SubsidyEye

A Complete Guide to Agriculture ETFs

Sliman is right that sun spots have a much bigger effect on weather than global warming. But that is, in fact, what worries scientists. Currently, we are in a period of low sunspot activity, which normally correlates with cooler weather. Hence, to the extent there is a general upward warming trend caused by increases in atmospheric greenhouse gases (a phenomenon that is well documented, whether or not one believes that humans are to blame), it is being moderated at the moment by the sun's lower activity. We have no way of knowing for how long the sun will remain quiescent. But once it returns to more "normal" sun-spot activity, the world could be in for a big and rapid rise in average temperature.

A Complete Guide to Agriculture ETFs

ETF Grind: sorry if I sounded critical of your simple message, but since you said that "the reasons [for rising prices in the long run] may be surprising" seemed to suggest you were going to provide new information. A decade ago, the FAO was already predicting increased demands for livestock feed bcause of increases in global per capita income.

Is growing wheat organically "just a waste of resources"? Plant breeders are working on developing varieties that are more naturally resistant to diseases like dwarf bunt, and the yields are not always lower:

organic.tfrec.wsu.edu/...

And at least farmers who grow organic wheat are producing for a market that pays a premium for their product (unlike producers who are producing for a fabricated market, such as for biofuels).

A Complete Guide to Agriculture ETFs

Corn prices did not peak at $5.50 per bushel in 2008, unless one is talking about average monthly prices received by producers. For consumers what matters was the price in the cash market (over $7.00) and on the CBOT (over $7.50)

www.porkmag.com/upload...

1.bp.blogspot.com/_xlG...

The reasons for the price spike are hotly debated, and while fear over a shortage of supply certainly fueled the run-up in prices, it was the sharp increase in demand -- fueled by ethanol subsidies and mandates in the United States, and subsidized biodiesel in Europe -- that was the more fundamental factor.

This article is not telling us anything that anybody even remotely clued into what is happening in agriculture have known for at least a decade: that it is the composition of demand that is the bigger driver than an increase in the numbers of mouths that must be fed. It has also been clear for some time that water (exacerbated by climatic changes) is a limiting factor.

The author of this article is too dismissive of organic agriculture, however. Organic agriculture, as marketed to relatively wealthy consumers in the west, accounts for a tiny fraction of the land undercultivation. Virtually no feed corn is grown organically. The crops that are under organic cultivation tend to be those for which the switch to organic methods is easiest and most profitable. Many crops (especially spices in the tropics) were already being grown without purchased chemicals in any case. The world need not fear organic agriculture. It will increase, for sure, but only where farmers see it pay-off: through improvement in their own bottom line, and through the advantages they see in longer-term soil fertility and yields.

Finally, the authors of this article should know better than to blame environmentalists for the corn-ethanol debacle. That bandwagon got rolling in the late 1970s, pushed by Big Ag (mainly ADM) and powerful corn-state senators. Environmentalists briefly embraced the product (from about 2003-2006), but as soon as they saw its dark side they abandoned it wholesale. Nowadays, corn-ethanol's fiercest and most effective critics come from the environmental community.