Word: wheated
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...prices relatively low compared to prices in the rest of the world may, in fact, be gone forever. According to the General Accounting Office, the $1 billion sale of U.S. grain to the Soviet Union last fall was by far the biggest cause in lifting the price of American wheat by 100%, to $3 a bushel, and led to increases in the cost of flour and bread. On top of that, the GAO reports, the Agriculture Department made things worse by paying $300 million in subsidies to keep the selling price to the Russians unrealistically...
...weather caught the U.S. squarely in the middle. By May, 12.6 million acres in seven Midwestern and Southern states were inundated; 4,000,000 acres are still flooded. Some planned cotton crops were never planted. Anticipated corn yields in Illinois are down 10% from last year, and winter-wheat losses are high. Total flood damage is estimated at $409 million...
This year India may have to import as many as 6,000,000 tons of wheat. A drought has forced the closing of some Indian factories and the cutting of hydroelectric power to others. Losses are estimated in the billions of dollars...
Samples: for soybeans delivered next November, the target price is $4 per bu., down from $6.43 the day that Nixon spoke; for wheat at Kansas City in July, $2 per bu., down from $2.78. Thus, the Administration plans a market intervention of enormous proportions...
Potential Problems. The President's overall policy of détente enjoys wide bipartisan support. But there is considerable disenchantment, particularly in the Midwest, over the Administration's handling of last year's $1 billion wheat sale to the Russians. Though widely approved at the time, the sale in retrospect appears to have been a disastrous example of official mismanagement and blundering-subsidized by $300 million in taxpayers' money and a major factor in spiraling prices...