Saturday, January 12, 2008

Food Crunch

"The greatest challenge to the world is not US$100 oil - it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically" - [CN - dopamine is one helluva drug.....,]

Full story in the Financial Post

The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.

At the centre of the imminent food catastrophe is corn -- the main staple of the ethanol industry. The price of corn has risen about 44% over the past 15 months, closing at US$4.66 a bushel on the CBOT yesterday -- its best finish since June 1996.

This not only impacts the price of food products made using grains, but also the price of meat, with feed prices for livestock also increasing.

"You're going to have real problems in countries that are food short, because we're already getting embargoes on food exports from countries, who were trying desperately to sell their stuff before, but now they're embargoing exports," he said, citing Russia and India as examples.

"Those who have food are going to have a big edge."
With 54% of the world's corn supply grown in America's mid-west, the U.S. is one of those countries with an edge.