Skip to comments.Food Crisis Doomsday Scenario As Prices To Shoot Through The Roof
Posted on 08/31/2010 11:49:11 AM PDT by blam
Food Crisis Doomsday Scenario As Prices To Shoot Through The Roof
Politics / Food Crisis
Aug 31, 2010 - 08:52 AM
The worst weather on record coupled with the practice of speculation in the commodities markets are set to send food prices skyrocketing, bringing misery and starvation to large swathes of the worlds population. Are we set to see food riots this winter?
In the USA, Walmart has already announced a price hike of 5.8% on average for a 31-item basic basket for this Autumn. The long-term rise, however, is far more frightening, with the UNO predicting an increase of 60 per cent by 2030.
What is happening?
When there is a massive price spike, such as the case in recent years, followed by more price rises (as is the case today) the markets panic and speculative buying sends the prices through the roof. The market economy system is indeed not all about supply and demand but is also, and fundamentally, fuelled by speculative trading, with spot buyers buying future positions of commodities. When they are scarce, and the more so when the market senses that a scarcity exists, the price goes up.
This is what is happening today. September corn is up by 3.6% a bushel, wheat by 34 cents. In July the price of wheat shot up by the highest quantity in the last 50 years: 42 per cent. This in turn will push up prices of pasta, bread and cereals in the near future.
Prices set to rise for 12 to 18 months
Analysts predict upward trends in wheat, corn, soybeans, bean oil and bean meal and the general feeling is a continued rising trend over the next 12 to 18 months. As usual, no mechanisms have been activated to protect the worlds poorer populations from the dramatic effects of supply issues and the resulting speculation in prices.
Global production downturn
Russia reports a drop in production of around 20 per cent due to dry weather conditions. Drought has also affected Ukraine (where maximum production is set to reach just 66% of domestic demand) and Kazakhstan, while floods have affected 13 million acres of cereals in Canada and have wiped out a large part of Chinas harvest. Germanys wheat production is ten to twenty per cent down on 2009; in Argentina dry conditions mean that only 80% of the arable land for cereals has been planted.
The S word: Speculation
In todays market economy system, what drives the prices is not only supply and demand but also the S word: Speculation, where a handful of players push prices sky high and way beyond the reaches of the pockets of the average consumer. If the system were based upon supply and demand then the price of soybean would be bearish (top-down attack, falling), because the main producers (Brazil, Argentina and the USA), have had a good harvest. Then why is the price of soybean bullish (bottom-up attack, rising)?
Because cash premiums are forcing the soybean futures rates higher as a process of over-consumption of soybean is noticed in the marketplace (soybean is present these days in most foodstuffs and other consumable items). So much so, that the price of soybean would have to rise a further 50 to 80% to curb the current demand.
And it makes sense for this to happen and that is going to affect the price of everything we eat.
Couple this with the rising cost of transportation (crude and natural gas prices are set to rise from September) and we see our comfortable little monetarist-oriented market economy system has engendered another fine crisis looming on the horizon. Watch this space.
Vast swathes of the planet are set to go hungry. Those who were previously hungry may starve. It is the Doomsday Scenario and it is upon us. And it is caused not by the lack of supply or scarcity of abundance. It is caused by this manic, inhumane system, the S-word, Speculation.
Isn’t this the third horse of the Apocalypse? A black horse as I recall.
Kruschev credited it with keeping him alive. Pity, that.
“...frightening, with the UNO predicting an increase of 60 per cent by 2030”
A 60% increase over 20 yrs is “frightening”?
Gee, no mention of the central valley in California where huge swaths of farm land are sitting fallow because of the obamanation’s water restriction (to save some fish). Wonder why? /sarc
Have you actually looked at the size of the package you are getting? Many products have been downsized without lowering the price.
I think Kruschev was drunk when he said that. Well... must have been, most of the time, anyway.
Yep - 2.5% per year, compounded.
DOOMED! DOOMED, I tell you!
I’m having guests this evening, so last night I did a quick, late shopping. I went to Walmart and to another local grocery store.
Many prices were up with the quantities down. Bacon was a sticker shock, about a 30% increase. At the start of the season, red peppers were nearly double what they were last winter! Dairy products, especially butter, cream cheese and cream, were high, as they have been for weeks. Meanwhile, my farmer friends and neighbors are barely receiving enough for their milk to continue in business, insuring a further drop in producers. Bread and grain products in general seemed unchanged. House brand paper products were about the same, as well.
So, today, I looked at commodity futures. All grains down several cents. Beef about the same, with pork, especially bellies, still high.
But, locally, our row crops look wonderful, the weather has been excellent and I know that pigs are prolific, farmers are opportunistic and I see that the commodity pork prices have slipped for later in the year. Many producers I know have switched to pigs for this year.
We are sort of a captive market here in my rural area. My husband tends to graze prices on various items at least once a week when he goes to work in a larger city and so, we tend to stay on an even keel, over time. But my little dinner party tonight set me back more than I expected. Add in some OTC items we both needed for minor issues and the total bill was quite high, considering.
The Soviet Army survived the 2nd half of WW2 on Spam and they still have a warm spot in their hearts for Spam. I think many of those convoys to Murmansk held many tons of Spam.
Stop burning our food in cars and there won’t be a food crisis.
Im spending all my money on canned spam.
For only $19.95 I will send you my recipe booklet on 101 Ways To Cook Spam And Like It - heck, I may as well profit on this crisis. I missed most of them;)
I pretty much buy the same things every other week. Several packages are same size but less contents. Groceries this last week were 8% more than two weeks ago and not as many twofers. One store has now started doing a significant price reduction only if you buy 4 or 5 of the same thing.
Krogers went down in the study by a percent, Safeway went up.
Interesting to note that some of our local dairies are bringing back the actual half gallon of ice cream, and selling it for the same price as before, bucking the trend of making 3 pint or smaller containers.
Has Walmart ever preannounced price increases, especially a long time in advance? That sets off my BS detector for the who article.
I gonna worry when they start selling their products for gold coins. Anyway, I have got enough on my plate trying to service the leftist congress and part time president. Oh, by the way, is he back from vacation yet?
That's old. I remember when I was a kid back in the 70s and early 80s reading a journal examining the quirks and foibles of modern society (OK, I admit it, I was reading Mad Magazine) and that has been going on for a long, long time. One piece in an old back issue made fun of the shrinking 5¢ (yes, 5¢) candy bar.
I've been eating a lot more fresh fruits, vegetables and unprocessed meats recently so it is harder to sneak price increases past me because everything is priced per pound.
WE ARE ALL GONNA DIE AND THE GULF WILL BE A WASTELAND FOREVER AND THERE’S GONNA BE AN ICE AGE! DOGS AND CATS LIVING TOGETER!
My son and I visited Wendy's last night. It was the first time I had been in a fast food joint in years. Two sandwich meals (chicken + dbl burger w/fries & drinks) = $17.06
I though there was a math error somewhere but I added the prices up as we ate and came up with the same numbers. Cripes!
Except for the fact that the fattest people in the US get their food free, paid for by welfare. Food prices go up and you get to pay extra for their free food.