One of the most successful and long running television programs is The Price is Right. First broadcast in 1956, the show has contestants compete to win cash and prizes by bidding on the pricing of the merchandise.

The original program involved four contestants bidding on expensive products, doing so in the manner of auctions, except that the host Bill Cullen did not act out the role of auctioneer. Contestants tried to bid closest to the product’s actual retail price without going over that price.

After a set round of bids, the contestant whose bid was closest to the correct value of the prize – and had not gone over that value – would win it. At the end of each edition, the contestant who had won the most by dollar value was declared the winner and became the returning champion, entitled to play again in the next edition. This version of The Price Is Right ended in 1965.

Revived in 1972, the new version featured four contestants placing a single bid on an initial product in dollars only, as the production company rounded off all retail prices to the nearest dollar. The contestant who bid closest to the product’s actual retail price without going over then got to play one of several mini-games, for an additional and more substantial prize or group of prizes. One contestant, through various elimination formats, could find himself winning a large showcase of prizes at the show’s conclusion by predicting the total price of a “showcase.”

To this day, this program remains one of the highest-rated game shows on television. American farmers are playing their own version of The Price is Right as they try to guess how high commodity prices will go. While they hope to be big winners, these high prices could cost U.S. agriculture a lot.

A number of factors have come together to produce the bull market that we have in corn, soybeans and wheat. Last spring a major drought cut the Russian wheat crop by one third; a dry and hot summer reduced the size of the U.S. corn crop in 2010; and dry conditions are hurting the South American crop in 2011.

At the same time, demand for corn from both the export market and the energy market have reduced world stockpiles to record low levels. This has sent commodity prices soaring. So far, all of this has had little impact outside of the agricultural economy. But all that could change in 2011.

Historically, when supplies were low, high prices gave farmers the incentive to maximize production. This year, however, that scenario may not work. This is because the price of most major crops is up. Cotton, soybeans, corn, wheat and others are all at record or near record high levels.

The market is in a battle to try to buy increased acres for each of these crops. The problem is we just don’t have enough land to do the job. Purdue Ag Economist Chris Hurt predicts that we will not have enough acres planted this spring to replenish the stocks of corn and soybeans. This means high prices will continue well into 2012.

What really worried Hurt, however, is what will happen if we have any kind of production problems in 2011. Delayed plantings in the spring, dry conditions this summer or problems at harvest - any one of these could cut production enough to send prices even higher and causing world food problems, according to Hurt.
Professional fearmongers have already been filling the press with stories of food wars and mass starvation. While these predictions are overly dramatic and overly reported, the fact remains there is a dark side to the rosy profit picture for agriculture.

Hurt said a U.S. production shortfall is a production shortfall for the world. Third World nations will be the first to feel the impact of sharp spikes in food prices. Photos of starving children in Africa or Asia will quickly have the American public and political leaders turning to agriculture and asking why.

Hurt fears that support for biofuels could evaporate in this kind of atmosphere.
The current Renewable Fuel Standard (RFS) mandates a certain amount of grain be used for energy. No such law exists saying a certain amount of grain must be used for food.

This position may be hard to defend in a world facing a food shortage.
Now before you start calling me a “Chicken Little,” let me stress that I am not predicting this will happen. I remain confident that the American food production system can and will meet the world’s demand for food, fiber and fuel.

But, as we bask in the great prices and profits being enjoyed today, let us keep an eye on those dark clouds on the horizon. Let us hope the price is right for both the producers and the consumers of world’s food supply.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Gary Truitt may write to him in care of this publication.