Recently, Iran bought over 1 million tons of wheat from the U.S. That’s something we’ve not seen in over 27 years. In this case a drought cut the wheat harvest by a third forcing the country to look abroad. The fact that Iran had to come to the U.S. is telling us something. One analyst says that if Iran had anywhere else to go they would never have come to the U.S. They searched the world for wheat but the U.S. was the only place they could find any to buy
Markets develop their own plotline as time goes by. In the agriculture business a new plotline is developing, its fact that there are fewer and fewer option these days for importers who are looking for high quality grains. But it spaks more to a deeper issue of the emerging shortage in fertile soil. Oh yes, we are running out of fertile soil.
In fact, fertile soil – or good dirt – may become more important to land values than oil or minerals in the ground. Some say it is already on par with oil. According to the president of a U.N. fund for agriculture development says “Fertile land with access to water has become a strategic asset.
Consider rising export restrictions around the globe,which is a sort of fence keeping the goods within border India restricts exports on rice. the Ukraine halts wheat shipment altogether. The number of grain exporting countries is dwindling. At one time only Europe imported grain. South Africa produced twice as much as North America, the old Soviet Union exported grain, Africa was self sufficient, today only three major grain exporters remain: North America, Australia and New Zealand.
It should not be any surprise to find food supply at a generational low. So the scramble to secure farmland begins. Saudi Arabia, for example, is particularly at the mercy winds of global agriculture,it has little ability to produce its own food.