As of May, the U.S. just sold the very last of their wheat reserves. As of now the U.S. government wheat reserves are totally empty. The U.S. has no intention of replenishing these supplies until the prices have stabilized.
As a comparison, during the 80’s the U.S. had on hand about 358 million bushels of wheat. During the 90’s they decreased that to 133 million bushels. Now they are at zero.
Since the U.S. government is out of storing wheat, this leaves the private sector as the primary source. Unfortunately, (and grateful for the freedom as well) there are no minimum wheat crops to be harvested in the U.S.
As best as can be evaluated, there are just over 305 million bushels held privately and on business farms throughout the U.S. as of June of this year. That’s less than one bushel per person in the U.S. It’s also the lowest level it’s been in 60 years.
Texas has decreased their wheat crop this year by 30%.
Holdings for corn, sorghum, and rice are also at nearly zero in the U.S. Larry Matlack of the American Agriculture Movement also states that there is no powdered milk, cheese, or butter in reserve in the U.S. either. In other words, we have an entire nation living hand to mouth, much like many of the consumers in their own homes.
Now, let’s add another little twist. The Chinese crop of wheat is considered to be the largest in the world. Surely you are familiar with the fact that they are experiencing a record drought over the past year. Keep in mind that their consumption is the largest in the world as well. In spite of the rumors that China has 60 million metric tons of wheat in storage, there still is a genuine concern here. If they truly did have such amounts of wheat in stores why would they invest over 86 billion yuan to aid in the drought relief in this type of a market? Additionally, no storage of the 60 million metric tons has been verified.
Egypt’s wheat reserves are at 4.023 million metric tons—which is not quite enough to get them through 2009. They have also hit record lows on sugar, rice, vegetable and soy oil resources, and rice.
What have I been telling you? Food is your BEST investment right now—whether in your own pantry or on the market. Get it and get ready for a serious challenge, folks. As I’ve said previously, please don’t allow the years of plenty to fool you into believing that they will always be there.
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