We are now reaping the unintended consequences of legislation, signed by former President George W. Bush which required 40 percent of the U.S. corn harvest to be slated for ethanol production, and for massive subsidies to make corn economically viable.

Coming off the third-highest corn harvest in U.S. history in 2010, the carryover (unsold corn still in the elevators) is a bare two weeks’ worth of grain at current and projected usage rates.

This is precariously low, the lowest in modern history. The only time the carryover was lower was in the 1930s —during the height of the Dust Bowl.

This year however, could be a bad year; much of the corn in the eastern cornbelt is late getting into the ground, and from west Texas into Nebraska we’ve got the worst drought in 40 years. Parts of western Kansas have gotten no more than a quarter-inch of rain since the beginning of the year. This means the corn stocks could slip still lower.

Now imagine we have to start importing grain. Suddenly Brazil or Argentina is setting the price, not us. Once you become a net importer of grain, you cease to be a world player in agriculture.

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