Thursday, January 14, 2010

usda covering up pending food shortage?

WND | While trend experts, economists and investment gurus have been predicting food shortages for some time, new evidence indicates the U.S. Department of Agriculture may be covering up the greatest food shortage in modern history.

Beginning in 2009, global agricultural markets faced a supply and demand imbalance, caused by a substantial drop in output resulting from the financial crisis and extreme weather around the world.

At the same time, growing economies in Asia have begun consuming record amounts of raw goods, particularly food staples as consumers move to higher protein, higher calorie diets. When supplies are reduced and demand is constant or growing, prices normally rise. Industry observers and economists remained mystified by the low agricultural prices in spite of this trend.

One analyst, Eric deCarbonnel from MarketSkeptics.com believes the answer is found in data he believes the U.S. Department of Agriculture has manipulated to keep food prices low. "Instead of adjusting production estimates down to reflect decreased production, [the USDA] adjusted estimates upwards to match increasing demand from China. In this way, the USDA has brought supply and demand back into balance (on paper) and temporarily delayed a rise in food prices by ensuring a catastrophe in 2010," he said.

DeCarbonnel points out that across the Midwest United States, many counties already have been declared federal disaster areas, which is defined by a decrease in crop production of at least one type by 30 percent or more. Hundreds of other counties across the country have experienced crop failures of 10-20 percent, not enough to qualify as federal disaster areas but still contributing to the overall poor harvest.

In some states, including Oklahoma, Louisiana, Arkansas and Alabama, the majority of counties have been declared disaster areas, and yet the USDA is predicting record harvests.

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