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Food Crisis Prediction

Mike

Well-known member
A new crisis is emerging, a global food catastrophe that will reach further and be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire, Donald Coxe, global portfolio strategist at BMO Financial Group said at the Empire Club's 14th annual investment outlook in Toronto on Thursday.

"It's not a matter of if, but when," he warned investors. "It's going to hit this year hard."

Mr. Coxe said the sharp rise in raw food prices in the past year will intensify in the next few years amid increased demand for meat and dairy products from the growing middle classes of countries such as China and India as well as heavy demand from the biofuels industry.

"The greatest challenge to the world is not US$100 oil; it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically," he said.

The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.

Mr. Coxe said in an interview that this surge would begin to show in the prices of consumer foods in the next six months. Consumers already paid 6.5% more for food in the past year.

Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade.

At the centre of the imminent food catastrophe is corn - the main staple of the ethanol industry. The price of corn has risen about 44% over the past 15 months, closing at US$4.66 a bushel on the CBOT yesterday - its best finish since June 1996.

This not only impacts the price of food products made using grains, but also the price of meat, with feed prices for livestock also increasing.

"You're going to have real problems in countries that are food short, because we're already getting embargoes on food exports from countries, who were trying desperately to sell their stuff before, but now they're embargoing exports," he said, citing Russia and India as examples.

"Those who have food are going to have a big edge."

With 54% of the world's corn supply grown in America's mid-west, the U.S. is one of those countries with an edge.

But Mr. Coxe warned U.S. corn exports were in danger of seizing up in about three years if the country continues to subsidize ethanol production. Biofuels are expected to eat up about a third of America's grain harvest in 2007.

The amount of U.S. grain currently stored for following seasons was the lowest on record, relative to consumption, he said.

"You should be there for it fully-hedged by having access to those stocks that benefit from rising food prices."

He said there are about two dozen stocks in the world that are going to redefine the world's food supplies, and "those stocks will have a precious value as we move forward."

Mr. Coxe said crop yields around the world need to increase to something close to what is achieved in the state of Illinois, which produces over 200 corn bushes an acre compared with an average 30 bushes an acre in the rest of the world.

"That will be done with more fertilizer, with genetically modified seeds, and with advanced machinery and technology," he said.
 

mwj

Well-known member
Mike it is so cheap(corn) that I burn it instead of propane :p Should I quit doing that so someone in China can halve a hamburger with there rice? Price some stainless steal or copper and tell me why I should feel sorry for them :shock:
 

MoGal

Well-known member
China is putting export tarriffs on 57 grains. 25% on wheat and wheat byproducts........... saw where one "financial expert" is predicting wheat at $14.50 bushel by next summer.

Milk is supposed to be $6.00 gallon by summer..........

About a week before xmas I was in the grocery store and yes I had quite a bit of meat .......... hams were 99 cents lb and I stock up on sale prices... had 3 hams, 1 duck, 1 chicken, hamburger, and several pkgs of bacon.
The guy sacking the groceries said, that's a lot of meat and I'm thinking it didn't seem that much to me..... then the lady behind me said in a low voice to her husband, "must be food stamps" and that ticked me off so when I handed the cashier cash, I looked at the woman and just smiled. Actually it was $120 worth of groceries and I don't normally spend that much (however we could probably get by for several months with 2 small deep freezers full and the frig stays full and I keep the canned goods shelf packed).............. that may be a good thing. I was at Walmarts the other day for the first time in about 2 months and their canned corn is all 50 cents a can ... that used to be around 34 cents. We are definitely having a big garden this year.

The part that worries me is folks that live in cities/towns like sardines in a can and won't be able to garden.... you know they won't let their kids go hungry.... just don't sound like exciting times to me. Well, at least my relatives won't starve.
 

Tex

Well-known member
MoGal said:
China is putting export tarriffs on 57 grains. 25% on wheat and wheat byproducts........... saw where one "financial expert" is predicting wheat at $14.50 bushel by next summer.

Milk is supposed to be $6.00 gallon by summer..........

About a week before xmas I was in the grocery store and yes I had quite a bit of meat .......... hams were 99 cents lb and I stock up on sale prices... had 3 hams, 1 duck, 1 chicken, hamburger, and several pkgs of bacon.
The guy sacking the groceries said, that's a lot of meat and I'm thinking it didn't seem that much to me..... then the lady behind me said in a low voice to her husband, "must be food stamps" and that ticked me off so when I handed the cashier cash, I looked at the woman and just smiled. Actually it was $120 worth of groceries and I don't normally spend that much (however we could probably get by for several months with 2 small deep freezers full and the frig stays full and I keep the canned goods shelf packed).............. that may be a good thing. I was at Walmarts the other day for the first time in about 2 months and their canned corn is all 50 cents a can ... that used to be around 34 cents. We are definitely having a big garden this year.

The part that worries me is folks that live in cities/towns like sardines in a can and won't be able to garden.... you know they won't let their kids go hungry.... just don't sound like exciting times to me. Well, at least my relatives won't starve.

I like to stock up like that too.

....and if you have a good garden, you have good friends. I usually do.
 

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