Tuesday, April 15, 2008
"Corn, Soybeans Rise on 'Buying Panic to Avoid Food Shortages"
That was the title of this linked article on the front page of Bloomberg News.
We have been forecasting a very "challenging" environment for agricultural production and the food supply for several years. Back in 2005, my friends and colleagues on Wall Street would tell me to "tone it down, you sound like some kind of nut". That may or may not be true, but the food crisis that is rocking Asia right now could easily be visited upon North America sometime in the next decade - and as early as 2010.
Already 28 million Americans receive food assistance, slightly less than one out of ten Americans - and thankfully, we are currently capable, but just barely, of rendering that assistance. This could change quite suddenly.
While the price of crude oil has risen over 10 fold, 1000%, in less than 10 years. Natural Gas has gained "only" 400%, and it is Natural Gas that is the primary feedstock for fertilizer. This important input, and its important correlation to total food production is under great pressure, and that pressure is increasing. Americans should look overseas to see what their own future might (will) hold.
Mentatt (at) yahoo (dot) com
Posted by The Short Story Man at 4:09 PM