U.S. Poultry and Swine Consortium Makes Massive Grain Purchase

A consortium of poultry and swine producers have ordered between 100,000 and 200,000 tonnes of feed-quality wheat from Canadian suppliers. This purchase is an excellent example of an organization that can invest in food because it can take delivery of the goods, and has a good reason for both obtaining and storing them.

As I have recently pointed out on this site, if the hammer falls on speculators, the people primarily at risk will be those bidding up the price of food or energy supplies who can in no way receive the goods they temporarily own, but who are merely placing bets in the hope of improving their own bottom line, to no one's benefit but their own.

On the other hand, importing wheat -- feed-grade or otherwise -- is the kind of action the U.S. government is only apt to applaud.

Incidentally, if your business relies on large purchases of food or fuel, and you have the cash, you should already be weighing very seriously the risks posed by this Friday's "Day of Rage" that some activists are attempting to launch in Saudi Arabia. Given the demonstrations and revolutions across the Middle East, even if the Saudis treat this event with a yawn, the larger dynamics overshadowing Mideast oil production appear very risky at the present time.

Combine this situation with the reported drop of 14% in global oil production (or at least of the 90% of production being discussed in the JODI figures by APEC, the IEA, the UN and OPEC) and, well... you weigh your entire operation very carefully. I personally would be considering how to operate my business in a world with significantly less oil in the very near future -- perhaps dramatically less in your country.