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Food And Drink Prices To Soar
The Daily Reckoning ^ | 8-30-2010 | Addison Wiggin

Posted on 08/30/2010 7:23:25 PM PDT by blam

Food And Drink Prices To Soar

By Addison Wiggin

08/30/10 Baltimore, Maryland – Today’s report begins with an abominable horror: The world’s most valuable commodity has soared to its highest price in a generation.

Coffee futures are approaching a 13-year high of $1.88 today.

And the case for more expensive coffee is growing stronger every week: Columbia had a smaller-than-normal harvest last year, and dry conditions in Brazil this year have pinched supply even tighter. Demand for this delicious, addictive stimulant is (naturally) growing.

Thus, stockpiles at Intercontinental Exchange-certified warehouses are down 35% this year and swill makers like Maxwell House and Folgers have already raised prices by 9% and 10%, respectively. Starbucks announced recently that it will eat the costs, which will amount to roughly 4 cents a share.

Retail prices would have to rise a whole lot more than 10% for us to even consider switching to something as silly as…tea.

Food prices are about to get a huge boost, too. But not in what we’d like to think of as a productive way.

“Brazil screwed it all up,” Chris Mayer, editor of Mayer’s Special Situations, laments by way of giving us an explanation. Last week, the Brazilian government let loose a sudden, “immediately binding” mandate that effectively outlawed all foreign ownership of domestic farmland…eerily similar to the Zimbabwean farmland coup.

“Worse,” Chris continues, “the legal rules are so unclear that all such acquisitions since 1988 could be null and void, with the land returned to nationals. I can tell you from talking to people down there in the last few days – including attorneys – that local businesspeople are not dismissing that possibility.

“Blame politics. It is an election year in Brazil. The country will vote for a new president on Oct. 3. All indications are that it will be Dilma Rousseff. She is one of the ones who have been highly critical of foreigners buying Brazilian land. ‘Brazilian land for Brazilians’ is the chant.”

What a boondoggle.

In April alone – the latest data available – foreign investment in Brazilian agriculture was $26 million – up 225% from a year ago. Between 2002-08, foreign investors poured nearly $2.5 billion in land alone.

And there are some public funds that probably won’t go forward now. Agrifirma raised $189 million and planned an IPO. Macquarie has a fund they set up, and they were to raise as much as $600 million.

“The new rules will freeze agricultural investment in Brazil,” adds Chris. “This is big news for global food markets because Brazil was such a key part of the equation. Brazil, as I’ve pointed out, is the world’s arable land bank. This is where we’d get the added food supply the world needs.

“The implications will echo far beyond the borders of Brazil. It will have an impact on the world’s future food supply and on food prices. And it also raises broader questions about investing in Brazil at all.”

[Ed note: Chris was scheduled to lead an investment tour to Brazil this month, but all the farmland projects he was lined up to see have been put on hold because of this mandate. We’ll keep you posted on further developments.]


TOPICS: News/Current Events
KEYWORDS: brazilprices; coffee; food
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1 posted on 08/30/2010 7:23:32 PM PDT by blam
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To: blam

yuppers...its about doubled


2 posted on 08/30/2010 7:24:31 PM PDT by dalebert (true hillbilly)
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To: blam
Are we about to see a new organization named FPEC? (Food Producing Exporting Countries)
3 posted on 08/30/2010 7:27:07 PM PDT by blam
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To: blam

For later read.

I work in the food industry, and supply is very tight for our commodity.

We are not going to starve, but things will be more expensive.


4 posted on 08/30/2010 7:28:41 PM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: blam

I’m skipping HS tomorrow and going to Sam’s Club to buy lots of coffee.

And rice, always rice.


5 posted on 08/30/2010 7:30:16 PM PDT by netmilsmom (I am inyenzi on the Religion Forum)
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To: blam

Although it looks more expensive , I got one of those pod systems and I fix coffee a cup at a time.

This drops the total throughput cost to about 60 cents a day.

Costs a lot more to make it a pot at a time, and if you’re the only guy drinking the coffee that runs your price up over $1.00 a cup. NOT GOOD.


6 posted on 08/30/2010 7:30:49 PM PDT by muawiyah
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To: blam

If so welcome to the new “and alot nicer” Saudi Arabia of food.

The USA


7 posted on 08/30/2010 7:31:23 PM PDT by WyvernAK
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To: blam

If so welcome to the new “and alot nicer” Saudi Arabia of food.

The USA


8 posted on 08/30/2010 7:31:33 PM PDT by WyvernAK
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To: blam

I’d forget about coffee and keep a close eye on the futures for wheat and soybeans.


9 posted on 08/30/2010 7:35:11 PM PDT by Farmer Dean (stop thinking about what they want to do to you,start thinking about what you want to do to them)
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To: muawiyah

We use a press pot. They make excellent coffee.


10 posted on 08/30/2010 7:41:14 PM PDT by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: blam

Thanks. Just ordered a case of the world finest at the old price.

https://shop.melitta.com/itemdy00.asp?T1=60+131&Cat=


11 posted on 08/30/2010 7:43:11 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: Lurker

Yes they do make excellent coffee


12 posted on 08/30/2010 7:53:20 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: mylife
If you like that, you'll love this:

Blue Mountain Coffee.

L

13 posted on 08/30/2010 7:55:15 PM PDT by Lurker (The avalanche has begun. The pebbles no longer have a vote.)
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To: blam

Russia suffers worst wheat harvest in 55 years On top of Burning Nuclear fallout from rampaging forrest fires... Labor and food riots in Poland ,Greenland ,Great Britain Falls to Islamic overthrow of Parliment... Cuba and Nicaragua reach troop strength goals of 800,000. El Salvador and Honduras fall... Green Party gains control of German Parliament. Demands withdrawal of nuclear weapons from European soil... Mexico plunged into revolution overthrown by MS13 ... United Nations Dissolves. United States stands alone.

The New Red Dawn


14 posted on 08/30/2010 7:56:24 PM PDT by ATOMIC_PUNK (Any man may make a mistake ; none but a fool will persist in it . { Latin proverb })
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To: muawiyah
You only drink one cup per day? You poor poor person! My wife and I drink a 10-cup pot every morning, cost about $1.
15 posted on 08/30/2010 8:01:32 PM PDT by BillT (If you can not stand behind our military, you might as well stand in front of them!)
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To: BillT

Put in more coffee.


16 posted on 08/30/2010 8:03:53 PM PDT by muawiyah
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To: muawiyah
If you think of coffee by the cup, you aren't a serious coffee drinker. ;)

I buy green beens from Costa Rica (Tres Rios) and roast and grind them myself. I pay about $3/lb counting shipping, etc...

/johnny

17 posted on 08/30/2010 8:04:13 PM PDT by JRandomFreeper (Gone Galt)
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To: Lurker

I am sure I will love it.
Melitta is outstanding for the price.
I love it.


18 posted on 08/30/2010 8:04:39 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: JRandomFreeper
I have some ethiopian neighbors who think the only way to drink coffee is to start with the green beans, and do all that stuff at home.

You can hear them buzz and see them jerking around too ~ they get ALL the caffein!

19 posted on 08/30/2010 8:06:15 PM PDT by muawiyah
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To: ATOMIC_PUNK

I like the part about the UN!


20 posted on 08/30/2010 8:08:54 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: muawiyah

Thats what I do.

A couple full sized mugs. From the expresso machine.


21 posted on 08/30/2010 8:11:53 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: muawiyah

O had read a few years back that it is still a crime in Ethiopia punishable by death to smuggle out any kind of coffee bean that is still alive.

They still have like 90% of the worlds extant undiscovered coffee species and don’t want anything else getting out.


22 posted on 08/30/2010 8:14:32 PM PDT by djf (They ain't "immigrants". They're "CRIMMIGRANTS"!!!!)
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To: mylife
I have two kinds ~ one is a Tasimo machine ~ makes lots of noise and requires you to press a button to fill it all the way up (otherwise the barcode on the ratpoison type containers with the coffee tells the machine what it is).

The other one uses all the standard pods.

I actually have 5 or 6 more of these things purchased earlier at a good "close out" price. I'm set for life.

23 posted on 08/30/2010 8:15:33 PM PDT by muawiyah
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To: muawiyah
"Costs a lot more to make it a pot at a time, and if you’re the only guy drinking the coffee that runs your price up over $1.00 a cup. NOT GOOD."

That's a good point. However, just drink the whole pot like I do.

24 posted on 08/30/2010 8:16:31 PM PDT by blam
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To: blam

Don’t drink the stuff. Tried, but I just don’t like the taste.


25 posted on 08/30/2010 8:17:27 PM PDT by aliquando (A Scout is T, L, H, F, C, K, O, C, T, B, C, and R.)
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To: blam

Stop buying it and drink WATER!


26 posted on 08/30/2010 8:18:48 PM PDT by taxtruth (Something really stinks In The Federal Government/Mafia and I think it's BO!)
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To: blam

Stop buying it and drink WATER!


27 posted on 08/30/2010 8:18:59 PM PDT by taxtruth (Something really stinks In The Federal Government/Mafia and I think it's BO!)
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To: blam

Stop buying it and drink WATER!


28 posted on 08/30/2010 8:19:01 PM PDT by taxtruth (Something really stinks In The Federal Government/Mafia and I think it's BO!)
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To: blam

Stop buying it and drink WATER!


29 posted on 08/30/2010 8:19:03 PM PDT by taxtruth (Something really stinks In The Federal Government/Mafia and I think it's BO!)
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To: blam

Stop buying it and drink WATER!


30 posted on 08/30/2010 8:19:03 PM PDT by taxtruth (Something really stinks In The Federal Government/Mafia and I think it's BO!)
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To: muawiyah

I do it the old way.
I an still trying to con my bud out of the Pavonni he bought for $75 that he never uses


31 posted on 08/30/2010 8:20:52 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: muawiyah

32 posted on 08/30/2010 8:22:29 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: taxtruth

Coffee is loaded with potassium and magnesium, two minerals that many Americans are deficient in.

And Americans get more antioxidants from coffee than any other source.


33 posted on 08/30/2010 8:24:26 PM PDT by djf (They ain't "immigrants". They're "CRIMMIGRANTS"!!!!)
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To: muawiyah

I can’t drink the stuff anymore, caffeen sensitive but
the best I ever had, and preferred was Ethiopian
Yerrgachev SP. Finest flavor going.


34 posted on 08/30/2010 8:25:02 PM PDT by tet68 ( " We would not die in that man's company, that fears his fellowship to die with us...." Henry V.)
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To: ATOMIC_PUNK

Is that in the movie coming out later this year?


35 posted on 08/30/2010 8:25:06 PM PDT by tbw2 (Freeper sci-fi - "Sirat: Through the Fires of Hell" - on amazon.com)
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To: tet68

Oh and none of that french roast stuff either.
Burnt beans don’t make better coffee, just bitter.


36 posted on 08/30/2010 8:26:22 PM PDT by tet68 ( " We would not die in that man's company, that fears his fellowship to die with us...." Henry V.)
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To: tet68

Agreed


37 posted on 08/30/2010 8:28:56 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: Farmer Dean

I’d forget about coffee and keep a close eye on the futures for wheat and soybeans.

********

Coffee is second only to petroleum in world trade.

US consumers drink more coffee per capita than any other nation.

Granted, it is not _food_, but it is not an insignificant trade item.


38 posted on 08/30/2010 8:32:24 PM PDT by Psalm 144
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To: Psalm 144

Cigarettes, Coffee and Booze
Not in that order.


39 posted on 08/30/2010 8:38:17 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: ATOMIC_PUNK

WOLVERINES!


40 posted on 08/30/2010 8:38:37 PM PDT by Psalm 144
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To: blam

Hmm ~ have to install that 4th toilet Fur Shur.


41 posted on 08/30/2010 8:39:28 PM PDT by muawiyah
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To: tet68

The are some quality, specialty decafs out there now that have really satisfying flavor.


42 posted on 08/30/2010 8:42:42 PM PDT by Psalm 144
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To: mylife

Those are the last three luxuries people will hang on to:
nicotine, caffeine, alcohol.


43 posted on 08/30/2010 8:44:46 PM PDT by Psalm 144
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To: djf
That is to be believed ~ one of our neighbors brought his own beans ~ but he lived just outside Ethiopia in Eritrea. They have the same stuff.

It's a major thing with them.

The old timers here remember when the Ethiopians arrived ~ they moved in quickly because they didn't have much. Then, after their grass grew high enough they bought a power mower ~ which the women learned to use.

They wore their saris and gold jewelry to mow the lawn while the men sat at a little white table sipping coffee.

Oh my lord did I ever learn an awful lot about Ethiopians that I'd just never imagined when they mowed the grass.

They assimilated after about 20 years living here but I never saw the men mow the grass. They supervised!

44 posted on 08/30/2010 8:45:30 PM PDT by muawiyah
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To: netmilsmom
"I’m skipping HS tomorrow and going to Sam’s Club to buy lots of coffee."

"And rice, always rice."

How Hyperinflation Will Happen

45 posted on 08/30/2010 8:48:20 PM PDT by blam
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To: Psalm 144

There is another but it aint legal.

We see time and again that when things get thin people always pay for so called vices..

We will call it entertainment, but it is really escape.


46 posted on 08/30/2010 8:59:34 PM PDT by mylife (Opinions $1 Halfbaked 50c)
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To: muawiyah

We make a pot, then refrigerate what isn’t consumed hot. Serves us for 2-3 days, either reheated or iced.


47 posted on 08/30/2010 9:07:34 PM PDT by DeaconBenjamin (A trillion here, a trillion there, soon you're NOT talking real money)
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To: muawiyah

I only recently started drinking coffee again. I pretty much quit drinking it after I retired from the Navy. No particular reason, just did. And now I drink one cup a day 4-5 times a week. I enjoy it more than I did when I drank 10 cups or more a day.


48 posted on 08/30/2010 9:13:48 PM PDT by GATOR NAVY ("The bigger the government, the smaller the citizen." -Dennis Prager)
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To: blam
Not to worry, this year it's all about Tea. ;)


49 posted on 08/30/2010 9:36:55 PM PDT by anymouse (God didn't write this sitcom we call life, he's just the critic.)
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To: blam

>>(My private guess is gold will be finessed, but silver will shoot up the most—to $100 an ounce within the week.)<<

I own silver! Bought at 11.00 an oz.

I’m still buying coffee. We can eat squirrel, but I need my coffee.


50 posted on 08/31/2010 8:32:21 AM PDT by netmilsmom (I am inyenzi on the Religion Forum)
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