World Events
Topic: US / world Food Shortage

#	Author	Message
11	Kar2oonMan Thu 4/24/2008 10:16p	>>If I eat rice twice a year, it's too much.<< I hear ya! If I eat rice twice a year, it's usually in the form of Rice Krispies. >>Fake a shortage and double your profit. It's the American Way.<< Exactly.
12	fkurucz Fri 4/25/2008 8:28a	From what I have been reading the problem is that many poor countries have pegged their currencies to the US dollar. As many already know Uncle Buck has been taking a bit of a nose dive compared to a lot of other currencies, which means that if your currencty is pegged to ours then you too have been taking a nose dive. This currency devaluation has caused the US dollar prices of commodities (like rice) to rise quickly. If you live in the US its a problem, but not a castastrophe. If you live in the 3rd world it is a catastrophe.
13	plpeters70 Fri 4/25/2008 8:34a	But in typical American fashion, we'll ignore the problems that others are facing because "we're just fine here". It's amazing just how short sighted the American people can be. When will we get it through our heads that what effects the rest of the world effects us too.
14	EighthDwarf Fri 4/25/2008 8:46a	Food is a commodity. Speculators have driven futures prices artificially high for corn, rice, wheat, soy beans, etc. Some of the rise in prices is justified (because of rising global demand, using food for fuel, etc.) but most is not. We have gone from an internet bubble to a housing bubble to a commodity bubble. Watch this bubble to burst soon like the others. The question is, what will be next?
15	utahjosh Fri 4/25/2008 8:53a	My bets are on the Churro Bubble. Prices are artificially high. Watch for Popcorn stocks to grow. Or is it stalks?
16	fkurucz Fri 4/25/2008 11:16a	<<Food is a commodity. Speculators have driven futures prices artificially high for corn, rice, wheat, soy beans, etc. Some of the rise in prices is justified (because of rising global demand, using food for fuel, etc.) but most is not.>> Consider that the dollar has lost almost half its value compared to the Euro. If a commodity holds steady in Euros its dollar price would have nearly doubled. Of course the idea is that the dollar is the world's reserve currency, and that global prices are in dollars. But as the dollar constinues to sink it is not unexpected at all that commodity prices in dollars should skyrocket.
17	alexbook Fri 4/25/2008 11:22a	>>My bets are on the Churro Bubble. << LOL
18	Kennesaw Tom Fri 4/25/2008 12:36p	Last night one of our major TV Stations did a news report on how much produce is coming from outside the country. I find it hard to believe there is a food shortage when close to 30% of our produce is coming from third world countries. Kroger Band apple juice is from china, Pineapple from Thailand, produce from Mexico.
19	plpeters70 Fri 4/25/2008 12:40p	I don't know this for a fact, but if the First World is importing most of it's food and prices are going up, that means the prices of the food in the Third World countries would increase as well. Since farmers in the Third World would make more money selling to the First World, what is their incentive to sell at home for cheaper prices that the locals can afford? Wouldn't they rather go for the big profit made by exporting to wealthier countries?
20	Mrs ElderP Sat 4/26/2008 7:15a	As I understand it, and I fully admit my understanding is fallible: 1. Commodity speculating has *something* to do with it, but isn't the whole problem. 2. Diverting corn for ethanol has something to do with it. The rising cost of corn affects every thing that eats corn for feed, like chickens and cows. It also affects everything with high fructose corn syrup, i.e. everyting processed. 3. Rising costs for oil has something to do with it, both because of the transporting of food and somehow that raised the cost of nitrogen fertilizer, don't ask me how. 4. Droughts in Austraila have something to do with it (wheat). And Lastly: 5. (Stay with me here) In the past 10+ years trade barriers have gone down. US Agribusiness is incredibly efficent at producing food, and even with transportation costs we were in a position to flood world markets, such as Haiti, with food. This was great for the poor who had access to cheaper food, but at the same time created a disensentive for local farmers to farm. So, when the world system has a hiccup and the price of foriegn food goes up there is no local supply. The US AID is trying to rectify this problem (the local supply problem I mean). For example, when there is a famine in, say, Somalia, instead of shipping Kansas wheat to Somalia US AID is trying to get Congress to let them buy wheat from farmers in the regions in Africa surrounding Somalia. Then the African farmers have an incentive to keep farming, instead of being squeezed out of the market by free food. Overall though, of course this is a bigger problem for people who spend a bigger percentage of their pay on food. I figure at the absolute most we spend about 17% of our net income on food, and that includes eating out. If I'm really careful at the grocery store and we limit eating out that can go down as low as 10%, and that's our NET income, not our gross. When food goes up 15% now I'm paying 19% to 12% of my income. I can probably make that work. Many of the worlds poorest use 75% to 100% of their income on food. So, when prices go up by even 10% there is NO wiggle room. Not to mention the fact that most of the worlds poor (Egypt, Haiti, India, Mexico, all of Latin America, and probably lots more) live on government subsidised food. In Mexico for example, ElderP says, the government makes sure that the price of tortillas doesn't go above a certain price.

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