[Links on commodity names will show monthly price charts.]

Despite massive wheat harvests in Colorado which are leaving "mountains of wheat standing idle", world wheat prices have hit record levels with the December '07 Wheat future closing at $7.37 per bushel yesterday. For perspective, wheat was already "expensive" by historical standards at $5 just three months ago and until a couple of spikes in 2006 had only traded above $4 for two fairly brief periods between 1998 and 2006.

Soybean prices have followed a pattern similar to wheat, although they are not at 10-year highs because of the massive price spike they had in 2004.

Corn prices, while well off their highs, are still about 50% higher than their typical price range for most of the past 8 years prior to 2006.

(Part of the reason that wheat prices have recently kept climbing while corn leveled off is that corn prices started climbing first so farmers lessened their wheat (and soybean) plantings in order to plant the then-more-expensive corn. Once it became clear that that caused a higher than expected corn supply and lower than expected wheat and soybean supply, so corn prices stopped going up and wheat and soybean prices increased dramatically.]

This BBC news story explains part of the world wheat situation and why prices are rising:
http://news.bbc.co.uk/2/hi/business/6962211.stm

Since I don't have time for a very long article today, let me make my point briefly:

Most of the wildness in grain markets is caused by our irrational ethanol policy, which is little more than politicians using corn to buy votes in farm states. Ethanol is not nearly as "green" as they want you to believe, and we could get better sugar cane ethanol from Brazil if we didn't slap such high tariffs on it. Ethanol is not efficient in terms of miles per gallon, nor efficient to produce as you have to use a lot of fossil fuels to plant, harvest, and transport it. It's a boondoggle and a massive transfer of taxpayer wealth from urban areas to farms, by which I mostly mean large farming corporations.

Beyond that, the spike in grain prices then translates into spikes in meat and dairy prices, since the grain is what feeds the animals. Our ethanol policy is the single biggest culprit in the serious level of inflation in food prices.

It's time for a revolt against ethanol. Let's wipe that silly grin of Charles Grassley's face as he counts all the dollars he's stealing from all of us for a few farmers in Iowa.