Load Up the Pantry
HOLLY NOTE: We have posted articles continuously for the past year detailing depletion of US and global grain reserves to record lows, grain thefts in Kansas, food shortages, rising food prices and resulting food riots, in hopes that you are getting this message: As tough as it might be right now, this is definitely the time to purchase significant food stocks. If you have missed any of these articles, please check the Food & Water ARKives for 2008 and 2007. This issue is too vital for you not to get the entire picture.
The Midwest is at the heart of our wheat and corn production. All it will take is one bad drought - which Iowa expects - and now possibly a global drought - and our food supplies will take a serious hit. Extreme flooding like the Midwest is experiencing can wipe out food crops in a single day. With escalating fuel costs, there will come a point when truckers are unable to make a living and simply have to shut down.
Daily news address rampant concerns over rice, wheat, corn and soybean shortages. And now food rationing and hoarding is creeping into reality...
It's not enough that a huge portion of our grains goes to biofuel, tenuous crops are further impacted by a higher global demand for wheat-based foods on dinner tables. If drought, as addressed above, hit's America's read basket our remaining crops will be in deep weeds.
Stock up now - buy in bulk - and pack for long-term storage any grain products and foods you regularly consume. It's easy, it's great insurance and will save you loads of money in the long run. The longer you delay, prices are only going to escalate, your options will dwindle, along with selection. Please do this before your options close.
When reading news articles, it is our hope you'll read beyond the headlines and hear the unspoken message - a quiet urging to prepare.
Japan's Hunger Becomes a Dire Warning for Other Nations
Food Rationing Confronts Breadbasket of the World
UN Chief Warns World Must Urgently Increase Food Production
Already We Have Riots, Hoarding, Panic: the Sign of Things
A Global Need for Grain That Farms Can’t Fill
Surging costs of Groceries Hitting Home
Wheat Supplies, Already Tight, May Be Hurt by Global Drought
FAO Sees Record World Food Prices Staying
Forget Oil, the New Global Crisis is Food
Food Inflation and Food Shortages
Food ... and How It's Going to Change the World
Potential Drought Predicted for Iowa and What That Means for Food Supplies
Food Prices to Continue to Climb in 2008
Tight Supply May Hit Grain Stability
Fears Over Food Price Inflation
Australian Food Prices to Skyrocket
Saudi Food Prices Seen Up 30% in '08
US Farms Data Feed Cereal Price Hike Fears
Grains Likely to be More Volatile
‘Panic Buying’ in the Grain Markets
April 22, 2008
Wall Street Journal
I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.
No, this is not a drill.
You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.
Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.
"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)
Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.
Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.
And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.
These are trends that have been in place for some time.
And if you are hoping they will pass, here's the bad news: They may actually accelerate.
The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.
Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.
The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.
A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.
You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.
If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.
The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.