When I talk about pork - I am talking about what the supply and demand for food is doing in the world's largest food market - China. And I am saying that China is moving to a structural deficit in food production. Pork is by far the biggest meat in China - and where pork prices go - corn price follow. And where Chinese corn prices go, the price of corn in the rest of the world goes.
Your analysis of energy and food prices was correct, but what I am saying is that is beginning to change as China moves to a structural importer of food. The implication is that food prices can begin to move independently of energy prices. And this is driven by China already having much higher pork prices than the US.
What is amazing is how self-sufficient China has been for so long... the only crop it has really imported a lot more off is soybeans. But Argentina and Brazil have been able to boost supply to keep prices in check. Soybean is also a feed for pigs. From a slightly more interesting angle = soybeans could be considered a bag of water - so Argentina and Brazil have been exporting water to China.....
The cost of energy to harvest this year's crops and to plant next year's, no matter what country you look at, tells you that inflation will continue. Add in the cost of fertilizer and the failure of crops due to drought or flooding and there is no possibility food costs are going down. We are eating last year's harvest now so next year's prices will be a higher.
Yes - but I think they will also be higher next year and the year after that as policy global looks to rebalance wealth away from cities and elites to more rural and labour.
China Wholesale Pork Price. It is on Bloomberg and matched up with USDA pricing
Pork? Not petroleum?
Large farms rely heavily on petroleum to till, plant, spray, water, harvest, and transport to distribution centers.
Then the next chain takes over, driven by petroleum.
The process finishes with the consumer driving a petroleum fuels vehicle to and from the market.
Pork has little to do with this.
When I talk about pork - I am talking about what the supply and demand for food is doing in the world's largest food market - China. And I am saying that China is moving to a structural deficit in food production. Pork is by far the biggest meat in China - and where pork prices go - corn price follow. And where Chinese corn prices go, the price of corn in the rest of the world goes.
Your analysis of energy and food prices was correct, but what I am saying is that is beginning to change as China moves to a structural importer of food. The implication is that food prices can begin to move independently of energy prices. And this is driven by China already having much higher pork prices than the US.
Thanks, now I understand. It's a little disturbing to think that when China burps, the earth shakes. At least the agricultural part of it shakes.
What is amazing is how self-sufficient China has been for so long... the only crop it has really imported a lot more off is soybeans. But Argentina and Brazil have been able to boost supply to keep prices in check. Soybean is also a feed for pigs. From a slightly more interesting angle = soybeans could be considered a bag of water - so Argentina and Brazil have been exporting water to China.....
The cost of energy to harvest this year's crops and to plant next year's, no matter what country you look at, tells you that inflation will continue. Add in the cost of fertilizer and the failure of crops due to drought or flooding and there is no possibility food costs are going down. We are eating last year's harvest now so next year's prices will be a higher.
Yes - but I think they will also be higher next year and the year after that as policy global looks to rebalance wealth away from cities and elites to more rural and labour.
are you using Dalian Pork futures price for China Hog price? If not, what price are you using?
Excellent. Will you be pulling the thread on Beef Imports in China? Cheers
will do