Friday, May 04, 2012

 

What made the Great Depression great

Great as in big, not wonderful.

It was the financial folly, it was restrictions on trade, but it really was bad in the U.S. because of the dust bowl.

Well now we have our own dust bowl.


The news on that front is suddenly not good: as the FT reports, the soybean harvest in Latin America has been badly hit by La Niña caused droughts. That doesn’t just mean a sharp increase in edamame prices at the local sushi spot and a sharp spike in tofu down at Whole Foods. For much of the world, soybeans are a primary source of protein and because they are used to feed animals, soybean price increases affect many other foods. Soybean is also an important source of cooking oil in baked goods (like bread), and this year’s spike in soy prices is made worse by rising prices for other edible oils.
The US Department of Agriculture believes that soybean production is headed for its biggest global drop ever — or at least since 1965 which is when the US started tracking global soybean production. Prices are now higher than they have been in four years, and could reach record levels later in the year.
This is really, really bad.

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