Food Shortages and Rationing

[Highstreet]

I figure this will probably be moved, but I thought it was important that more people here see it.

Food Shortages and Rationing are appearing on the Coasts.....
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http://www.cbsnews.com/stories/2008/04/23/earlyshow/main4036816.shtml

As Food Prices Soar, Some Shortages Appear
Some Stores Even Rationing Staples Such As Rice; Grocers Blame Corn Diverted For Ethanol

April 23, 2008

(CBS) A growing global shortage of food staples such as rice has led the head of the World Food Program to say a "silent tsunami" of hunger is sweeping through some of the world's poorest nations.

What's more, "Global food stocks for basic commodities like rice, wheat, other basic commodities have fallen so low that we're actually starting to see shortages here in the U.S.," Scott Faber of the Grocery Manufacturers Association observed to Early Show co-anchor Maggie Rodriguez Monday. "This is a significant problem not just here, but especially in parts of the world where people are living on less than $1 a day."

CBS News correspondent Bianca Solorzano reports actual and feared shortages, which accompany skyrocketing prices, have led some stores to start rationing the hardest-hit staples.

In a warehouse store in Mountain View, Calif., manager Stephanie Gordon told CBS News she's "been with Costco for 21 years and I haven't seen it like this before," with many consumers stocking up on staples such as rice out of growing concern over availability. It's limiting amounts shoppers can scoop up.

The hottest seller at that Costco at the moment? Fifty-pound bags of jasmine rice -- even though rice's price has gone through the roof. A 20 pound bag that sold for $9 just two months ago now goes for $16.

Other groceries are also way up over this time last year: flour by 13 percent, milk by 10 percent and eggs by 30 percent.

The short supplies contribute to rising prices of food, along with zooming costs of the fuel to transport it.

 

[malkusm]

I've been monitoring this very closely over the past few months. Wheat and rice prices are through the roof because of very low stockpiles of them, as the article says.

The interesting one to me though is corn. Corn futures went up throughout the winter on very light (pre-electronic age) trading volume). The corn futures market is now closely resembling the ethanol market due to the government mandates for ethanol levels in gasoline. Thus, the U.S. government has taken away the one agricultural commodity that could be helping these poorer countries right now by increasing demand for ethanol - not once, but twice (by perpetuating violence in the Middle East at the supply lines).

If the ethanol market were not in place, this would cause corn prices to be much lower. The result of this would be much more acreage in U.S. farmland planted in wheat, rice, and soybeans (whose prices would remain as high), and the sudden increase in supply over the summer would drive the price down to normal levels. In the meantime, corn could be used as a stopgap to feed these poorer nations until the price increase made it unreasonable (or until other crop harvests came in).

Just my take, but our government has effectively ruined these markets from being effective, and the result is no cheap alternative to feed the parts of the world that desperately need it.