The real inflation fear: US food prices jump 19% in 2014 … and we’re only 3 months into the year.
What happens when pent-up demand (from a frosty east coast emerging from its hibernation) bumps up against a drought-stricken west coast unable to plant to meet that demand?” asks zerohedge.com. “We are sure the weather is to blame.”
“The spot price (not futures speculation-driven) of US Foodstuffs is the best performing asset in 2014 – up a staggering 19%,” says zerohedge.
“The Commodity Research Bureau’s BLS Foodstuffs index — a composite of prices of hogs, steers, lard, butter, soybean oil, cocoa, corn, Kansas City wheat, Minneapolis wheat, and sugar — has suddenly exploded higher,” agrees businessinsider.com.
“Perhaps it is just the result of heightened geopolitical pressures and could prove temporary,” says Bartosz Pawlowski, global head of EM strategy at BNP Paribas. “Then again, it is also possible that the reason might be the weather.”
“Perfect storm for inflation could rock the market,” reads CNBC.com headline. “The CRB commodity index…(is) at its highest level in over a year, due to tough agriculture conditions and winter weather issues that have sharply increased the prices of many commodities. More recently, the crisis in Ukraine seems to have boosted prices of commodities such as wheat and corn.”
Could runaway prices of food lead to fighting in the streets? I fear that the answer is yes.
Thanks to Bill Sellers for these links