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Rising Grain Prices Bond the US with China and Allies Alike

29 February 2008 - News - Editor

There are no signs of aliens coming to destroy us, but even so there are scenes from the 1996 movie ‘Independence Day’ developing in real life. It started with successive years of drought in Australia, a major grain exporter. China has never had to bother about growing all its food needs, but sourcing grain on the world market gets tougher by the day.

That will hit India during this spring harvest, as it struggles to keep supplies going at rock-bottom rates for its myriad poor. Civil unrest is brewing in Indonesia, as people struggle to meet daily food needs for their families. Even salaried folk on fixed incomes in highly repressed Saudi Arabia have begun to murmur protests at incredible inflation in their food stores. Bio-fuels have begun to take away scarce arable land, and even the generous Mid West Americans unable to respond quickly and adequately to the global grain crisis. People everywhere look to the skies and to the United States administration in despair!

Developed economies have begun to feel the pinch. The best brand names in the food processing names keep inching their prices ever upwards. They report margins coming under pressure as rising input prices wipe out selling rate increases. Washington and Presidential hopefuls may worry more about crude oil prices, but it is time to tighten belts and prepare for a devilish food supply market. Take a look at our earlier article entitled ‘Farming as a Path to Financial Planning’ It will pay to start thinking out of the box as increasing shares of your salary checks go in to shopping for basic food, which we have taken for granted for too long. A bright spot in the enveloping world food crisis is that stocks from the Crops, Fish, and Livestock industries have begun to report incredible profits. Pesticide, fertilizer, seed, and agricultural equipment suppliers stand to reap record cash harvests, no matter whether farmers opt for grain or bio-fuels.

What is your take on the food front? Are you rich enough not to bother if potatoes and pork bellies go through the roof? Do you know discount stores that give the best deals on unbranded food items? Perhaps you are a farmer, or know some folk who grow crops, vegetables, fruit, or rear fish and meat. Everyone is welcome at our community, and we are always grateful to hear from you; you can register and use the space below.

Tags:

china, grain, united states, food, export, farming

 



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