…or at least so says this article from Omaha.com (props to Zerohedge for the link):
- Warnings of higher food prices headed for American supermarkets and restaurants were swallowed easily across much of farm country Wednesday.
- The big gulp came when the U.S. Department of Agriculture reported that global demand had pushed U.S. corn supplies to their lowest point in 15 years.
- The price of corn, which has doubled over the past six months, affects most food products in supermarkets. It’s used to feed the cattle, hogs and chickens that fill the meat aisles.
I’d like to point out that we’re burning it in our cars as well. FORTY PERCENT of the US corn crop.
- The U.S. ethanol industry will consume about 41 percent of the U.S. corn crop this year, or 15 percent of the global corn crop, according to Goldman Sachs analysts.
Now, back to the Omaha.com article for this pearl:
- ConAgra Foods Inc. — the Omaha-based producer of brands including Healthy Choice, Banquet and Chef Boyardee — is raising prices on some of its products because of higher costs for corn and fuel, said Teresa Paulsen, a spokeswoman.
Hmmmm…higher costs for corn and fuel…does anyone see a feedback loop here? Is this the same thing as eating your own leg to ward off starvation?
Next I have to ask: have the folks who wrote this article been in a grocery store lately? I mean, really, “get ready” for higher food prices? Maybe what they’re trying to say is “You ain’t seen nothing yet.” Which is what I happen to believe. Now, let’s be clear about something. I don’t have any problem at all with farmers making a good living. After all, they make it possible for me to not have to farm so that I can earn a decent living doing something different, and I really appreciate that. Farmers produce wealth, something that we need more of right here in Virginia. So that we can all pay taxes to pay for roads built with state-borrowed money, for example. It’s not like we didn’t all have enough debt already, you know?
But hey, with the USD yielding zero percent thanks to
Rudolf vonHavenstein Ben Bernanke, a carry trade is a carry trade after all, it doesn’t really matter what currency funds it. Oh wait, it DOES matter when it is the global reserve currency doing so, which it is in this case, so the hot money sloshes globally and really really fast. And, wonder of wonders, prices for everything denominated in dollars (practically everything, like food, fuel, and food/fuel) start to rise.
Most Americans will survive higher food prices; people living on the national average 2 bucks a day in Egypt, not so much. It might be our currency, but it’s your problem, world.