Vladimir Putin sent commodities experts reeling with the revelation that Russia, the world’s fourth-largest wheat exporter, would continue its closed-border approach to grain exports through the 2011 harvest. From our point of view, he seems to be erring almost recklessly on the side of caution, but considering the drought and wildfires Russia’s grain belt experienced, it’s tough to blame him. The country will produce only two thirds of its expected wheat output, and its people have to eat.
This would ostensibly be good news for the American wheat farmer and bad news for our flour consumers–which is all of us. But bakers are familiar with rollercoaster of flour prices. Back in 2008, in what seems like decades ago, volatile commodities prices appeared to be American bakers’ biggest economic problem. The good old days. The rough roads of 2008 provided a refresher course in resource management in a volatile market, and bakers are old salts in terms of managing the commodities pinch. It’s a good thing, too, as wheat futures are expected to be all over the map, particularly the high end, in the coming year.
But the expected tough sledding on flour and other commodities brings into focus where our food comes from, and where it’s going. The United States has its problems with hunger, but we haven’t experienced the rioting and upheaval of massive food shortages that the Third World recently underwent. And then there are quickly developing countries like China and India, whose massive populations require a staggering input of food to achieve the output of productivity they’ve recently achieved. Those economies are internally managed, and grain as anything other than food is a bourgeois extravagance.
As a comparatively mature economy, we have the luxury of allocating food resources in different ways, namely biofuels. While Russia has to eat, we’ve got to eat and drive to work and produce–corn can do it all. But it begs the question: is this the wisest use of the remarkable food resources we have at our disposal? Sometimes it takes rare moments like these, with far-away grain shortfalls resulting in surging food prices in supermarkets in Poughkeepsie or Kensoha, to help us to view our previous extravagances through the appropriate lens. Biofuels are great, but they don’t make a very good first course.
None of this is to say that discovery isn’t necessary, or that we ought not search for alternative fuel sources to wean ourselves as a country from foreign oil. In fact, it’s an altruistic and ethical goal. But as flour and food commodities spiral up in price, the market raises its voice to more firmly state what it’s been murmuring for years: It’s counterproductive to put a loaf of bread in a gas tank.