The US still supplies two thirds of the world's corn exports, but with oil at $84 a barrel, may be tempted to divert corn oil to biofuel.
South America and Russia have had weather problems which are leading to lower crop yields.
The dollar is weaker than it was two years ago making its purchasing power less.
Read more here and here.
What does it all mean?
In 2007, rice shortages led to riots in other countries. The rising price of food, which immediately effects one fifth of the worlds population due to poverty, leads to shortages and domestic disturbances.
Remember the shortage of rice in the markets a few years ago?
If - key word - you can, it might be a good time to stock up on staples like rice, corn meal and flour as all may go up dramatically in price. Rice should always be purchased in 25 or 50 pound bags. Flour is good to buy in bulk, but consider a grain mill and purchasing wheat as flour begins to go rancid once it has been milled.
As always, store wheat and rice in buckets and seal them up good - they should last for years.
If is the key word. Don't go into debt or panic buy because of the news. Purchase only what you can safely afford and what you will eat.
Watch the news carefully in 2011 regarding food supplies, prices and the price of oil. These be real trends to watch next year.
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1 comment:
One point: It takes more energy from oil and natural gas to make ethanol from corn then you get from the ethanol. So in a sane world higher oil prices would result in LESS ethanol being made from corn rather then MORE! However since those Iowa congressmen want to get reelected I'm sure they will jump at any opportunity to increase the subsidy to ethanol producers. We would actually be better off to pay them to NOT make the ethanol. Food prices would go down and more gasoline and natural gas would be available...
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