Are High Wheat Prices Contributing to Mideast Turmoil?
The Thursday edition of the Wall Street Journal had a front page article on how the rapid increase in wheat prices is contributing to the turmoil in the Mideast. Most of the Mideast countries consume a much higher percentage of wheat in their diet than any other countries in the world. For example, Americans consume about 177 pounds of wheat on an annual basis. People in Tunisia consume over 478 pounds and Algeria is just behind it at 464 pounds.
Most of this wheat consumption is heavily subsidised by each country’s government, so when the price is high and they are unable to keep the subsidy in place, the people get restless.
Another interesting fact is that Egypt spends almost 7% of its total annual budget on wheat imports alone. This percentage is what the USA spends on the whole Iraq and Afghanistan war on an annual basis.
Therefore, as American farmers we need to understand how it might be nice to have high wheat prices here, but it may cause other issues around the world.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
Very informative article…I don’t think people realize the global repercussions and long term impact of our short term gain (high prices).