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The world has been obsessed with oil prices. That’s as it should be, but it is clearly time to make room for an additional obsession. Corn prices closed above $7 a bushel Wednesday for the first time. The reason was that unusually wet weather damaged the American crop, and U.S. corn production was forecast to fall about 10 percent. Declines were expected, but not of this magnitude. Corn has risen 75 percent in the past year, while rice, wheat and soybeans also reached records.
There have been many theories about the reasons for oil price rises, ranging from the price of the dollar to conspiracies among speculators. The problem with these theories is that while they might explain oil, they do not explain commodity prices. The price of corn has risen not because there are speculators — although there surely are — but because of crop damage (among other factors).
What we are facing are dramatic increases in the prices of strategic commodities. A strategic commodity is one that is indispensable for a society in the short term. There are many commodities that we can substitute readily or do without. There are many commodities that we can put off using. But there are some commodities that are indispensable. Food is obviously the first strategic commodity, with grains constituting the foundation of all other foods save seafood. Oil is strategic but secondary. You can last without food for a few days, but you can manage without oil for a few weeks. Still, in the end, lack of either can wreck a society — or a life, for that matter.
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