Friday, May 29, 2015

What Soybean Trade Teaches us About World Trade

One in four planted rows of soybeans grown in USA is exported to China.  it is Brazil's largest single export to China as well.
Soy is central, not so much in terms of the value of its exports, which is not dissimilar to the value ofexports from the sugar-cane sector or the combined meats sector, but for the role this crop plays at a numberof different levels. In the first place, we need to consider the spatial dimensions of the crop, which in Braziloccupies some 28 million hectares, three times that of sugarcane, four times that of planted forests, and ninetimes that of coffee. Furthermore, it is combined with the planting of corn. 60% of this production is nowlocated on “frontier” lands and, in combination with cattle, has been the primary basis of regionaldevelopment in the Center-West of the country – now pushing ever further to the North (Wesz, 2014). 50%of this soy is exported as grains and a further 25% as meal. This huge regional expansion has been fuelled byChina´s demand, which has ensured a long period of high commodity prices. High levels of agriculturalaccumulation from soy production have attracted outside investments and consolidated a new model of largescalefarming in this region (Wilkinson & Pereira, 2015).
Soy is low value but takes a lot of room. it would not work without massive subsidies.  Policy makers of course assume only one possibility: stasis. "a long period of high commodity prices."  As if that will not change...  This is brilliant on the part of the Chinese.  As in the USA, get the local government to subsidize the farming and export of a deleterious GMO crop, set aside lands for the purpose,  invest in the infrastructure to export the crop, and then subsidize the exports.  In the meantime, China, as this report so often repeats, is remarkably self-sufficient in food.  Exactly, they let us run ourselves into the ground as politicians override the markets for their own self-aggrandizement, while the Chinese devote their land resources to the highest best use.

Divert California water to grow alfalfa exported to China to feed their livestock.  State policy overriding the free market.  Socialize the losses, privatize the profits.

The world can be a wicked place, and that is good to know.    Go ahead and listen politely when the bored tenured business professors drones on about "comparative advantage" but know yourself it is complete nonsense.  It is all force and fraud, but it is still tradable.  Just because you look into the abyss does not mean you have to jump in.    Look at it, note the reality, and then plot your course accordingly.

The opportunities are unlimited because the powers that be are so limited in so many ways.


Feel free to forward this by email to three of your friends.


6 comments:

Anonymous said...

Hi John,

Do you still plan to write a second book?

Anonymous said...


How will these new trade deals affect small export/import traders in the U.S.?

http://www.washingtonsblog.com/2015/05/european-citizens-much-better-informed-about-obamas-trade-deals-than-americans.html

John Wiley Spiers said...

Well, the deals are designed to privatize profits and socialize losses so they will degrade the lives of anyone in USA who has paycheck, pension or property. The deals will pass, those who are objecting are only doing so to gain a few paragraphs that benefit themselves.

Your only hope is to be self-employed and grow something too micro for them to steal, and know these people feel is if they can't have it, no one can. Ask the Vietnamese, Iraqis, Afghanis, Bosnians, Egyptians, Libyans and everyone else we 'help.'

Peace!

O... and like frankenstein, with books you never know when they will animate.... this deflation is cutting edge and needs to be in the book...

John

John Wiley Spiers said...

Well, the deals are designed to privatize profits and socialize losses so they will degrade the lives of anyone in USA who has paycheck, pension or property. The deals will pass, those who are objecting are only doing so to gain a few paragraphs that benefit themselves.

Your only hope is to be self-employed and grow something too micro for them to steal, and know these people feel is if they can't have it, no one can. Ask the Vietnamese, Iraqis, Afghanis, Bosnians, Egyptians, Libyans and everyone else we 'help.'

Peace!

O... and like frankenstein, with books you never know when they will animate.... this deflation is cutting edge and needs to be in the book...

John

Anonymous said...

Hi John

Could we see a book about economics from you? That would ve amazing! You are truly unique in your views and it makes for extremly interesting reading.

Are you seriously working on something?

By the way, im not the same poster as above.

Anonymous said...

I know you mentioned in January that you would have a new book coming out, thats why Im eager to know if thats really the case. This blog is good but I will line many of your ideas are scatterd and difficult to understand. Would love to read a book from you.