Argentina – A Drought Canary?
It looks to me like the cold weather shift has brought with it the old pattern of drought and crop failures. I suspect that this is just the beginning of a 20 year trend. Argentina also had a similar drought back in about 1914 (when the sun was in a similar low output state…) so we seem to be falling into a pattern.
Yes, it’s a combinantion of dumb governmental policy and weather, but a significant drought in Argentina is putting a big crimp on the wheat crop:
Bloomberg has a similar story, but with the added info that Egypt was complaining that Ukraine wheat was having a quality drop:
And an update:
Even the BBC is getting in on the story in a cattle oriented story:
And this guy seems to think that it’s going to be very very bad and catalogs a set of places, including Kansas, Texas, Australia and South Aftrica. Complete with a nice drought map for Argentina in the second link and lots of scary pictures:
These folks want you to sign up for the full article, but this link seemed to work for most of it:
The pattern seems to be one of droughts. I would speculate that it is perhaps because our cooling oceans do not evaporate as much water for rainfall now that the Pacific Decadal Oscillation has flipped to the cold side.
There also seems to be a fungus pathogen involved in some areas:
While these folks have a single line that implies some of the drought is hitting Brazilian soy beans as well:
Which a Google Search confirmed with a dozen interesting articles. Including one that says cocoa is impacted too:
So what do we have here? I think we have the first steps of a global food shortage caused by a long term cyclical shift of the weather cycle to a colder and dryer state. I am taking this as a long term issue, but with a short term market opportunity. So I’m buying JJG and DBA (a grain Exchange Traded Fund and a general Agriculture ETF) and probably also COW (pigs, cows, chickens).
As a longer term item, I’m updating my food storage system contents to have a fresh batch of noodles in it along with a freshening of the wheat flour (I’ve run rather low on flour). I will also use this drop of pork prices (on the swine flu panic ) to put some cans of “pork shoulder” (i.e. SPAM and the WalMart house brand knock-off of it) on the shelf as well.
It is my opinion that most folks will treat this as a 1 or 2 year local weather event and not as a 2 or 3 decade cyclical event. Thus there will not be enough preparation nor enough mitigation until we are well into the crop failures a half decade from now. We’ll see if this SWAG (Scientific Wild Ass Guess) has any accuracy as events unfold…