Once inventories are worked through it will be clear that demand for needs based commodities will still be there and perhaps may move consuming countries back into stock building mode (hoarding). One commodity group that will not suffer is the foods yet the majority of Australians fail to understand this.
However given the agricultural industry's integral reliance on debt financing, farmers have never faced a tougher test. I doubt many will take the risks society has always needed us to take in the future to supply 'cheap' food and from the middle of 2009 grain production realities globally will be clearly headed for dangerous depths. No one is taking risk because third parties who usually supply the credit are cutting the lifeline off. This is not like previous deflationary sumps where you had to overproduce just to make ends meet. Now you simply can't because no lenders in volume are willing to take on risk.
The highly likely risk of an unfolding food stock tank and likely hyperinflationary move in 2009 is largely being ignored and it is a shame because you all eat ...
