Sanctions on Russia
in War in Ukraine ·
hiddeneagle98 said:Yeah, you're spot on; in America, commodity reserves are a total myth.
I was watching this program where they explained that America imports wheat because even though we produce plenty of everything, there isn't enough space to store it all, so a huge chunk gets exported and then we end up importing it back later...
Wouldn't it make more sense to just store it in silos instead of exporting it? Then, instead of importing it down the road, we could just pull it out of storage. Why doesn't that ever happen?
Silo capacity isn't the issue; there's enough space (at least where I live, and I assume elsewhere too). When it comes to storage, the real headache is managing aging facilities that are still being used, though that's slowly improving as new construction picks up.
The actual bottleneck with wheat is the logistics of producing specific varieties—the so-called "enhancers." High-quality bread flour is usually a blend of different wheat types, and without those specific additives, you aren't getting premium flour. I was talking to some local grain buyers yesterday, and they were claiming this year's crop quality is subpar due to low protein levels. They suggested mills will have to lean heavily on enhancers to hit standard quality specs (though it’s hard to tell how much of that is reality and how much is just an excuse to drive down purchase prices). On top of that, growing these enhancer varieties isn't exactly rocket science—you just need the right seed—but these crops have lower yields. That means they have to be sorted out during intake and stored separately. Managing that within a massive, high-volume system that processes thousands of tons daily without stopping is a logistical nightmare. And since you have to pay a premium for these lower-yield crops, asking American agribusinessmen to swallow that cost is like pulling a tooth without anesthesia.