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Food Prices Jump Most on Record as War Sparks Supply Chaos

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Global food prices are surging at the fastest pace ever as the war in Ukraine chokes crop supplies, piling more inflationary pain on consumers and worsening a global hunger crisis.

The war has wreaked havoc on supply chains in the crucial Black Sea breadbasket region, upending global trade flows and fueling panic about shortages of key staples such as wheat and cooking oils. That’s sent food prices — which were already surging before the conflict started — to a record, with a United Nations’ index of world costs soaring another 13% last month. . .

Ukraine’s ports are closed and many vessels are avoiding the region, which accounts for about a quarter of all grains trade. Farmers in Ukraine, the top sunflower-oil exporter, are expected to drastically cut crop plantings and the nation is struggling to export supplies already harvested. Elsewhere in the world, high energy and fertilizer prices are raising food-production costs, which is feeding through to bigger grocery bills or threatening output. . .

The UN’s Food and Agriculture Organization’s gauge of global prices has jumped more than 50% since mid-2020, eclipsing levels seen in 2008 and 2011 that contributed to global food crises. The UN has warned that prices could still climb much more. (Read more from “Food Prices Jump Most on Record as War Sparks Supply Chaos” HERE)

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The Great Sequester Panic

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Photo Credit: Reuters Prepare for the end of food safety as we have known it. For a breakdown in public order. For little children languishing in ignorance. If only Edward Gibbon were here to chronicle the devastation. On March 1, the fabric of our civilization begins to unwind.

That’s when the economy begins to stall and we turn our back on our values, all because the federal government will have to begin to cut a few tens of billions of dollars from the largest budget the world has ever known.

This is the lurid fairy tale spun by President Barack Obama. In the fight over the sequester, he is resorting to the tried-and-true (and tiresome) strategy of every official confronted with budget cuts he doesn’t want to implement, from the commander in chief to a lowly bureaucrat toiling at some school district: maximize the scare-mongering and pain.

In Hans Christian Andersen terms, Obama is the princess and the sequester is the pea. Over the next 10 years, the sequester amounts to a $1.16 trillion cut, or roughly 3 cents on every federal dollar. If we can’t squeeze a couple of pennies out of every dollar, we might as well begin our great national bankruptcy proceedings right now.

This year we are supposed to cut $85 billion from a $3.5 trillion budget. And it won’t even be that much. According to the Congressional Budget Office, the federal government won’t be able to cut the full $85 billion. It will manage to cut only about half that in 2013.

Read more from this story HERE.

Cash-Strapped Farmers Feeding Candy to Cows

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Cattle farmers struggling with record corn prices are feeding their cows candy instead.

That’s right, candy. Cows are being fed chocolate bars, gummy worms, ice cream sprinkles, marshmallows, bits of hard candy and even powdered hot chocolate mix, according to cattle farmers, bovine nutritionists and commodities dealers.

“It has been a practice going on for decades and is a very good way to for producers to reduce feed cost, and to provide less expensive food for consumers,” said Ki Fanning, a livestock nutritionist with Great Plains Livestock Consulting, Inc. in Eagle, Neb.

Feeding candy to cows has become a more popular practice in tandem with the rising price of corn, which has doubled since 2009, fueled by government-subsidized demand for ethanol and this year’s drought. Thrifty and resourceful farmers are tapping into the obscure market for cast-off food ingredients. Cut-rate byproducts of dubious value for human consumption seem to make fine fodder for cows. While corn goes for about $315 a ton, ice-cream sprinkles can be had for as little as $160 a ton.

“As the price of corn has climbed, farmers either sold off their pigs and cattle, or they found alternative feeds,” said Mike Yoder, a dairy farmer in Middlebury, Ind. He feeds his 400 cows bits of candy, hot chocolate mix, crumbled cookies, breakfast cereal, trail mix, dried cranberries, orange peelings and ice cream sprinkles, which are blended into more traditional forms of feed, like hay.

Read more from the story HERE.

Alaska Feed & Food Prices Set to Soar

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I’m pretty sure that most readers here, don’t really live under rocks. And, they most certainly do not swallow the mainstream media news bites for everything. Nope, I am positive you all are very good at ferreting out your own news sources for reliable news and information.

So it should come as no shock to you that the drought, coupled with market factors, is going to have a deep and lasting effect on local food prices. In addition to a very poor harvest in some areas, the effects may cause problems with the coming growing seasons too, based on what I am reading lately. Read at AgWeb and other farming websites to gain an idea of the scope of the problems. There is also an excellent map showing drought conditions HERE.

So here is a tidbit that might have escaped your attention: The EPA issued new emissions standards a while back…..this time, they apply to maritime traffic. To lessen these emissions, they are requiring that the cargo ships use a low sulpher fuel mix, in place of the more typical (and much cheaper) bunker fuel that is typically used. TOTE has reached an agreement that allows them to continue to use the normal fuel, based on their promise to overhaul the ships…they are planning on converting to LNG over the next four years. What do you suppose it costs for such a conversion? We, the end consumers, will end up paying for that compliance to the new EPA rules, it’s a given.

Now, if you don’t know the intracacies of shipping to Alaska, that’s fine-but it helps to know a few things, so that when you hear about freight rates, surcharges, and so on, you’ll have an idea what it means on the grocery and feed store shelves. First, the major shipping companies establish a rate for containers, usually twice a year. I believe that this rate may be governed by regulation, but I am not positive. In addition, there is usually an added fuel surcharge. This is applied in addition to the rate, and has been running about 32 percent for the past couple of years. That is, base ship rate, plus 32 percent. (A few years back it was over 35, btw) So if the container costs you $5000 to ship, you will pay an additional $1600, or, $6600 for that container. Most containers have a limit as to weight, but in general, if you can “make weight” you will end up with the cheapest per pound price. Bulky, lightweight items end up costing more, on a per pound basis, due to volume. (Also known as cube if you are shipping LTL, or “less than load”) Now, there is an additional charge being added: Another 32 percent. What their rationale is for adding this, I have no idea but I presume it ties into the increased fuel and expected conversion costs.

So what does all this really mean? Scarce or nonexistent harvest, coupled with very high freight basically means we’re screwed. Royally and completely. Alaska gets over 90% of products through the port, via shipping containers. If you ask the folks working at the local WalMart, they are telling their customers to expect a price increase of as much as 40 percent on the very next shipment. This is due in small part to scarcity from the drought, but mostly due to freight charges. Just yesterday, a family member was told to expect as much as 140 percent increase in feed by spring. And no, that it not a typo. When the full effects of the drought are seen….it’s going to be pretty ugly. Many head of cattle were culled, meaning a temporary drop in price as the market was glutted-this is still ongoing, by the way. Same thing for hogs, and chickens. Now would be a very good time to stuff the freezer if you can. Next year, there will be a reduced number of livestock available, because much of what was slaughtered were producing females-due to either not having pasture, or no hay available, or feed costs prohibitive if shipped into a drought area.

Read more from this story HERE.

European Union Abandoning Crop-Based Biofuels Due to Food Crisis, Environmental Concerns

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Photo credit: Sweeter Alternative

The European Union will impose a limit on the use of crop-based biofuels over fears they are less climate-friendly than initially thought and compete with food production, draft EU legislation seen by Reuters showed.

The draft rules, which will need the approval of EU governments and lawmakers, represent a major shift in Europe’s much-criticized biofuel policy and a tacit admission by policymakers that the EU’s 2020 biofuel target was flawed from the outset.

The plans also include a promise to end all public subsidies for crop-based biofuels after the current legislation expires in 2020, effectively ensuring the decline of a European sector now estimated to be worth 17 billion euros ($21.7 billion) a year.

“The (European) Commission is of the view that in the period after 2020, biofuels should only be subsidized if they lead to substantial greenhouse gas savings… and are not produced from crops used for food and feed,” the draft said.

A Commission spokeswoman said the EU executive would not comment on the details of leaked proposals.

Read more from this story HERE.

Pacific Rim Nations: Food Security Mounting Problem

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Photo Credit: NASA Goddard Photo & Video

Asia-Pacific leaders focused their attention on rising concern over food security on Sunday, as they prepared to wrap up their annual summit with an agreement to slash tariffs on trade in environmental goods and a call to keep markets open even in hard times.

Food security “is one of the most acute problems of our time,” Russian President Vladimir Putin said in convening Sunday’s second and final “informal retreat” of the Asia-Pacific Economic Forum in this far eastern Russian seaport.

“Without ensuring food security, we cannot achieve our goal of enhancing the quality of life for our people,” he said before the closed door session got under way.

The explicit focus on food security by the leaders of the 21-member APEC reflects abiding concern over the potential for food prices to surge to politically volatile levels.

Current prices are high, though they remained flat in August and are below the levels that triggered rioting and unrest in parts of the developing world in 2007-2008. Another food crisis, in 2010-2011, also caused hardships for poorer consumers, especially in countries heavily dependent on food imports.

Read more from this story HERE.

Global food crisis looms as grain prices soar

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What looks to be the worst U.S. drought in a quarter of a century has given rise to an old-fashioned commodity rally on world markets, with key grain prices hitting highs which caused food crises in vulnerable parts of the globe last time around.

Seeking to protect their populations from hunger this time, many countries relying heavily on imports have held off for now, touting healthy stock levels and hoping other sources will come through and bring prices down.

But their hopes may be dashed if they all return to market at once.

With so much of the world putting faith in a record U.S. corn crop, it is little wonder that prices have surged around 40 percent in the past three weeks as relentless dry weather melted yield expectations for cereals. Soybeans are at record highs, while wheat is not far behind.

“Production potential looked great and it kind of lulled these end-users into a false sense of security. At that point we were seriously looking at (corn) prices under $5 if weather conditions remained ideal, but now we’ve rallied sharply higher and never looked back,” Jefferies Bache analyst Shawn McCambridge said.

Read more from this story HERE.

Photo credit: Giro555