other crops. The "breadbasket of the world," which had alleviated hunger and famine since World War I, now generally supplies only a quarter of world wheat exports.
U.S. farmers are expected to plant about 64 million acres of wheat this year, down from a high of 88 million in 1981. In Kansas, wheat acreage has declined by a third since the mid-1980s, and nationwide, there is now less wheat in grain bins than at any time since World War II -- only about enough to supply the world for four days. This occurs as developing countries with some of the poorest populations are rapidly increasing their wheat imports.
Driving south from Grand Forks, N.D., on a freezing spring day, a motorist travels through a landscape that looks like a scene from the movie "Fargo." Mile after mile, fence posts rise from the snowy fields on each side of the ruler-straight highway. It looks like classic wheat country. But come summer, much of it will turn green from corn and beans.
"Last summer it looked like Iowa around here," Braaten said.
Science, weather, economics and farm policy have all played a part in the changes.
U.S. wheat yields per acre have increased little in two decades, partly because commercial seed companies have all but abandoned investments in improved varieties, preferring to focus on the more profitable corn and soybeans. Subtle warming changes in the climate and the recent availability of new plant varieties that thrive in cold, dry conditions have pushed the corn belt north and west.
In 1996, Congress gave a strong nudge to these changes by passing legislation allowing wheat growers for the first time to switch to other crops and still collect government subsidies. The result is that farmers received federal wheat payments last year on 15 million acres more than were planted.
"Every year now, we're in a battle for acres," said Neal Fisher, administrator of the North Dakota Wheat Commission. "We have a lot on our plates as we try to manage the challenges that wheat faces."
"If our comparative advantage is corn and soybeans and Russia's is wheat, having these shifts occur over time is not the end of the world," said Edward W. Allen, a senior economic analyst at the Agriculture Department.
But in the long run, said USDA wheat analyst Gary Vocke, "The forces leading to the trends are still in place." Though supplies may rebound, he and other experts doubt that prices will drop to prior levels.
That poses serious concerns for countries that historically have counted on the United States to have inexpensive wheat on hand to cushion shocks.
A Run on American Grain
The U.S. government stopped holding large stocks of wheat in the 1980s, but the United States, nearly alone among wheat producers, allows countries to shop here even when others have shut off exports.
This free-trade policy resulted in a run on the 2007 U.S. wheat crop this year by foreign buyers taking advantage of the favorable dollar exchange rate to stock up, even as Ukraine, Argentina and Kazakhstan blocked exports.
"It was a perfect storm," said Jochum Wiersma, a grains specialist with the University of Minnesota.
Problems started last summer with poor European harvests and a disappointing winter wheat crop in the southern Great Plains. U.S. prices moved above $7 a bushel, then crossed $10 after Australia harvested yet another drought-damaged crop in December. As supplies of wheat ran low, foreign countries began grabbing limited stocks of premium wheat from the northern plains -- the variety used to make the flour for Fleishman's bagels. Morocco, its own harvest of wheat to make traditional couscous inadequate, jumped in with a purchase of 127,000 tons.
"With low stocks and a weak dollar, things fly off the shelf faster than they used to," said David Brown, chairman of the American Bakers Association's commodity task force. "There's just not enough acreage coming back into production to replenish these stocks."
The reverberations were felt from Strickler's farm to Fleishman's shop -- and far and wide across world wheat markets. When Strickler checked his records recently, he found he had sold 850 bushels, about a truckload, for a record $20 a bushel. That's a receipt he plans to frame and hang on his wall.
But the same events put a squeeze on Vance Taylor, general manager of North Dakota Mill, the huge state-owned flour mill that looms over Grand Forks. Taylor's mill processes the spring-planted wheat grown along the Canadian border and prized by bakers of bread, bagels and other premium flour products. This spring wheat is high in protein and gluten, which helps breads rise and imparts texture. Among the mill's products are the bags of Dakota King flour that Fleishman uses to give his bagels their special chewy quality.
Suddenly Taylor couldn't find enough wheat. On Feb. 4, the state's Industrial Commission, headed by the governor, approved a rare waiver allowing the mill to buy spring wheat from Canada if needed. But in late March, the commission rescinded the waiver, which was highly unpopular with U.S. farm organizations. That left Taylor with a shortage of 1 million bushels before the August harvest. Since then, he said, he has found enough domestic wheat to get him through.
But prices rose rapidly down the supply chain.
"We raised our selling prices after the flour mills raised theirs," said Ted Lentz, president of Lentz Milling of Reading, Pa., which distributes North Dakota flour to bakeries from New York to Virginia. "Some of our baking customers have reduced their flour purchases up to 20 percent because of the higher prices."
A Return to Wheat?
Whether 2008's high prices will lure many farmers back to wheat is still a matter of debate.
The ethanol boom, in particular, is providing strong incentives to keep former wheat acres in corn. Within a year, Braaten will be able to truck his corn to three modern ethanol refineries, one already built and two others near completion. These huge distilleries will need corn from an area about the size of Rhode Island, and many of the acres will come at the expense of such traditional crops as wheat and sugar beets.
Corn has even begun to make inroads in the western part of the state, where sparse rainfall and the short growing season traditionally have ruled out most crops except wheat, barley and oats. Spurred by the availability of cheap coal for power and a local cattle industry that will buy the dry byproducts for feed, a new ethanol plant opened last year in Richardton, west of Bismarck, the capital.
"There's getting to be more and more corn all the time," said Clark Holzwarth, the refinery's commodity manager.
At current prices, farmers like Braaten can make more money from an acre of corn than from an acre of wheat, according to North Dakota State University economist Dwight Aakre. But wheat's biggest problem is susceptibility to disease, which has turned many farmers against it.
They remember the 1990s, when fusarium head blight, commonly called "scab," devastated successive wheat crops. After that, many farmers switched to new varieties of hybrid corn and genetically modified soybeans.
These seeds are protected by patents and licensing agreements, requiring farmers to buy a new batch each year. That produces strong financial incentives for the companies .
Research might solve many of wheat's problems, but commercial companies say the opportunities for profit are limited. In 2004, Monsanto, the world's largest seed company, shelved its research on a wheat plant that had been genetically modified to tolerate chemical weed killers.
The milling industry has been resistant to using such genetically modified wheats, so wheat plants have to be improved the old-fashioned way, by laboriously selecting those with the desired qualities in test plots. That is an expensive and time-consuming process.
Even then, there is no assurance that farmers will buy the seed year after year. That is because of the nature of the wheat plant, an unusually complex organism originating in the Middle East thousands of years ago. Unlike hybrid corn, which loses its productivity after the first year, seeds from improved wheat varieties can be saved and replanted for several years without significant loss of yield.
Syngenta, a large seed company, is still working to develop improved wheat, but Rob Bruns, who heads the North American cereal seed operation, acknowledged that it's difficult to create "enough critical mass to pay for the higher tech investments."
The upshot is that most wheat research is now consigned to public colleges with limited amounts of federal and state funds.
At North Dakota State University, wheat breeder Mohamed Mergoum helped develop Glenn, a new wheat based on a cross with Chinese plants. "It's a joy to make a difference in the life of the growers," said Mergoum, who worked earlier in the international program that developed higher-yielding "green revolution" wheats.
Glenn has proved resistant to scab, but it hasn't achieved universal acceptance among farmers.
Strickler, the farmer in Euclid, Minn., gave it a try one year but stopped using it after finding that a lot of the kernels cracked when they were separated from the chaff during threshing. As he sees it, Glenn is another example of how devilishly difficult it is to develop positive new traits in wheat without other problems arising.
James A. Anderson, a plant breeder at the University of Minnesota, predicted that the seed companies will continue to make inroads in wheat country with new kinds of corn and soybeans.
"They've definitely moved into the spring-wheat region with dedicated breeding," he said. "They're trying to get whatever acreage they can and sell more of their seed."
These developments suggest that the days of a bagel for less than a buck may not return to Bethesda anytime soon. Though prices have dropped from their March high, Fleishman is still paying close to $50 for a bag of flour.
"I feel helpless. I go with the flow," he said recently at his store. He is getting ready to change his menu boards to reflect a new price: probably $1.10.
He is not happy about it. "There's a psychological barrier, and a certain segment will be resentful," he said. "They'll get angry and feel gouged. People don't understand about food prices."
Morgan writes for The Washington Post on contract and is a fellow at the German Marshall Fund, a nonpartisan public policy institution. Staff writer Jane Black contributed to this report.
Too many new articles to post. But a Google News search of 'food riots' today gave me 9,796 results, which is a HUGE jump from the high point of about 3,000 a couple of weeks ago. I can't tell if more stories are being written about the riots or if there are more riots.
