Transcript Slide 1

Commodity Prices:
Running out of Everything
• OIL: OPEC 1973 – 74
• Gold: 1973 – 1980
• Copper, zinc, nickel, etc:
1973 – 74
• Anchovies: 1974
Anchovies?
• El Niño Southern Oscillation: ENSO.
• Cold water off Peru => plenty
anchovies.
• Warm water off Peru => dearth of
anchovies.
• Cold water off Peru => warm water
off Indonesia & vice-versa.
• So what?
Cowboys Don’t Eat Anchovies
• But cattle do, mixed in with their
feed.
• Anchovies => intense protein
input. Great for red beef.
• Anchovies scarce & expensive
=> substitutes (soybeans) used.
• Now (1974) soybeans scarce &
expensive.
Asians Like Our Soybeans
• US supply rises.
• Carter imposes embargo.
• Asians switch demand to less
expensive palm oil.
• US loses another export market.
• Well, not totally & not for good.
ENSO
• Naturally occurring phenomenon.
Irregular but never ending cycle.
• Related to monsoon, typhoons,
tropical storms, fish stocks,
Peru’s GDP, other GDPs, price of
meats & soybeans, etc.
Hurricanes
• Port of New Orleans (PONO) at the
mouth of the Mississippi.
• Largest port in USA, 4th largest in the
world.
• US Midwest agriculture exports flow
out through PONO.
• PONO not seriously damaged this
time, but there will be next times.
Katrina & Rita
• Is there something like ENSO
in the Caribbean & Gulf?
• No, but there is plenty of
warm water.
• Is all this related to global
warming?