Tagged: food prices

Bread And Cereal To Get More Expensive

With the harsh weather in Australia, the drought in China, wheat prices are expected to go waaay up. Seems like our basic breads and cereals will see some price increases as well. This is no good.

From the Christian Science Monitor:

Everything now depends on this year’s harvest. Lowering food prices to a more comfortable level will require a bumper grain harvest, one much larger than the record harvest of 2008 that combined with the economic recession to end the 2007-08 grain price climb.

If the world has a poor harvest this year, food prices will rise to previously unimaginable levels. Food riots will multiply, political unrest will spread, and governments will fall. The world is now one poor harvest away from chaos in world grain markets.

From BusinessWeek:

Demand for wheat from Australia, the fourth-biggest shipper, is strong, said exporter AWB, as buyers from Europe to the Philippines battle for supplies amid prices near their highest level in more than two years.

From Wall Street Journal:

Prices surged to their highest intraday level since late August 2008 after the U.N.’s Food and Agriculture Organization, or FAO, said severe drought in China’s main winter wheat region could pose a serious threat to the Asian giant’s output. The reduced production comes as world markets already face supply strains, particularly for high-quality wheat used for flour.

World Bank Report Confirms: Biofuels Behind Food Price Hikes

Corn Industry Says Don’t Blame Us, Again

Here we go again. The corn industry, this time under the guise of the New Fuels Alliance and FoodPriceTruth.org, are saying that higher food prices, in particular, chicken, are NOT a result of more corn going to corn based biofuels instead of chicken feed.

Yeah, right. Same old story.

More Warnings Of Food Riots

Food Crisis, Riots, Social Unrest

As I said back in March, riots over food prices have begun. In fact, this month in Haiti, the prime minister was ousted over food-related rioting and death.

A recent NYTimes Editorial describes the current situation. Although the rise in food prices are partly a result of “uncontrollable forces — including rising energy costs and the growth of the middle class in China and India”, rich nations are making the problem worse by increasing biofuel production:

The International Monetary Fund estimates that corn ethanol production in the United States accounted for at least half the rise in world corn demand in each of the past three years. This elevated corn prices. Feed prices rose. So did prices of other crops — mainly soybeans — as farmers switched their fields to corn, according to the Agriculture Department.

Rice is a staple for half the world. Rice prices have almost doubled this year, mostly due to countries like India and Vietnam banning the export of certain types of rice. India has tried to control domestic costs by raising the export prices of non-basmati rice. In Thailand, there are reports that about 200,000 tons of rice (worth over $100 million) have gone missing from national warehouses. Since January, thousands of troops have been deployed in Pakistan to guard trucks carrying wheat and flour.

In a world where there are millions of people who are wealthy, smart, and creative, we shouldn’t be rioting over food.

Dollar under pressure, wheat prices go up, and Bear Stearns may be bought out

The dollar touched a record low of $1.5651 against the euro and crude oil reached a record $111 a barrel. Grocery costs are expected to go up further with the rise in the cost of wheat.

The price of wheat has more than tripled during the past 10 months, making Americans’ daily bread — and bagels and pizza and pasta — feel a little like luxury items

“It’s going to affect everything … impact on every section of the grocery store,” said Michael Bittel, senior vice president of King Arthur Flour Co. in Norwich, Vt.

And JPMorgan Chase, along with the Feds, are trying to bail out Bear Stearns, an 85 year old investment bank, whose stock lost more than 20% of it’s value in recent days.

CCNWON has a good writeup of stagflation. In it he shows how commodity prices have gone up in recent years yet the wages for the average American has gone down about 2%.

Food prices go up again