Global Food Crisis Sweeps Commodity Markets
When alternative media outlets like SHTFplan and others warn of global food supply problems like we did in December of 2009 and just recently in our article Agflation Threat: Food Price Trend is â€˜Terrifyingâ€™ we are often dismissed as fear mongers. Most of your neighbors, who spend their days looking forward to the next Jersey Shores party destination, have no clue what is transpiring behind the scenes, out of view of mainstream media.
Perhaps now they’ll start getting concerned, or, they’ll simply hope that world leaders will be able to find a solution to counteract the natural effects of weather and hyperinflationary monetary policy.
In our previous Agflation article we reported that food prices were skyrocketing and a good portion of the blame could be placed on the trillions of dollars of “liquidity” that is being pumped into the system by the Federal Reserve. The FT is now reporting the other side of the story, one which was pointed out last December – that food inventory data, much like our unemployment numbers, have been completely manipulated – and it is now becoming apparent that we are much worse off than originally thought (by those who believed the USDA and others):
Fears of a global food crisis swept the worldâ€™s commodity markets as prices for staples such as corn, rice and wheat spiralled after the US government warned of â€œdramaticallyâ€ lower supplies.
An especially hot summer in the US, droughts in countries including Russia and Brazil and heavy rain in Canada and Europe have hit many grain and oilseed crops this year. This has raising concern of a severe squeeze in food supplies and a repeat of the 2007-08 food crisis.
The US Department of Agriculture, in a closely watched report, predicted that the countryâ€™s stocks of corn would halve to their lowest levels in 14 years.
It warned of a â€œmuch tighter supply pictureâ€ for corn and barley, the two main feedstocks used to fatten cows, sheep, pigs and poultry.
â€œI think we have a food crisis right now,â€ said Hussein Allidina, head of commodities research at Morgan Stanley.
The average person is now being hit from multiple sides, and they’re getting hit where it hurts the most. Add a healthy dose of Wall Street speculation to the monetary and inventory pressures on food and you’ve got a serious situation developing. One that will leave many people without the ability to acquire the absolute basic necessities to survive.
This is the trend going forward. One in eight Americans now depend on the U.S. government to feed them and there is absolutely no solution which has been presented that will shift this trend in the other direction. In fact, it seems that those in positions of power with the ability to change this trend are actually taking steps to add even more Americans to the food stamp dole.
Again, we recommend our readers do what SHTFplan contributor Tom did: stock up on food and energy supplies while you can do it at a decent price. Either purchase pre-packaged 5 or 6 gallon buckets of dry goods like rice, wheat, and beans, or head down to your local grocery store and buy large bags of rice and pinto beans and pack the goods yourself. Packaged properly, these goods will last 5 – 10 years. Now, we’re not necessarily in the prediction business, but we’re fairly confident that 5 to 10 years from now your rice and beans are going to be significantly more expensive than today. Yes, we know it’s crazy to think the US dollar will continue to lose value as the Federal Reserve creates billions upon billions out of thin air every week, but pre-purchasing hard asset investments may be a profitable strategy to look into.
While your neighbors are convinced that the stock market is where the money is, we’re convinced that stores of food and other essential commodities will be of much greater benefit. You’ll have to decide for yourself.
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Date: October 11th, 2010
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