Will Middle East Events Affect The Beef Market? You BetWill Middle East Events Affect The Beef Market? You Bet
September 25, 2014
Looking ahead toward the next 5-8 years, one of the wildcards regarding the beef industry and its prospects is the health status of the global economy, which is susceptible to the vagaries of world events. For instance, the resurgence this week of the war on terror makes it clear that this is a war that will be long and costly. While it’s a war we neither chose nor particularly even want to fight, radical Islam and the terrorists leave us little say in the matter.
The Middle East’s strategic importance has traditional been rooted in its oil reserves, as it provided a large portion of the world’s energy, which is the lifeblood of the global economy. However, new energy recovery technologies and the seemingly endless addition to global reserves from areas outside the Middle East have mitigated that impact to some degree.
The potential of a nuclear Iran and the rise of Islamist radicalism have created a situation where the strategic importance of the area and its potential to disrupt global commerce has been greatly magnified. The risks are real.
Both sides of the congressional aisle, and the world in general, understand that this threat is real, significant and must be addressed. Nobody has been more reluctant than President Obama to fight this war, but he has no choice. The question now is whether the war will be fought to be won, or be fought symbolically? I don’t know the answer but the impact will be real, both in terms of blood and treasure.
The U.S. remains the world’s singular military and economic superpower, and with that comes a steep burden. The bottom line, however, is that – heavily in debt as a country – we can no longer afford to fight the world’s battles and subsidize most of the world’s developed economies with our military might. It just isn’t sustainable, nevermind the dreadful cost in U.S. lives lost in such efforts.
The problem is that the rest of the world is either incapable or unwilling to share the burden. Of course, we can always count on Great Britain, Australia and Canada. Surprisingly, France appears to have come to realize the threat and has signed on to the latest effort. However, for the most part, the world has opted to accept America’s largesse and expects her to provide stability, confront evil, and serve as the global economic engine for growth.
It’s a longer-term outlook, but for the global economy and the U.S. economy to begin to move forward again, we must find a way for the world to confront this evil, and for the burden to be shared more justly across the world. A decade from now, I think the biggest determinant of beef prices will be the strength of the U.S. and global economies. That will depend not only on how effective we are in fighting this war on terrorism, but also how well we are able to share the burden of winning that war.
The opinions of Troy Marshall are not necessarily those of beefmagazine.com or the Penton Farm Progress Group.
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