Food skyrockets to highest prices ever

Source: Natural News
Figures recently released by the Food and Agriculture Organization (FAO) index of 55 food commodities indicates that worldwide food prices hit a record high in December. Though the costs of some food commodities like rice, corn and soy actually decreased, oil seeds and sugar jumped significantly due to various factors including erratic weather and droughts, according to reports.

In the past, such ups and downs on the commodity market did not immediately affect actual food costs for consumers, but some experts say that this is no longer the case, and that "food inflation" will occur right alongside the commodity price gains. And rapid food inflation has already taken place in India, for example, with recent reports indicating that the country experienced an overall food inflation rate of 18 percent in 2010.

Low food stocks, droughts and poor weather conditions have all contributed to the escalating food crisis, which has led many nations to cut off exports in order to save supplies for their own populations. And the resulting global shortages only exacerbate the problem further as importing nations scramble to source needed commodities for their own populations.

Abdolreza Abbassian, a senior economist at the FAO, explained in a Bloomberg report that since not all commodity prices are rising, the overall indicator can be deceiving. Even so, prices across the board may increase as a result of a domino effect from the commodities that are in short supply, or even from the same conditions like droughts and poor weather that have caused shortages and price increases in the other categories.

Rising global food prices and supply uncertainty are just another reason why self-sufficiency is vital to long-term survival. Individuals who grow their own food and live off their own land as much as possible will not be affected by volatile supply and demand issues that affect the global food market.

Food prices rise sharply - and there's more to come

Source: SFGate

For the first time since 2008, inflation is hitting consumers in the stomach.
Grocery prices grew by more than 1 1/2 times the overall rate of inflation this year, outpaced only by costs of transportation and medical care, according to numbers released Wednesday by the U.S. Bureau of Labor Statistics.
Economists predict that this is only the beginning. Fueled by the higher costs of wheat, sugar, corn, soybeans and energy, shoppers could see as much as a 4 percent increase at the supermarket checkout next year.
"I noticed just this month that my grocery bill for the same old stuff - cereal, eggs, milk, orange juice, peanut butter, bread - spiked $25," said Sue Perry, deputy editor of ShopSmart magazine, a nonprofit publication from Consumer Reports. "It was a bit of sticker shock."
But it makes sense. Since November 2009, meat, poultry, fish and eggs have surged 5.8 percent in price. Dairy and related products have gone up 3.8 percent; fats and oils, 3 percent; and sugar and sweets, 1.2 percent.
While overall inflation nationwide was 1.1 percent, grocery prices went up 1.7 percent nationally and 1.3 percent in the Bay Area, said Todd Johnson, an economist for the Bureau of Labor Statistics office in San Francisco. "The largest effects on grocery prices here over the last month were tomatoes, followed by eggs, fish and seafood."

Produce steady

Across the country, the price of produce has remained fairly steady. But the U.S. Department of Agriculture predicts that next year the price of fruits and vegetables, like many other food commodities, could go up. The government agency is forecasting a 2 to 3 percent food inflation rate in 2011 - a pace that is not unusual in a rebounding economy.
"We usually err on the conservative side," said Ephraim Leibtag, a senior economist with the USDA, adding that "2011 holds a bit of uncertainty, so I wouldn't be surprised if it goes higher. If it goes to 6 percent, then we should be worried."
Michael Swanson, an agricultural economist at Wells Fargo, said that as long as corn, soybean and energy prices continue to climb, food inflation could reach 4 percent in 2011.
"The USDA always plays it safe," he said, adding that the nation is likely to see the biggest increases since 2008, when the food inflation rate was a record 5.5 percent.
The global demand for corn - used for food and ethanol - has swelled so much that feed costs for farmers and ranchers are being passed on to the consumer, Swanson said.

Gas, diesel play a role

Gas and diesel prices also are playing a role. Wheat costs went through the roof this year when 20 percent of Russia's crop was destroyed by drought and wildfires, causing the country, the third-largest producer in the world, to ban exports of the grain. The price of sugar, also used for ethanol in parts of the world, is priced at a two-decade high.
Kraft Foods Inc., one of the world's largest food producers, has already announced plans to increase its prices because of mounting ingredient costs and flagging sales. General Mills, maker of everything from flour and baking mixes to cereal and Yoplait yogurt, has said it, too, will raise some of its product prices in January. Experts said consumers can expect the same from Kellogg's and Nestle.
The silver lining, Swanson said, is that retailers such as major supermarket chains and big-box stores are likely to push back at wholesalers to keep prices from jumping too much.
"Food is a high-frequency driver," he said. "So if stores like Walmart and Kmart want to get shoppers in the door, it's to their benefit to keep prices low."


Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/12/15/MN571GQRDL.DTL#ixzz18NuTjSL3

Rising food prices may start with seeds

Farmers say consolidation in the industry means they're forced to buy more costly seeds. But Monsanto, the world's largest seed firm, says competition 'is alive and flourishing.'

For 40 years, farmer Todd Leake and his family have battled bitter cold, hungry pests and a short growing season to coax soybeans out of their fields in eastern North Dakota.

The one thing they never had to fight for, though, was their seeds.

A decade ago, salesmen from as many as 50 seed companies would compete for their dollars. Each would promise healthier plants, richer yields or a better discount.

Today the Leakes have little choice: There are four seed companies in their area, and all sell seeds that include genetic traits patented and licensed by Monsanto Co., the world's largest seed firm.

"There's basically nothing else available," said Leake, 48. "You have to use their seeds and pay their prices."

The concerns of farmers such as Leake will take center stage in Ankeny, Iowa, on Friday as the Justice Department and U.S. Department of Agriculture kick off the first of a yearlong series of public meetings to examine whether antitrust practices in agriculture are driving food prices higher.

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