The Age reports that Japan is facing butter shortages, as rising agricultural commodity prices cause havoc - apparently even in rich countries.

Japan's acute butter shortage, which has confounded bakeries, restaurants and now families across the country, is the latest unforeseen result of the global agricultural commodities crisis. A sharp increase in the cost of imported cattle feed and a decline in milk imports, both of which are typically provided in large part by Australia, have prevented dairy farmers from keeping pace with demand.

While soaring food prices have triggered rioting among the starving millions of the third world, in wealthy Japan they have forced a pampered population to contemplate the shocking possibility of a long-term — perhaps permanent — reduction in the quality and quantity of its food.

A 130% rise in the global cost of wheat in the past year, caused partly by surging demand from China and India and a huge injection of speculative funds into wheat futures, has forced the Government to hit flour millers with three rounds of stiff mark-ups. The latest — a 30% increase this month — has given rise to speculation that Japan, which relies on imports for 90% of its annual wheat consumption, is no longer on the brink of a food crisis, but has fallen off the cliff.

According to one government poll, 80% of Japanese are frightened about what the future holds for their food supply. Last week, as the prices of wheat and barley continued their relentless climb, the Japanese Government discovered it had exhausted its ¥230 billion ($A2.37 billion) budget for the grains with two months remaining. It was forced to call on an emergency ¥55 billion reserve to ensure it could continue feeding the nation. "This was the first time the Government has had to take such drastic action since the war," said Akio Shibata, an expert on food imports, who warned the Agriculture Ministry two years ago that Japan would have to cut back drastically on its sophisticated diet if it did not become more self-sufficient.

In the wake of the decision this week by Kazakhstan, the world's fifth biggest wheat exporter, to join Russia, Ukraine and Argentina in stopping exports to satisfy domestic demand, the situation in Japan is expected to worsen. ...

"In the past, Japan was a rich country with a powerful yen that could easily buy cheap imports such as wheat, corn and soybeans," said Mr Shibata, who directs the Marubeni Research Institute in Tokyo. "But with enormous competition from the booming Chinese and Indian economies, that's changed forever. You also need to take into account recent developments, including the damage to crops caused by drought and other disasters in exporting countries like Australia," where the value of wheat exports has tumbled from $3.49 billion to $2.77 billion in the past three years.

The situation has been compounded by a surge in demand for bio-fuels such as ethanol, made from maize, encouraging farmers around the world to divert their efforts away from wheat and barley and into maize, further driving up prices.

The SMH is also following the food situation - "Dearer food unleashes 'silent tsunami'".

A "silent tsunami" unleashed by costlier food threatens 100 million people, the United Nations said on Tuesday, but views differed as to how to stop it. Aid bodies said there was enough food to go round but the key was to help the poor afford it, and urged producing nations not to curb exports to stockpile food at home.

In London, Prime Minister Gordon Brown said Britain would seek changes to EU biofuels targets if it was shown that planting crops for fuel was driving up food prices - a day after the bloc stood by its plans to boost biofuel use.

Riots in poor Asian and African countries have followed steep rises in food prices caused by many factors - dearer fuel, bad weather, rising disposable incomes boosting demand and the conversion of land to grow crops for biofuel. Rice from Thailand, the world's top exporter, has more than doubled in price this year.

Sheeran said artificially created shortages, such as those caused by countries that have slowed or stopped exports, were worsening the problem. Major food exporters including Indonesia, Kazakhstan, Egypt and Cambodia have closed their stocks to safeguard supplies. "The world has been consuming more than it has been producing for the past three years, so stocks have been drawn down," Sheeran said. "The world knows how to produce food and will do so. But we will have a couple of challenging years."

Meanwhile the government here is trying to keep food prices down by increasing competition in the supermarket sector (whether or not the arrival of Wal*Mart in Australia would be a good thing or not isn't discussed).

IN a move to drive down food prices, the Federal Government will make it easier for foreign supermarket chains such as Wal-Mart, Costco and Aldi to set up in Australia and challenge giants Coles and Woolworths. With inflation figures due today expected to show significant upward pressure on food prices, the Herald can reveal the Rudd Government will change investment rules to give foreign buyers of vacant commercial land more time to start developing it.

The price of rice hit another record today.

World rice prices have hit new record highs in Asian trade, following further concerns that export bans by top rice-producing countries are hitting supply. To compound the problem, the Australian harvest has finished with just 18,000 tonnes in the bin, well down from the 1.2-million-tonne crops of previous years.

Sunrice chief executive officer Gary Helou says this 80-year low in Australian production is having a big impact on the current world price. "In the medium grain market we have had an impact, a big impact," he said. "This medium-grain variety that's consumed up in Japan, in the Pacific, northern Asia, Middle East and Europe is only grown and exported out of Australia, California and Egypt, so the world market, expects it, needs it and relies on it.

The Times reports that US shops are rationing food for first time - though "food" should probably be replaced with "rice".

US RETAIL giant Wal-Mart is rationing rice sales to protect dwindling supplies as the global price skyrockets and producers such as Australia struggle to keep up with demand. The drastic move is the first time that food rationing has been introduced in the US.

Growing appetites in China and India, drought in Australia and pests in Vietnam have contributed to the rice shortage and soaring prices. Hoarding by Asian farmers and rice dealers has sparked clampdowns by authorities there who are worried about getting subsidised rice to the poor.

While Americans suffered some rationing during World War II for items such as petrol, light bulbs and stockings, they have never had to limit consumption of a key food item. In Britain, where Wal-Mart owns Asda supermarkets, rice is being rationed by shopkeepers in Asian neighbourhoods to prevent hoarding. Tilda, the biggest importer of basmati rice, said that its buyers — who sell to the curry and Chinese restaurant trade as well as to families — were restricting customers to two bags per person. “It is happening in the cash-and-carries,” said Jonathan Calland, a company executive. “I heard from our sales force that one lady went into a cash-and-carry and tried to buy eight 20kg bags.”

Wal-Mart said that Sam’s Club, its wholesale business, which sells food to restaurants and other retailers, had limited each customer to four bags of long-grain white rice per visit. In the past three months wholesalers have experienced a sharp rise in demand for food items such as wheat, rice and milk as businesses stocked up to protect themselves against rising prices. ...

Food prices across the world have rocketed in the past two years, driven by increased demand for corn — the grain that is fermented to produce ethanol, the biofuel. With corn a main foodstock in dairy farming, milk has doubled in price in two years.

The Wall Street Journal says Maybe It’s Time for Americans to Start Stockpiling Food. And people say peak oilers are alarmists. I might note that hoarding is the worst thing people can do, as the domino effect it has on the system just breeds panic, rising prices and more hoarding - a vicious circle we really don't need.

I don’t want to alarm anybody, but maybe it’s time for Americans to start stockpiling food.

No, this is not a drill.

You’ve seen the TV footage of food riots in parts of the developing world. Yes, they’re a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

The Washington Times (an unreliable source, but nevertheless) says Americans Are Hoarding Food as Industry Seeks Regulations - and points the finger at commodity speculators.

Farmers and food executives appealed fruitlessly to federal officials yesterday for regulatory steps to limit speculative buying that is helping to drive food prices higher. Meanwhile, some Americans are stocking up on staples such as rice, flour and oil in anticipation of high prices and shortages spreading from overseas. Their pleas did not find a sympathetic audience at the Commodity Futures Trading Commission (CFTC), where regulators said high prices are mostly the result of soaring world demand for grains combined with high fuel prices and drought-induced shortages in many countries.

The regulatory clash came amid evidence that a rash of headlines in recent weeks about food riots around the world has prompted some in the United States to stock up on staples. Costco and other grocery stores in California reported a run on rice, which has forced them to set limits on how many sacks of rice each customer can buy. Filipinos in Canada are scooping up all the rice they can find and shipping it to relatives in the Philippines, which is suffering a severe shortage that is leaving many people hungry.

While farmers here and abroad generally are benefiting from the high prices, even they have been burned by a tidal wave of investors and speculators pouring into the futures markets for corn, wheat, rice and other commodities and who are driving up prices in a way that makes it difficult for farmers to run their businesses. “Something is wrong,” said National Farmers Union President Tom Buis, adding that the CFTC’s refusal to rein in speculators will force farmers and consumers to take their case to Congress.

Bloomberg reports that World Vision is cutting back on food relief as it cannot afford soaring food costs.

World Vision International, which provides food relief in 35 countries, said it can no longer provide rations to 1.5 million of the poor people it fed last year because of soaring costs and unmet aid commitments by donors.

``Despite our best efforts, more than a million of our beneficiaries are no longer receiving food aid,'' World Vision President Dean Hirsch said in a statement yesterday. ``Around 572,000 of these are children who urgently need enough healthy food to thrive.''

Popular Mechanics has an article on producing "green gasoline" from cellulose. I'm starting to think that even next generation biofuels that meet Vinod Khosla's CLAW criteria are basically a waste of time - as population increases, any competition between fuel and food (either directly - converting food to fuel or growing fuel crops instead of food crops - or indirectly by slowly impacting soil quality) is going to be a bad thing. We're better off just migrating away from our legacy transportation fuel infrastructure and moving to pure electric transport - so we should focus on this goal primarily.

Researchers at UMass Amherst recently published a new method of refining hydrocarbons from cellulose, paving the way to turn wood scraps into gasoline, diesel fuel, Tupperware—anything, essentially, that’s normally refined from petroleum. Many scientists have been working on ways to turn everything from corn stalks to tires into ethanol, sidestepping some of the problems inherent to making fuel from corn and other food products. But ethanol has a number of liabilities, regardless of the source. For instance, it requires automotive engines to be modified and contains less energy than gasoline, driving down fuel economy.

Turning cellulose into gasoline is tricky. Unlike raw crude, which is made up mostly of hydrocarbons to begin with, plant material contains a great deal of oxygen woven into its molecular structure. “Crude oil looks more similar to gasoline than biomass does,” says George Huber, lead author of the new study. “So the challenge is how do you efficiently remove the oxygen and make these compounds that look like gasoline or diesel fuel? And how do you do it in the fewest number of steps and in the most economical way?”

Using a catalyst commonly employed in the petroleum industry, Huber and his colleagues heated small amounts of cellulose very quickly for a matter of seconds before cooling it, producing a high-octane liquid similar to gasoline. “The temperature window is very critical,” Huber says. If you heat too slowly, you produce mainly coke—elemental carbon residue. If you heat too fast, you make mainly vapors. The sweet spot, about 1000 degrees per second, transfers roughly half the cellulose’s energy into hydrocarbons. “If we can get 100 percent yield, we estimate the cost to be about a dollar per gallon,” Huber says. “Right now we’re at 50 percent. Can we get 100 percent? I don’t know. Hopefully we’ll bump those numbers up.”

Huber and his colleagues aren’t the first to derive hydrocarbons from renewable sources. Virent Energy Systems, for example, just signed a deal with Shell to produce gasoline from plant sugars and expects to open a pilot facility in the next two years. UOP is working on a project to produce jet fuel for U.S. and NATO fighters from algal and vegetable oils. But Huber’s work stands out as likely the first direct conversion from cellulose, opening up as potential fuel sources virtually anything that grows. Commercialization of the technology may take another five to 10 years, the researchers predict.

Developments in so-called “green hydrocarbons” arrive as ethanol continues to come under attack as expensive, inefficient and a contributor to rising food prices around the world. (More than a billion bushels of corn are diverted to ethanol production each year.) “There’s certainly a lot of historical inertia for ethanol. It’s gotten us off to a great start, but I can’t see the country transitioning to flex-fuel,” says John Regalbuto, director of the Catalysis and Biocatalysis Program at the National Science Foundation. “I almost think, long term, that we will go to plug-in hybrids. But we’re still going to need diesel and jet fuel—you can’t run trains or fly planes with ethanol or hydrogen.”

Technology Review has some thoughts about the strange combination of rising corn prices and declining plantings (aren't rising prices supposed to encourage an increase in supply - or have costs risen faster than prices ?) and the additional influence of ethanol mandates.

That strong wind you might have felt earlier this week was just more air rushing out of the biofuel bubble. Monday's statistics from the U.S. Department of Agriculture--that farmers expect to plant 8 percent fewer acres of corn in 2008, compared with 2007--is very bad news for the already struggling ethanol industry. It takes a lot of corn to make ethanol, and the feedstock is a major cost of creating the biofuel. U.S. farmers' plan to plant less corn this year means that record-high corn prices, which are already above $5 a bushel, will likely stay high. It doesn't take an economist to figure out what the grim numbers portend for ethanol manufacturers. Higher feedstock costs, at the same time that yet more ethanol production capacity is coming online, could mean another very tough year for the ethanol market.

Beyond being a pain for ethanol producers, the high corn prices will further exasperate the tensions between using the crop for fuel rather than for food. In a New York Times article, one expert issues a frightening warning:

"We're hoping for good yields," said David Orden, a senior research fellow at the International Food Policy Research Institute in Washington. "If we get bad yields and tight commodity markets are pushed even tighter, we'll get food prices skyrocketing, inflationary pressures and food riots in developing countries, and countries cutting off their exports."

No one knows, of course, whether it will be a good year or not for growing corn in the United States. If it is a bad year, look for even more criticism of ethanol biofuel and, in particular, the Renewable Fuel Standards that mandate that petroleum suppliers use nine billion gallons of ethanol this year. But even if it's a good year for growing corn, expect the poor profit margins for ethanol producers to continue and more grumbling about the economics of biofuels.

The SMH has an article on worldwide inflation - particularly food prices.

Governments are in for a rougher time. The rise in commodities since the start of the decade has been largely masked by subsidies and export controls. That's becoming too expensive now as prices soar and leaders have a grim choice to make: vastly increase debt levels or let the public bear the brunt. Food costs alone are a clear and present danger. In many Asian countries, Ali says, food and edible oils account for 60% of the consumer-price index. Even before recent increases, Asian families on average shelled out 50% of income on food. That portion is rising at this very moment. Economists in the US and Europe often focus on ''core'' inflation, which excludes food and energy. That's impossible in developing Asian economies. Looking at core CPI only masks what Ali calls a ''pauperizing effect'' knocking back hard-won gains in living standards.

Hence World Bank President Robert Zoellick's call last week for a ''New Deal'' to end hunger and an additional $US500 million for a United Nations food program. He also urged rich countries to cut agricultural subsidies and open markets for food imports. ...

In the late 1990s, turmoil sent economies such as Indonesia, South Korea and Thailand hat-in-hand to the International Monetary Fund for bailouts. Asian governments are now cumulatively sitting on trillions of dollars of currency reserves. That's money that can be used to buy food stocks.

For most people in the world, filling a gas tank is a choice. If speculators drive oil prices higher, you find a way around it as best you can. If gold prices surge, you buy silver. When it comes to the costs of food that can't easily be substituted, like rice, wheat, corn, soybeans, pork and palm oil, Asia has a problem. ''This inflation issue has a direct impact on basic well- being,'' Ali says. ''That's why it is so politically and socially explosive.''

The Observer has a report on the rising price of rice, predicting unrest in Asia and Africa - "Food riots fear after rice price hits a high".

A global rice shortage that has seen prices of one of the world's most important staple foods increase by 50 per cent in the past two weeks alone is triggering an international crisis, with countries banning export and threatening serious punishment for hoarders.

With rice stocks at their lowest for 30 years, prices of the grain rose more than 10 per cent on Friday to record highs and are expected to soar further in the coming months. Already China, India, Egypt, Vietnam and Cambodia have imposed tariffs or export bans, as it has become clear that world production of rice this year will decline in real terms by 3.5 per cent. The impact will be felt most keenly by the world's poorest populations, who have become increasingly dependent on the crop as the prices of other grains have become too costly.

Rice is the staple food for more than half the world's population. This is the second year running in which production - which increased in real terms last year - has failed to keep pace with population growth. The harvest has also been hit by drought, particularly in China and Australia, forcing producers to hoard their crops to satisfy local markets.

The increase in rice prices - which some believe could increase by a further 40 per cent in coming months - has matched sharp inflation in other key food products. But with rice relied on by some eight billion people, the impact of a prolonged rice crisis for the world's poor - a large part of whose available income is spent on food - threatens to be devastating.

The consequences are visible across the globe. In Bangladesh, government-run outlets that sell subsidised rice have been besieged by queues comprised largely of the country's middle classes, who will queue for hours to purchase five kilograms of rice sold at 30 per cent cheaper than on the open market.

The FT reports that Africa is now scrambling for rice supplies, causing further price jumps.

Rice prices rose more than 10 per cent on Friday to a fresh all-time high as African countries joined south-east Asian importers in the race to head off social unrest by securing supplies from the handful of exporters still selling the grain in the international market. The rise in prices – 50 per cent in two weeks – threatens upheaval and has resulted in riots and soldiers overseeing supplies in some emerging countries, where the grain is a staple food for about 3bn people. The increase also risks stoking further inflation in emerging countries, which have been suffering the impact of record oil prices and the rise in price of other agricultural commodities – including wheat, maize and vegetable oil – in the last year.

Kamal Nath, India’s trade minister, said the government would crack down on hoarding of essential commodities to keep a lid on food prices. “We will not hesitate to take the strongest possible measures, including using some of the legal provisions that we have against hoarding,’’ he said on Friday. Thai medium-quality rice, a global benchmark, traded at about $850 a tonne on Friday, up from $760 a tonne last week, while the price of less representative top-quality aromatic rice broke the $1,000-a-tonne level for the first time, traders said. They added that the grain was being sold to African destinations. In Chicago, US rice futures hit an all-time high of $20.45 per 100 pounds.

Although only a small amount of the grain is traded internationally, the rise in Thai prices signals the trend for the global market and also for domestic prices in countries where local production is enough to meet demand. The price jump came as leading exporting countries, including Vietnam, India, China and Egypt, banned foreign sales. Hanoi extended its ban for two extra months until June.

The IHT reports that High rice prices are no windfall for many Asian farmers.

It should be happy times in the radiant green rice paddies that Pomchan Luanguanna has spent more than three decades tilling: The price of his crop is soaring faster and higher than anyone can remember, and local newspapers are comparing rice, once a relatively inexpensive and neglected commodity, to gold sprouting from the black soil. But Pomchan, like many small farmers across Asia, is not rejoicing. His extended family eats more or less all the rice he harvests from his small plot. His neighbors are worse off: They put down their tools when the prices of gasoline, fertilizer and pesticides soared. "Their fields are empty," Pomchan said. In the sprawling, high-tech farms of the United States, the oil fields of Saudi Arabia and the coal mines of Australia, farmers, drillers and miners are rubbing their hands in anticipation of a continued windfall from the boom in commodity prices.

But for many rice farmers in Asia, the commodity they produce ends up as food in their stomachs, not cash in their bank accounts.

"The assumption is that all farmers are better off when prices go up," said Robert Zeigler, director general of the International Rice Research Institute in the Philippines. "The problem is that a large proportion of rice producers in the world are actually net rice buyers - they produce less than their actual needs."

Rice prices have been creeping upward since the beginning of this decade, but it was not until February that they spiked sharply. The price of Thai B grade rice, a widely traded variety, reached $795 per ton last week, an increase of 147 percent from a year earlier. "Nobody has ever seen such a jump in the price of rice," said Kwanchai Gomez, the executive director of the Thai Rice Foundation, a research center. "Certainly not in my lifetime, and that's a long time." ...

Experts say rice prices are rising because of a mix of irrational panic, weather problems - typhoons in the Philippines, a cyclone in Bangladesh, flooding in Indonesia and Vietnam - and an overall reduction in the amount of land dedicated to rice farming. There are also strong suspicions of hoarding, something that the Thai commerce minister recently encouraged before reversing himself.

Grist points to a Time article on the impact the biofuel boom is having on the world's rainforests (as long ago noted in "From Rainforest to Biodiesel". More at Celsias.

Indonesia has bulldozed and burned so much wilderness to grow palm oil trees for biodiesel that its ranking among the world's top carbon emitters has surged from 21st to third according to a report by Wetlands International. Malaysia is converting forests into palm oil farms so rapidly that it's running out of uncultivated land. But most of the damage created by biofuels will be less direct and less obvious. In Brazil, for instance, only a tiny portion of the Amazon is being torn down to grow the sugarcane that fuels most Brazilian cars. More deforestation results from a chain reaction so vast it's subtle: U.S. farmers are selling one-fifth of their corn to ethanol production, so U.S. soybean farmers are switching to corn, so Brazilian soybean farmers are expanding into cattle pastures, so Brazilian cattlemen are displaced to the Amazon. It's the remorseless economics of commodities markets. "The price of soybeans goes up," laments Sandro Menezes, a biologist with Conservation International in Brazil, "and the forest comes down."

Jamais at Open The Future has a post on "Yeats Signals" - noting some oddities occurring in the crop markets.

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

-William Butler Yeats, The Second Coming

Setting aside its religious imagery, the opening stanza of The Second Coming remains one of my favorite go-to sources for "uh oh" language in my writing.

In conversation at IFTF this morning, a reference to a profound oddity in crop markets led to the coining of the phrase "Yeats Signals," a play on the IFTF term "weak signals" (referring to subtle indicators of big changes). The profound oddity is this:

Whatever the reason, the price for a bushel of grain set in the derivatives markets has been substantially higher than the simultaneous price in the cash market. When that happens, no one can be exactly sure which is the accurate price in these crucial commodity markets, an uncertainty that can influence food prices and production decisions around the world. [...]

Market regulators say they have ruled out deliberate market manipulation. But they, too, are baffled. The Commodity Futures Trading Commission, which regulates the exchanges where these grain derivatives trade, has scheduled a forum on April 22 where market participants will discuss these anomalies and other pressure points arising in the agricultural markets.

This simply should not be happening, and yet it is. As an indicator of major instabilities in what had been structurally stable (if not always predictable) markets, it's a big one. Big enough that it wouldn't take much to imagine this as a sign of a major financial crisis in the global food market -- something with profound economic and health implications for everyone, including the rich countries. It seems to me that we've been seeing more than our fair share of Yeats Signals lately.

I'll close with an article via Cryptogon on organic farming in the US - "U.S. Farm Bill Perpetuates Disastrous Agricultural Practices: There Is Another Way".

Like his neighbors, Matthew did just fine last year, but he did it without growing a single ear of corn, and that’s where his family’s story begins to diverge from that of the other farmers. “I’ve got a philosophical problem with growing corn. Most corn goes to livestock. I prefer to feed grain to people, and I prefer for cattle to eat grass.” He also has practical reasons. “I hate to cultivate. We’ve got rolling land. We’re always dealing with erosion problems. In Iowa, they have four feet of top­soil. We have four inches. Besides, I can’t use pesticides.”

In this bastion of industrial agriculture, where people are quick to tell you that heavy machinery, synthetic fertilizers, pesticides, genetically modified seeds, and the federal safety net make farming possible, Matthew’s family has gone back to an old-fashioned, diversified, organic family farm. While Congress, President Bush, and lobbyists are trapped in a vitriolic debate about capping subsidy payments to the nation’s richest farmers, the Stiegelmeiers are asking a totally different question: How do we use the land?

Matthew sits at the head of the supper table next to his wife, Danelle, and his baby girl, Katya. His brother and four sisters squeeze along the sides of the table, which is used for meals, school lessons, and prayer. Emily, the matriarch, sits with her back to the kitchen.

The meal comes entirely from the farm: hamburger from a steer, a salad of organic peppers, tomatoes, and basil. Steamed kale. Cheese and butter from Rachel’s dairy cow. Homemade bread.

Emily, originally from Pennsylvania, didn’t have much interest in organic farming in college. Back in the ’70s, Cornell was preaching the industrial model, and she came slowly to the idea of sustainable agriculture. After college, she joined the Peace Corps and met Jim Stiegel­meier, her future husband and a fellow volunteer, in the Philippines. They came back to Walworth County to farm.

Grandpa Milton gave land to his son and his new bride, and they tried industrial agriculture. But Jim hated the farm program, thought it made farmers dependent on the government. “Grandpa Mil­ton thinks Roosevelt walked on wa­ter,” Matthew offers. “Daddy thought he was a Communist.” Most of all, Jim hated pesticides. Several times in the late ’60s and early ’70s he got sick from them.

“One night at dinner, my sister-in-law told him, ‘I don’t see how you can be a Christian and put poison on food.’ That was the clincher,” Emily remembers. It was the early ’80s. Jim and Emily converted the farm to organic. They home-schooled the children and put them to work. “I’d rather sit on a tractor than in front of a computer,” Ben insists.

Jim and Emily turned the logic of the farm program upside down. Instead of planting one or two commodity crops and accepting whatever price the elevator offered, they went looking for organic processors who, ideally, would lock in a premium before they planted. Matthew shrugs. “Why put a crop in the ground that no one wants to pay for?”

The Stiegelmeiers diversified into organic spring and winter wheat, flax, rye, barley, and buckwheat and relied on age-old ways to fight weeds and fertilize the soil. They certified their pastures as organic and grew alfalfa to feed a herd of registered British White beef cattle. Dan­elle started a small herd of sheep.

This past year, Matthew made $11 a bushel on winter wheat at mills in Kansas and North Dakota, at the time a four-dollar premium over commodity wheat. Organic flax sold for $19.50 a bushel, a premium of ten dollars.

Most mainstream economists and farm-state politicians look at the Stiegelmeier experiment as a quirky, barely viable enterprise in an ocean of commodity grain. But agricultural economist Tom Dobbs sees something else. A professor emeritus at South Dakota State University and a Food and Society Policy Fellow, Dobbs is convinced that the Stiegelmeier farm is a model for the future—not because it is idealistic or good for the land, which it is, but because it works on the most remote, improbable farmland in the nation. “We think of the Great Plains as a buffer. In good times, grain production should expand, in bad times contract. But with farm subsidies, instead of buffering, we have created permanent overproduction, and disaster payments just encourage production on marginal lands. What the Stiegelmeiers are doing is an entirely different approach, and they are not alone.”