Grain Cycles Dovetail with CA Drought Cycles Forecast to Peak in 2021/2022.
09-29-20 – This 2015 analysis focused on the potential for a vulnerable 3 – 5 year period to follow 2016/2017 – the culmination of a unique 40-Year Cycle in US agriculture and in California weather that would ‘rhyme’ with the 1930’s Dust Bowl.
During that subsequent period (2018 – 2022), cycle analysis focused on the potential for damaging ramifications – throughout California – from a 40-Year Cycle of drought. Wildfires were repeatedly discussed as an escalating threat for the 2018 – 2022 time frame. So, too, was the erosion of topsoil by multiple factors (floods, wildfires, etc.) – demonstrating that those two periods are not as different as they might appear.
Excerpt/Analysis from Dec ’15 INSIIDE Track:
California Exodus?
11-28-15 – Dust Bowl Redux?
There is always a complex challenge when analyzing cycles of this nature…it is important to at least discuss a few possibilities that could fulfill the potential for a Food Crisis… However, I want to briefly address another evolving problem that is like so many of the others – manageable for years & years, perhaps decades & decades… until it reaches a tipping point. This one has to do with the foundation of all farming (except hydroponic): DIRT.
More specifically, it has to do with topsoil. While most observers would speculate that nothing like the Dust Bowl (most damaging in 1936–1941 – 80 years ago) could occur again, it is important to remember that history resembles itself (NOT repeats itself).
During the droughts & crop shortages of the 1850’s & 1890’s, it was observed that the erosion of topsoil in the Midwest/Upper Plains (US) was a developing problem. It reached its ‘tipping point’ in the late-1930’s – re-affirming the 40-Year Cycle. Let’s review the progression of agriculture in the U.S.A.:
— ~80-Year Cycle from 1770’s to 1850’s – when crop raising evolved to the Midwest US.
— ~80-Year Cycle from 1850’s to 1930’s – when heartland of US became breadbasket of US.
— ~80-Year Cycle from 1930’s to 2010’s – when Dust Bowl prompted mass migration to California and resulted in California becoming the country’s – and sometimes the globe’s – leader in food production. (For example, 94% of America’s broccoli, 84% of our peaches, 94% of plums and majority of lettuce, carrots & celery come from California.)
— 40-Year Cycle from 1976/1977 to 2016/2017 – linking California’s worst drought to its worsening drought… and ushering in a 3–5 year period of increased vulnerability.
However, after 5 years of nearly unprecedented drought & resulting wildfires, what if El Nino brings torrential rains – as it has the distinct possibility to do – and washes away massive amounts of critical topsoil that has little vegetation protecting & congealing that soil?
Would that resemble the 80-year sequence witnessed in the Plains – from the 1850’s to the 1930’s?!
Could the late-2010’s spur a new cycle in which the agricultural industry is forced to de-centralize?
As thinkprogress.org puts it, California produces 2/3 of America’s produce (as well as 80% of the world’s almonds & 94% of canning tomatoes) but much of that – like lettuce, celery, carrots & tomatoes – could be grown in many other locations. And, until the middle half of the US became a giant monoculture, hundreds of small farms used to do just that…
As with Stock Index cycles, it usually takes multiple challenges to finally trigger a crisis. We already have years of California drought, morphing super-pests & super-bugs in the heartland and the disappearance of diversity in our food-production system. But, what could push it over the edge? El Nino flooding? Post-El Nino temperature spikes (which occurred recently, in the late-1990’s)??…
From a market perspective, diverse indicators & cycles argue for commodities (& metals) to see an initial surge in 2016 with another surge into 2019–2021.” End of Dec 2015 INSIIDE Track excerpt.
Grains have entered the crescendo of a 40-Year Cycle of Drought & 80-Year Cycle of Agriculture (leading into 2021). The potential for a Dollar decline – to drive commodity inflation higher (into at least 2021) – corroborates that. Climate/precipitation struggles for California and the Western US could exacerbate this and have been forecast to complicate matters during the final years of this major drought cycle (leading into 2021).
~11-Year, ~40-Year & ~80-Year Cycles converge in 2021/2022 and pinpoint the expected transition of natural, geopolitical and market cycles, at the same time many food/commodity cycles culminate. Inflationary cycles project surging prices in the coming year(s)… providing a parallel to the inflationary surges of the late-1970’s.
On a 1 – 3 year basis, Corn has a corroborating 3-year low (July 2007) – low (Jun 2010) – high (July 2013) – high (June 2016) – high (May/Jun 2019) – high (May/June 2022) Cycle Progression – projecting the next 1 – 2 year peak. Wheat has a ~6-year low (2004) – low (2010) – low (2016) – high (2022) Cycle Progression that is being reinforced by a ~33-month low (3Q 2016) – low (2Q 2019) – high (1Q 2022) Cycle Progression. Soybeans have an ~8-month Cycle Progression that portends future peaks in ~May ’21 & ~Jan ’22.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.