Chinese Earthquake Shouldn't Affect Grain Markets

Diesel fuel markets could see disruption.

The earthquake in China caused great economic damage, but as far disrupting China's food production or world food markets, USDA Chief Economist Joe Glauber told reporters Monday that he didn't anticipate new demands for grain. The real problem is getting food into the earthquake area.

"I think that is very much an issue," Glauber says. "But in terms of impacting world food production, I think the impact there should be very small."

A secondary effect of the earthquake is a major increase in the use of diesel fuel to power emergency generators and bring in equipment.

"That increase in diesel is tightening up the world supplies, and as world supplies tighten diesel fuel prices are going up," Schafer says. "When diesel prices go up, that means inputs into agricultural operations, those prices go up as well."

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