What is happening with the food commodities makes no sense at all. Grain output is directly correlated to fertilizer consumption. Big crops translate to big fertilizer demand. Now the USDA and the IGC would have the markets believe that 2009 will see a similar record production to 2008. Yet the reporting season for fertilizer companies has confirmed a very significant decrease in fertilizer consumption worldover. Some residual fertilizer can be derived from soils but not for record yields.
This is triggering a debt crisis at the farm level and call me cynical but this works very nicely for the carbon sink providers (some big names set ready to pounce on land including Goldman Sachs). It must be scary times for those farmers with excessive debt loadings. Going to be a load of foreclosures occurring over the next 6 months and it will easily trigger a deflationary spiral in farm assets including farmland, all bubbles that have been based on credit essentially ...
