Mike,One way to solve the trade deficit is to buy your own goods and give the crap away. Seems like Bubba feels like he is missing out on the action in the currency and futures markets. First the Yen now wheat. Or is he just trying to outdo the old lady (Hillary's killing in Pork Slim). Good thing I got out of my short wheat positions last week,but I,am still short corn. Monica where are you,you are badly needed at The White House!!!!<G> What do you think of this: Thanks MP
U.S. to buy surplus wheat, donate abroad, to boost prices
LITTLE ROCK, July 18 (Reuters) - The U.S. government will buy $250 million worth of surplus
wheat and donate it to hungry countries to help shore up falling U.S. crop prices, President Bill Clinton
said in his weekly radio address on Saturday.
The president said the government will begin in the next few days buying more than 80 million bushels
of wheat (2.5 million tonnes). The action, he said, could boost depressed prices for the crop by as much
as 13 cents per bushel, or about five percent.
The wheat will be donated to Ethiopia, Sudan, Eritrea, North Korea and Indonesia. U.S. officials said
those countries have been battered by economic crises, drought or war and are unable to feed themselves
or buy wheat commercially.
''With the economic crisis in Asia weakening some of our best customers for farm products, and with
strong world crop production bringing prices down, and with farmers facing floods and fires and drought
and crop disease, our farmers face a difficult and dangerous moment,'' Clinton said.
The address was recorded on Friday evening during a visit by the president to his native Arkansas.
Clinton said he was taking steps to enhance a ''safety net'' under new U.S. farm legislation, which he
reluctantly signed in 1996. The legislation did away with traditional subsidies linked to crop production and
replaced them with guaranteed payments that decline over time.
''Sooner or later prices were bound to fall so low that we would need that safety net. That day has
come,'' Clinton said.
''America's farm families face a crisis, and we have an obligation to help.''
Overall, the income of American farmers has been forecast to drop five percent this year to $52
billion, reflecting the global grain glut and the problems caused by the Asian economic crisis.
It would be a far cry from 1996 when income crested at $60 billion on depleted stockpiles worldwide.
Income averaged $53.2 billion annually in the first half of the decade.
The White House said the purchase announced by Clinton would amount to about $250 million worth
of wheat with transportation costs included. Wheat prices closed on Friday in Chicago at $2.66 per bushel
for July wheat futures contracts, down from $3.29 a year ago.
The prospects for a record soybean harvest and near-record corn harvest this year portend continued
weak prices, the White House said.
Earlier this week Clinton signed into law a measure that exempted farm export credits from
congressionally-mandated sanctions imposed on India and Pakistan for conducting nuclear tests.
The Senate this week also adopted a $500 million plan to aid farmers who experience repeated crop
losses, a measure House Speaker Newt Gingrich later said he was inclined to also support. He also
proposed legislation to speed up $5.5 billion payments farmers are to receive under the existing farm bill.
But the Republican-dominated Senate rejected, on a party- line vote, Democratic proposals for hefty
increases in harvest- time crop loans to farmers that was the first major challenge to the 1996 farm bill.
In his radio address, Clinton reiterated his call for more generous credit and crop loan terms for
farmers. He also urged in his speech that Congress approve stalled funding for the International Monetary
Fund as a way to bolster the purchasing power of countries receiving IMF support.
Agriculture Secretary Dan Glickman told reporters in Washington the purchases announced by Clinton
may be followed by more as needed to cut stockpiles, and could be expanded to other surplus
commodities.
Brian Atwood, administrator of the U.S. Agency for International Development, told reporters a total
of nine countries were under consideration for receiving food donations.
''For those of us in the humanitarian relief and emergency food business, this has been one of the
worst years on record,'' Atwood said.
''We have here a food surplus that is driving food commodity prices down, and overseas we have
serious starvation and famine and a real need for the food that the American farmers can produce,'' he
said.
Glickman said the purchases would not require additional appropriations from Congress. He said the
wheat purchases could also help boost prices for corn.
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