...my beautiful friend.

I haven't posted for a while and I've been trying to figger out why. It hasn't been blogger burnout nor writers' block nor anything like that (although I have been busy with Democrats Abroad Argentina!)

I've come to the conclusion that the only thing that has been on my mind for quite a while has been agriculture here in Buenos Aires, Argentina, and the world.

My instinct is that none of you are really interested in that ...but whenever I write about cows and campo and stuff my hits go up and I get plenty of comments. Bringing that back to mind, I post to you a bit of a digest on this beautiful late summer's day.

Here and all over the world, we've all been doing a lot of things that we would rather not do: you have been paying a lot more for food... and I've been raising a lot less cattle and much more grain. That is not going to stop for a long time.

It is being called "the end of cheap food". Unless you are elderly, you probably can't remember a long stretch of high food prices. Ever since the "Green Revolution", food has been plentiful even for the poorest of the world's people.

Famine became more a problem of war and/or logistics than the age-old plagues and drought. There have always been expensive delicacies but for more than 50 years there has also been plenty of cheap food. If you find some cheap food today... buy it and eat it and remember it; you won't regret it and you might end up with a story to tell someone's grandchildren.

Maybe you've been thinking that it's just here in Buenos Aires because of the great wealth and the great population that is concentrated here. Or maybe you think it's just Argentina and the return of inflation to an economy that has been growing as fast a China's for 4 or so years in a row. Nope, it's everywhere.

And there is no end in sight. The word "bubble" is being applied no doubt because we are and have been living through so many bubbles in the last decade. But this is fundamentally different and is also being amplified by the popping of those many bubbles: the real estate bubble has popped and has brought about the popping of the investment bank bubble which has punctured the credit bubble which is bringing about the end of the stock market bubble which is causing a commodities bubble.

Sorry to have to tell you, dearest reader, but the stuff you eat is now a commodity. It is traded like oil on the world's markets and it doesn't much matter where you live and eat. Food grown anywhere on the planet is fed into the international marketplace and into worldwide logistic supply chains. Perhaps it doesn't actually, physically move from one side of the planet to the other (often it actually does!) ...but it, at least, moves somewhere nearby to fill a vacuum created by food that has moved from another place that has moved to fill a vacuum created somewhere else... and so on: a worldwide push-me / pull-you that feeds everyone that has a dollar no matter where you are.

Grains are the most commoditized of them all... grains can be used to feed people or animals quite nicely... they are dense and heavy and can be easily and cheaply transported in huge quantities over long distances.

There are no words to describe what has happened to worldwide grain prices in the last 18 months or so. Nine months ago, I would have used the word "skyrocket". Now, I don't have a big-enough word to describe it.

I don't want to sound like the 5am Indiana farm report coming over your radio while you're waiting for the "real" programming to begin ...so I'll just use wheat as an example.

Less than 2 years ago, the price of wheat was between $2 and $3 a bushel.

About a year ago, a young commodities trader almost lost his job from predicting that today's price would be more than $7 as we speak.

Today, the price of wheat is more than $12 a bushel and has traded at times for up to $25 per bushel.

Prices are much the same for any other grain you can think of... if not, they won't be planted in the coming spring.

And that's the problem: farmers (even ranchers like the Yanq!) are looking at what they normally grow... and are making some big decisions about some big changes.

Here in Argentina, home to the vast and fertile Pampas that has helped to feed the world for more than a century, things are changing fast.

A few weeks ago, I was in a little forrajería (a place that sells all sorts of supplies to farmers and ranchers) in a small town in central Buenos Aires Province. The conversation that I overheard has haunted me ever since: an old rancher was speaking to a veterinarian about an offer he had received from a company that specializes in planting crops on other people's land.

"What am I going to do with all my cows!", said the rancher, a fine old gentleman with a rugged face and build that left no doubt as to his life's personal involvement in the outdoors environment in which he has earned his living (the saying here is: "the owner's eye fattens the cattle.") He was dressed in the usual manner for these parts: a little Spanish, a little Gaucho, a little English country gentleman.

He was truly beside himself. He had been offered (I'll skip the formula for brevity's sake) an incredible amount of money per hectare... in cash, up front, with absolutely no share in the risk... from an independent agricultural concern to plant his fine pasture (marginal crop land, according to last year's opinion) with soy, corn, wheat or whatever the contractor had in mind. An incredible, truly life-changing amount of money, especially for a man that had struggled through so many lean years to raise cattle in a thankless world.

Perhaps you can relate to him better if you can remember being offered a tremendous promotion with the salary that goes with such a thing... but required you to change everything about your life and even loved ones. Maybe you said yes... maybe you decided against it. Maybe your arm was sore for years from patting yourself on the back for making such a good decision. Maybe it turned out to be a wash or, in the worst case, a terrible decision that uprooted you and left you with nothing.

This rancher, however, looked to be about 60 years old, a seasoned country man and one that could recognize a good prospect when he saw one ...but he had never seen anything like this. (Abandoning your herd is not something any rancher can take lightly... he might not live long enough to re-establish it if the offer turned out to be a bum steer.)

We made the choice last year. We converted almost half of our cattle land to crops. We were in a different situation than the old rancher and our decision didn't have the ramifications of reducing our herd all that much. Today, however, my wife and I are pretty much in the same boat as him. We are feeling pressured to become a "hobby" ranch inside a very profitable farm and contracting much more land out.

Enough of me! Back to you!

"High prices cure high prices and low prices cure low prices", goes the old saying from my old hometown of Chicago ...but that's not gonna work on grain prices for at least a long time.

A reasonable person would be expected to comment, "If wheat prices are so gollderned high this year... that just means that farmers will plant more wheat for the next few years and the prices will come back down as the supply goes back up!"

The trouble is that there is very little land left to plant. My mother-in-law has commented for years that "folks seem to be planting even the graveyards with soy."

The push-me/pull-you in wheat is not very vigorous when confronted with the alternative options of planting soy or corn (forget beef in Argentina... there is no money in it compared to grain.) Farmers who are adventurous may consider crops other than those three grains ...but only if the price is high enough to draw them from what is considered a "sure thing".

A farmer in North Dakota recently remarked that he used to plant mustard seed on some of his land. In the face of these unbelievable grain prices, however, he stopped. This year, however, the prices offered to him to return to planting the lowly mustard increased more than 5 times. Even then, he's only considering it. If that sounds like higher prices, no matter what, for mustard ...just consider what that will do to the prices for all kinds of foods, formerly so cheap that you never even considered them. Tomatoes, potatoes, onions anyone?

The reasonable reader returns here to comment, "Don't be an idiot! Land suitable for those vegetables are simply not suited to soy/corn/wheat!" That reader is truly reasonable... and would have been astute in their observation until recently.

In the same way, however, that $100+ oil makes expensive lightbulbs and windmills suddenly a good idea... $15 soy/corn/wheat makes things look very different to the producers that have traditionally provided you with the other tasty things that make your dinner interesting.

Ordinarily, a farmer with good tomato land would not consider planting those grains. Now, however, although his yield will be much lower than the traditional great grain farmers of the world... he could earn 5 times the price per bushel than years before... like installing solar energy in your home, suddenly it starts to make sense. Some farmers will continue to produce lovely things for salad... but you can be sure that those things will be much, much more expensive.

Tomato, potato, lettuce, arugula, swiss chard farmers, may be able to switch back to their traditional crops in nothing more than a year if grain prices drop back to something approximating what we used to call reasonable... producers of animals, however, will not be so nimble. No matter that they raise their animals on grassland or in feedlots of grain, if they stop producing animals they will need more than a season to re-establish their herds and flocks. Some animals such as beef cattle need years, others not so much, but it means high prices to you whether or not they return to meat production.

Not to "bury the lede" (as is my wont) but this situation is a direct result of humans choosing to change their diets as they improve their standard of living, our need to find a replacement for non-renewable automobile fuel, and the collapse of the US Dollar and economy. (I can give you the rundown in the comments if it looks like anyone is interested.)

Don't forget that this will be good for the small number of agro-types that have been struggling to establish a living comparable to others not so necessarily involved in such life-sustaining efforts (this could be just the thing for struggling African farmers!)... but will be bad for everyone else.

You, as a consumer, can bring this into balance... in fact, consumers are the only ones who can.

If you choose to simply flow with the higher prices, however, I will enrich myself from your ennui.

If, on the other hand, you choose to involve yourself and the ones you love in this complicated issue... you will reap rewards great enough for everyone.