Just in – What cold weather does to food prices

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.”


Food_Price_Inflation


“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.

http://www.businessinsider.com/food-inflation-to-become-feds-concern-2014-3

http://www.cnbc.com/id/101469839

http://www.zerohedge.com/news/2014-03-26/real-inflation-fear-us-food-prices-are-19-2014

Thanks to Bill Sellers for these links


9 thoughts on “Just in – What cold weather does to food prices

  1. Doesn’t that graph look a bit like Michael Mann’s hockey stick? But this food-price hockey stick is a bit more serious, and, believable.

    • Food stocks up to quite recently have been cheap to produce, until the US started to grow corn or other crops for fuel because it paid better. Current wheat stocks are reliant on high latitude producers such as Canada and others at similar latitudes. A harsh series of winters caused by, or as a side effect of the Solar Minimum affecting the Polar Jet stream could frost damage winter wheat to the point it become uneconomical to grow.
      Growers, growing fuel crops, may find it more profitable to grow food crops instead in medium latitudes. However, government subsidies to grow Fuel crops should crease ASAP.

  2. Of course, the federal government will remove this from their CPI calculations, along with those trivial, insignificant energy costs. Those two things do nothing but clutter the clearer picture of what REAL inflation is.

    Too bad everyone needs to eat and use energy. Not everyone needs a new washing machine each month.

  3. I think that if we are in a little ice age we should expect to see a trend towards shorter growing seasons and we should expect to see cooler wetter weather at each end of the growing season.
    This is going to require a change in agriculture in favor of root crops, cold tolerant crops and animal husbandry/ ranching. Grains, beans and warm weather crops may well be subject to crop failure resulting in famine. One more thing. After 11500 plus years of an interglacial the trace minerals in the soils are apt to be depleted in some areas. The solution is volcanic rock dust. This will strengthen the crops against the cold, disease ,pests and promote growth.

  4. That graph isn’t any more believable than Michael Mann’s. We have had steady 10% inflation in food prices since 2009. Bacon alone has at least doubled. The frozen food section is 25% smaller and the price is higher.
    There is no better agency to give food inflation numbers than the person who shops every week.

  5. I see civil unrest exploding throughout the United States. The normal political game of Democrates and Republicans blaming the other, of the Supreme Court usurping Constitutional Authority it hasn’t, will resolve the coming unrest. Most likely outcome will be a military coup. Neither party has the leaderdhip or will to quell of takd the necessary steps to mitigate the unrest as Russia is now doing – securing fuel and food production in areas most likely to remain productive. FBI,CIA & NSA are simply too political and top heavy in fickled personnel lacking the personal courage and dedication to the Constitution to effect the changes necessary. The local will fold az they had in L.A. and New Orleans.

    I see, if food and energy prices climb a government run by inept leadership good only in stuffing their pockets and ineffective in dealingbwigh complex matterz requiting intelligence beyond an 8th grade level.

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