Get Ready for Higher Food Prices

From Omaha.com:

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.

It is the main ingredient in Cap’n Crunch and Doritos. Turned into syrup, it sweetens most soft drinks and many foods.

Corn also is part of the agricultural blend that fuels the economies of Nebraska, Iowa and other farming states. Iowa is the nation’s top corn-producing state; Nebraska is third.

Shoppers could see higher grocery bills as early as three months from now, though most of the impact won’t be felt for another six months, said Scott Irwin, an agricultural economics professor at the University of Illinois.

Chicken prices are among the first to rise because the bird’s life span is so short that higher feed costs get factored in quickly, he said. Price hikes for hogs take about a year and cattle two years. Prices on packaged foods take six or seven months to rise.

I’d plan more for a one or two month window. Start stocking up now. Farmer’s are set to make some money, and you micro-farmers and hardcore gardeners may be able to cash in as well:

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.

It is the main ingredient in Cap’n Crunch and Doritos. Turned into syrup, it sweetens most soft drinks and many foods.

Corn also is part of the agricultural blend that fuels the economies of Nebraska, Iowa and other farming states. Iowa is the nation’s top corn-producing state; Nebraska is third.

Shoppers could see higher grocery bills as early as three months from now, though most of the impact won’t be felt for another six months, said Scott Irwin, an agricultural economics professor at the University of Illinois.

Chicken prices are among the first to rise because the bird’s life span is so short that higher feed costs get factored in quickly, he said. Price hikes for hogs take about a year and cattle two years. Prices on packaged foods take six or seven months to rise.

While corn prices soar some of you boutique producers are going to see more traffic to farmer’s markets as supermarket prices meet, then exceed, specialty prices. People looking for deals on food will be exposed to small market farms as well. Don’t bother growing corn, high nutrition tasty plants that can be harvested more than once will be in demand soon, as will their seeds.

In the meantime, check your circulars there’s some good deals to be had. Go shopping for some staples and now might be the time to  buy some food buckets and sprouting kits.

Prices Starting to “Creep Up” According to USA Today

“Creeping up” means something different to Paul Davidson of USA Today than it does to me. Food prices are going up at a rapid pace but because the government’s inflation figures (which conveniently leave out food prices) are ginned up to show low inflation people like Davidson can write dross like this:

The near-zero inflation era may be ending. Prices are rising slightly, and economists expect a steady climb as the recovery gains steam.

In recent earnings reports, some retailers and manufacturers have said they’re boosting prices this year on clothing, groceries and other items after holding firm in 2010.

The uptick is largely driven by surging food, energy, cotton and other global commodity prices as economic growth heats up significantly in China and emerging markets.

[…]

he consumer price index in December rose 1.5% from a year ago, the most since May. Yet, wholesale prices for finished goods jumped 4%, indicating firms were squeezed. Federal Reserve Chairman Ben Bernanke dismissed inflation worries on Thursday.

Paul Ashworth of Capital Economics expects 2% inflation this year, still well below pre-recession rates of 3% to 4%. But higher food and gasoline prices could trim consumer spending by two-tenths of a percentage point, he says. Among those raising prices:

•VF Corp., maker of Wrangler and Lee jeans, plans to raise prices as denim costs have been pushed up by soaring cotton prices. “The idea is not to raise prices enough to send consumers back to their hidey holes,” says Vice President Cindy Knoebel.

•Grocer Supervalu is raising prices from 3% for items such as cereal to as much as 14% for cooking oil. “We simply cannot absorb these continuing cost increases ourselves,” says spokesman Jeff Swanson.

•UPS, citing a 26% jump in 2010 fuel costs, plans to raise its fuel surcharge Monday to 6% from 5.5% for ground packages and to 10% from 9% for air service.

•Tire costs for retailer Hogan Tire in Northern Virginia jumped 18% each of the past three years due partly to rising rubber costs. It’s raised prices and cut margins 3% in three years. Tire revenue is off 12% as consumers switched to low-price brands.

Even that doesn’t sound like a “slight” increase. But look at these futures prices via Zero Hedge:

One of the benefits of America finally seeing what Zimbabwe went through as it entered hyperinflation, ignoring for a second that the Zimbabwe stock market was the best performing market, putting Bernanke’s liquidity pump to shame, is that very soon everyone will be naked, once companies finally realize they have no choice but to pass through surging input costs. And while some may be ecstatic by the S&P’s modest rise YTD, it is nothing compared to what virtually every single agricultural product has done in the first month of 2011. To wit: Corn spot up 7.76%, wheat up 5.63%, Rice up 10.08%, Hogs up 10.16%, Sugar up 5.64%, Orange Juice up 3.33%, and cotton…. up 17.08%. That’s in one month!

As usual there’s charts to view so pop over and check it out. None of this seems like a “creep” in prices to me. Inflation is much higher than economists claim.

Cold Driven Fish Die off Feared in Texas

The die offs may be perfectly natural but they are adding up world wide. Fish kills are especially alarming for the survivalist. Your plans for harvesting fish after a collapse might go from hard work to impossible dream. From The Brownsville Herald:

A Texas Parks and Wildlife Department official said there were reports of floating fish as a cold snap hit South Texas Thursday.

A day earlier, the department had announced the temporary closure of saltwater fishing spots along the coast, including Brazos Santiago Pass near Brownsville.

On Thursday, Mark Lingo, the Lower Laguna Madre Ecosystem leader, said floating fish were reported near the pass.

“We’re on standby right now,” Lingo said. “We’re watching the weather and water temperatures. … We’re probably looking at a fish kill, but we don’t know how substantial it will be at this point.”

On Thursday morning water temperatures were below the “lethal threshold for a lot of fish” — 4 degrees to 10 degrees Celsius, or about 39.2 degrees to 50 degrees Fahrenheit, he said. A 3.9-degree Celsius reading, or 39 degrees Fahrenheit, came from the Coast Guard Thursday morning, he said.

A major freeze in 1989 dropped the temperature in Brownsville to 16 degrees, killing an estimated 11 million coastal fish, according to a TPWD press release. Texas has about two million acres of bays and estuaries that are susceptible to freeze, the same release said.

The magnitude of a possible fish kill likely won’t be known until this weekend or as late as Monday, Lingo said, because dead fish won’t float until temperatures warm up.

At least there’s some good news in this instance:

Despite the alarming nature of fish kills brought on by extreme weather, Lingo said it won’t necessarily affect the ecosystem negatively and other wildlife like shrimp and crabs will be unaffected.

“In the short term there will be less fish in the bay,” Lingo said. “In the long term, the fish will decompose and add nutrients. … It’s kind of like putting fertilizer on a field.”

The added nutrients, he said, will help algae grow, thereby increasing the number of shrimp because of a larger food source. This sort of ecosystem change has been seen in the past after cold snaps, he added.

Of course fishermen and charter boats will probably have a hard couple of years.

Strange New Blight Destroying Crops in Oregon

Uh-oh. This is not what we need right now:

The Oregon Department of Agriculture and Oregon State University are investigating the yellowing of upward of 40,000 acres of wheat in Umatilla and Morrow counties.

So far, the cause is a mystery, and researchers do not know if the problems in the two counties are related.

In early November, Umatilla County growers noticed wheat fields turning yellow and dying, OSU Extension soil scientist Don Wysocki said.

Sixteen fields from three to 10 miles northwest of Pendleton were affected, Wysocki said. They are “more or less but not completely contiguous,” he said. Not every field in the area was affected.

The area was predominately planted to soft white Clearfield variety ORCF-102, but other varieties were also affected, Wysocki said.

“There’s probably more than one thing going on in these particular fields, like in any field,” he said.

OSU Morrow County Extension associate professor Larry Lutcher said 30,000 to 40,000 acres of wheat in his county have plants with yellow or purple tips. The discoloration spreads inward and downward on the leaf. In some cases, plants are completely desiccated and will not recover.

The symptoms have been observed in many fields in the county, Lutcher said, but do not appear tied to any particular location.

“Most of the symptoms in Morrow County are unlike anything I have ever seen,” Lutcher said.

Lutcher said he doesn’t believe the problem will spread to other fields, but he can’t be certain.

“This does appear to be a new problem — a problem that no one seems to have experience with,” he said.

Read the rest. With other pressures on food crops this is something to keep an eye on.