Not much it seems. With all this waving of gas curtailments, embargoes and such, a flashback for us as to what market interference did to Americans four decades ago. It's scary to think we Americans will again be muscled this time into subsidizing the energy needs for the euro zone.
Rising energy costs for us - - as did grains in the 1970s - - will send our own domestic prices through the roof. Remember energy is used for everything. Just as we feed grains to our livestock besides kneading bread dough, we use energy for other things besides gas for our cars.
With our agriculture now nested in the corporate farming cabal, we will be at their mercy without having available the family farmer.
The "Russian wheat deal" generally refers to the July-August 1972 sale by the United States to Russia of about 440 million bushels of wheat for about $700 million. The Russians had previously bought a relatively small quantity of U.S. Agricultural Products.[1]
Rising energy costs for us - - as did grains in the 1970s - - will send our own domestic prices through the roof. Remember energy is used for everything. Just as we feed grains to our livestock besides kneading bread dough, we use energy for other things besides gas for our cars.
With our agriculture now nested in the corporate farming cabal, we will be at their mercy without having available the family farmer.
The "Russian wheat deal" generally refers to the July-August 1972 sale by the United States to Russia of about 440 million bushels of wheat for about $700 million. The Russians had previously bought a relatively small quantity of U.S. Agricultural Products.[1]
U.S. grain exporters benefited heavily from the deal, dividing among them a $300 million taxpayer subsidy.[2]
Since the beginning of the 20th century, there have been several periods of dramatic crop price increases in the United States, including those experienced during the two World Wars. Two periods of rising agricultural prices are of particular interest, the early 1970s and the mid-1990s. Both periods saw record-breaking prices of at least two of three principal field crops—wheat, corn, and soybeans—and the price increases were sustained for two or more consecutive years. Each period was followed by declines in prices as the conditions that prompted the rapid increase in prices were reversed.
Wheat, corn, and soybean prices began rising rapidly in 1971. Prices peaked and reached record highs in 1974 and then declined, settling at a higher level than during the 1960s. Prices for most crops again started to climb slowly in 1990 and escalated rapidly beginning in 1994, peaking in 1995 (corn and wheat) and 1996 (soybeans) before declining sharply. While the increases in this period were not as dramatic as those in the 1970s, corn and wheat prices reached record levels.
Immediately after the sale, the price of wheat began to rise dramatically, and the price of U.S. commodities in general followed. The U.S. General Accounting Office released a report in July of 1973 saying that the sale had been mishandled and helped push food prices up, and that taxpayers paid unnecessary subsidies. The GAO said that Russia would have paid higher prices for the grain, reducing the subsidies paid to grain companies, and that farmers did not profit from the wheat deal; only exporters did. [3]
The 1971-74 price surge also coincided with a major depreciation of the U.S. dollar. In 1971, the United States, lacking sufficient gold reserves to defend the dollar’s fixed exchange rate, removed the dollar from the gold standard and began its transition to a floating exchange rate, finally realized in March 1973. This shift resulted in a persistent depreciation of the U.S. dollar against other major currencies, and, by the end of the decade, the dollar’s value had fallen by nearly 30 percent. The declining value of the dollar made U.S. products more competitive in overseas markets, so exports and prices rose.
Then, from the August, 1983 Florence Times Daily...
The 1971-74 price surge also coincided with a major depreciation of the U.S. dollar. In 1971, the United States, lacking sufficient gold reserves to defend the dollar’s fixed exchange rate, removed the dollar from the gold standard and began its transition to a floating exchange rate, finally realized in March 1973. This shift resulted in a persistent depreciation of the U.S. dollar against other major currencies, and, by the end of the decade, the dollar’s value had fallen by nearly 30 percent. The declining value of the dollar made U.S. products more competitive in overseas markets, so exports and prices rose.
Then, from the August, 1983 Florence Times Daily...
Another major grain deal with Russia took place in 1987 under the Reagan administration, when the Soviet Union agreed to four million metric tons (147 million bushels) of American wheat. The amount represented about 8 percent of a wheat surplus of 1.88 billion bushels.[4]
References
The Russian Wheat Deal-Hindsight vs. Foresight. St. Louis Fed.
Who was the real villain in Russian wheat deal?. Rome News-Tribune.
General Accounting Office/Russian Wheat Deal abstract. Vanderbilt
NEWS ANALYSIS; SOVIET WHEAT DEAL. The New York Times.
Source marketswikiNEWS ANALYSIS; SOVIET WHEAT DEAL. The New York Times.
