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  • The Grocery Price Shock Is Coming to a Store Near You

    Source: https://www.msn.com/en-us/money/mark...ou/ar-BB1fZDaC

    The Grocery Price Shock Is Coming to a Store Near You
    Megan Durisin and Deirdre Hipwell 1 day ago

    (Bloomberg) -- Corn, wheat, soybeans, vegetable oils: A small handful of commodities form the backbone of much of the world?s diet and they?re dramatically more expensive, flashing alarm signals for global shopping budgets.

    This week, the Bloomberg Agriculture Spot Index ? which tracks key farm products ? surged the most in almost nine years, driven by a rally in crop futures. With global food prices already at the highest since mid-2014, this latest jump is being closely watched because staple crops are a ubiquitous influence on grocery shelves ? from bread and pizza dough to meat and even soda.

    Soaring raw material prices have broad repercussions for households and businesses, and threaten a world economy trying to recover from the damage of the coronavirus pandemic. They help fuel food inflation, bringing more pain for families that are already grappling with financial pressure from the loss of jobs or incomes. For central banks, a spike in prices at a time of weak growth creates an unwelcome policy choice and could limit their ability to loosen policy.

    ?There seems to be sort of a bullish force behind the prices internationally,? Abdolreza Abbassian, senior economist at the United Nations? Food and Agriculture Organization, said in an interview. ?The indications are that there is very little reason to believe prices would remain at these levels. It?s more likely they will rise further. Hardship is still ahead.?

    Emerging markets, in some cases already under pressure from weaker currencies, are particularly vulnerable because food costs make up a larger share of their spending. For the poorest and often politically unstable countries, the surge in raw materials threatens to further stoke global hunger.

    ?The relentless rise in prices acts as a misery multiplier, driving millions deeper into hunger and desperation,? Chris Nikoi, the World Food Programme?s regional director for West Africa, said earlier this month. It?s ?pushing a basic meal beyond the reach of millions of poor families who were already struggling to get by.?

    The most recent crop spikes follow months of price gains fueled by booming import demand from China. Corn prices have doubled in the past year, while soybeans are up about 80% and wheat 30%. With China?s purchases continuing and a spate of adverse weather conditions threatening crops in Brazil and the U.S., there are few signs of respite. Analysts including those at Rabobank, Mintec and HSBC Global Research all see a risk of even higher prices as a result, though it will vary across markets.

    The impact on grocery shelves can already be seen in surging tortilla prices in Mexico, beef in Brazil and retail palm oil in Myanmar. In the U.S., it?s more expensive bacon and other meat cuts.

    ?Generally people see this inflation continuing,? said Tosin Jack, an analyst at Mintec, which monitors commodity prices. ?The trend will continue for some time and it will translate into consumer goods.?...

  • #2
    Only the biggest retailers are able to hold prices down at least temporarily. That could cause even more consolidation in the retail grocery industry. There could be massive food fraud and lethal adulteration of food like we saw back in 2007-2008.

    https://en.wikipedia.org/wiki/2007%E...d_price_crisis

    https://www.fda.gov/animal-veterinar...od-recall-2007



    (Heparin is derived from pigs)
    Heparin is one of the oldest drugs still in widespread clinical use. Its discovery in 1916 predates the establishment of the Food and Drug Administration. Since 1935, over 15,000 research papers have been published on the effects of heparin. Because the exact chemical formula of heparin is unknown, …

    The heparin recall of 2008

    Be careful of commodities sourced from countries under food stress.
    _____________________________________________

    Ask Congress to Investigate COVID Origins and Government Response to Pandemic.

    i love myself. the quietest. simplest. most powerful. revolution ever. ---- nayyirah waheed

    "...there’s an obvious contest that’s happening between different sectors of the colonial ruling class in this country. And they would, if they could, lump us into their beef, their struggle." ---- Omali Yeshitela, African People’s Socialist Party

    (My posts are not intended as advice or professional assessments of any kind.)
    Never forget Excalibur.

    Comment


  • #3
    The price of bacon has doubled at my local grocery store.

    Comment


    • #4
      Related to one of bertrand's links:

      The EU is considering relaxing its ban on feeding processed animal protein (PAP) to domestic livestock amid tighter oilseed protein supply and surging international prices.

      EU eyes relaxing PAP ban amid tight oilseed feed supply

      Published date: 09 April 2021

      The EU is considering relaxing its ban on feeding processed animal protein (PAP) to domestic livestock amid tighter oilseed protein supply and surging international prices.

      The PAP feed ban was introduced in May 2001 to safeguard EU livestock health after the bovine spongiform encephalopathy (BSE) disease depleted European cattle numbers. But support for the ban has been waning amid thinning alternative protein feed sources.

      EU livestock farmers have relied more heavily on using protein feeds from crushed oilseeds including rapeseed, soybean and sunflower, but domestic supply has trailed consistently below demand, pulling buyers in the import market to cover the shortfall....
      _____________________________________________

      Ask Congress to Investigate COVID Origins and Government Response to Pandemic.

      i love myself. the quietest. simplest. most powerful. revolution ever. ---- nayyirah waheed

      "...there’s an obvious contest that’s happening between different sectors of the colonial ruling class in this country. And they would, if they could, lump us into their beef, their struggle." ---- Omali Yeshitela, African People’s Socialist Party

      (My posts are not intended as advice or professional assessments of any kind.)
      Never forget Excalibur.

      Comment


      • bertrand789
        bertrand789 commented
        Editing a comment
        Emily, the people who invented factory farming are the Russian Communists. Those who are reinventing this type of production are the association of Chinese and Russians. Others provide them with what they want when they want it.
        Climate change will be a loss for many, but for some it is bingo. The elimination of permafrost on large surfaces will offer the possibility of cultivating gigantic surfaces. I doubt that these two countries, associated, on these points, wish to see things imposed ...

      • Emily
        Emily commented
        Editing a comment
        The sanctions and counter-measures are making it worse.

        As the world grapples with the coronavirus pandemic, Russia’s discovery of the world’s first cases of transmission of bird flu from animals to humans is prompting experts to warn that the country’s increasing large-scale industrial meat production could create conditions for future viruses to thrive.

        ...
        Russia has seen a boom in its domestic meat production since 2014. After the EU and U.S. imposed sanctions on some Russian businesses following the country?s annexation of Crimea in 2014, Moscow responded by introducing large-scale bans on Western food imports. As a result, over half of the country's meat and dairy imports disappeared, forcing it to increase domestic production.
        ...
        Despite the risks, Russia appears unlikely to adjust its meat production methods, fearing the impact changes might have on the economy at a time when prices are rising and living standards falling.

        ?For this we would have to change our whole food system, it seems like this has become a necessary evil we will have to learn to deal with,? said Agranovsky.

      • Emily
        Emily commented
        Editing a comment
        I just want to make it clear that French agriculture is not being criticized. We are all in this difficulty together.

    • #5
      Source: https://www.hellenicshippingnews.com...itch-to-wheat/

      High prices nibble at corn?s sway as Asian feed buyers switch to wheat
      in Freight News 28/04/2021

      Asian feed manufacturers are switching to wheat in animal rations as multi-year high corn prices constrict demand for the yellow grain widely used to fatten hogs and chickens.

      Some of the world?s top corn buyers such as China, South Korea and Vietnam are buying more wheat from Australia and the Black Sea region in the months ahead as the landed cost of corn has climbed to a rare premium to wheat, said two Singapore-based grains traders.

      Combined, those three countries are forecast to buy 26.4% of global corn imports this year, according to the U.S. Department of Agriculture, so any substitution for wheat could have a large impact on global grain trade flows.

      ?It is more attractive to use wheat, we have seen demand for Australian wheat coming from feed makers although our crop quality is pretty good and there is not much lower quality wheat which can be termed as feed wheat,? said Ole Houe, a director at brokerage IKON Commodities in Sydney.

      ?But even milling wheat (from the Black Sea region) is cheaper than corn, so the switch is happening.?

      Chicago corn futures climbed to their highest since June 2013 this week and have gained 37% in 2021, while wheat has jumped 16% since the beginning of the year to its highest since February 2013.

      Black Sea milling wheat is quoted around $290 a tonne, including cost and freight (C&F), to Asia for August shipment compared with corn at around $305-$310 a tonne, C&F, said the two traders.

      A combination of strong global demand, adverse weather in the United States and expectations of lower output in Brazil have raised concerns over global corn supplies...

      Comment


      • #6
        Focus on Ag: Grain markets at highest levels in several years
        By Kent Thiesse Farm Management Analyst and Vice President, MinnStar Bank

        <snip>

        Nearby CBOT May corn futures closed at $6.55 per bushel on April 23, which was the highest closing price for nearby corn futures since July 2013. Nearby CBOT May soybean futures closed at $15.40 per bushel on April 23, which was also the highest closing price for nearby soybean futures since July 2013.

        The rise in both CBOT prices and local cash grain prices have been driven by a combination of grain stocks adjustments by USDA, lower than anticipated U.S. corn and soybean production in 2020, lower than expected 2021 crop acreage and very strong export demand for both commodities.

        In fact, some analysts have suggested that both corn and soybean supplies for end users in portions of the U.S. could get very tight by late summer this year before 2021 commodities are available. The growing drought area in the western Corn Belt and some production reductions in South America have added to the bullish nature of the current commodity markets.

        <snip>



        ---------------------------------

        Okieman Comment: In agriculture for grains there are two types of markets: protein and energy. Soybean prices drive the protein market and corn drives the energy market. When both are very high they will influence to some extent the other grains. See immediately above the article posted by Shiloh where Asian feed manufacturers are switching from corn to wheat. This will help to drive up the price of wheat. The price of corn will effect the price of all of the other grains. The price of soybeans will effect the price of other protein sources such as peanut meal, cottonseed meal and meat/bone meal. What does this mean for the common man? It means the price of all food stuffs with a grain connection will likely go up in the near term.

        Comment


        • #7
          bump this

          Comment


          • #8
            Source: https://www.msn.com/en-us/money/comp...cid=uxbndlbing

            America is running low on chicken. Blame covid-19, a sandwich craze and huge appetite for wings.
            Reis Thebault 23 hrs ago

            It?s not like we weren?t warned. The doomsayers predicted this months ago: ?A MASSIVE CHICKEN WING SHORTAGE IS BREWING,? blared the headline of one trade publication in early February.

            But it turned out to be so much worse.

            Bloomberg News, on Thursday: ?Fried-Chicken Craze Is Causing U.S. to Run Low on Poultry.?

            In other words, not just wings, but chicken in general. Or, as Bojangles put it in a recent tweet about their tenders: ?we?re experiencing a system-wide shortage But they will be back soon!?

            It seems the poultry paucity has arrived, heralded by a series of fast-food executives describing in earnings calls their stores? struggles to stock enough chicken ? nuggets, tenders, wings, patties, all shapes and sizes ? to keep pace with legions of peckish Americans.

            ?Demand for the new sandwich has been so strong that, coupled with general tightening in domestic chicken supply, our main challenge has been keeping up with that demand,? said David Gibbs, CEO of Yum Brands, whose KFC restaurants recently rolled out a new fried-chicken sandwich.

            Charles R. Morrison, chairman and CEO of Wingstop, said this week that ?Suppliers are struggling, just as many in our industry are, to hire people to process chicken, thus placing unexpected pressure on the amount of birds that can be processed and negatively affecting supply of all parts of the chicken in the U.S., not just wings.? ...

            Comment


            • #9
              Anyone who has bought groceries in the last 6 months knew this. The gov is several months behind....


              U.S. inflation soars in April to 13-year high, CPI shows, and reveals fresh stress on the economy

              The numbers:
              Consumer prices rose sharply again in April and drove the rate of inflation to the highest level in nearly 13 years, signaling greater stress on the economy as businesses grapple with supply shortages that are raising the cost of many goods and services.

              The consumer price index soared 0.8% to match the biggest monthly increase since 2009, the government said Wednesday. Economists polled by Dow Jones and The Wall Street Journal had forecast a milder 0.2% advance.

              The rate of inflation over the past year jumped to 4.2% from 2.6% in the prior month ? the highest level since 2008.

              more...




              Comment


              • #10
                China takes mushroom approach with agricultural data

                Grain Brokers Australia, May 18, 2021

                MYSTERY surrounds the sudden suspension of operations of one of China?s primary agricultural data providers, leaving domestic and global merchants, analysts, and brokers in the dark about all things agriculture in the Middle Kingdom.

                Cofeed is a Beijing-based private agricultural consultancy. It has established itself as one of the most influential and comprehensive providers of Chinese supply-and-demand information since its establishment in 2002. Officially known as Beijing TianxiaLiangchang Technology Co Ltd, the company ceased updating its website on April 29, leaving domestic and global market participants scrambling for alternative sources of trustworthy data.

                snip

                The perceived crackdown by Beijing on the provision of agricultural data appears to support the concept that the country?s demand for grains, oilseeds and protein meals is far greater than it is currently portraying to the global marketplace. The suppression of information also comes against the backdrop of the Phase 1 trade agreement between the United States and China, and the growing political tensions that threaten to scuttle that deal.

                snip

                Mystery surrounds the sudden suspension of operations of one of China’s primary agricultural data providers, leaving domestic and global merchants, analysts, and brokers in the dark about all things agriculture in the Middle Kingdom...Read More

                Comment


                • #11
                  US Drought Monitor
                  Map released: May 13, 2021
                  Data valid: May 11, 2021



                  --------------------------------------------------------------------

                  California Farmers Facing Drought Are Choosing Empty Fields

                  By
                  Daniela Sirtori-Cortina
                  and
                  Breanna T BradhamMay 17, 2021, 5:40 PM CDT Updated on May 18, 2021, 4:00 AM CDT

                  In some areas of California it?s so dry that farmers aren?t even bothering to plant crops this season.

                  snip

                  The announcements are concerning because California grows a third of the country?s vegetables and two-thirds of the country?s fruits and nuts.

                  snip

                  Drew Lerner, president of World Weather Inc. in Kansas, said California ?missed the rainy season? and is not going to be seeing much moisture over the next several months.

                  A La Nina weather pattern in the Pacific pushed winter storms north and away from the state, leaving it with less moisture than usual. As California gets the majority of its water from winter storms, little relief is expected before October.

                  snip

                  Comment


                  • #12
                    Source: https://finance.yahoo.com/news/globa...080152199.html

                    Global Food Prices Surge to Near Decade High, UN Says
                    Megan Durisin
                    Thu, June 3, 2021, 6:01 AM·3 min read

                    (Bloomberg) -- Global food prices extended their rally to the highest in almost a decade, heightening concerns over bulging grocery bills as economies struggle to exit the Covid-19 crisis.

                    A United Nations gauge of world food costs climbed for a 12th straight month in May, its longest stretch in a decade. The continued advance risks accelerating broader inflation, complicating central banks efforts to provide more stimulus.

                    Drought in key Brazilian growing regions is crippling crops from corn to coffee, and vegetable oil production growth has slowed in Southeast Asia. That’s boosting costs for livestock producers and risks further straining global grain stockpiles that have been depleted by soaring Chinese demand. The surge has stirred memories of 2008 and 2011, when price spikes led to food riots in more than 30 nations.

                    “We have very little room for any production shock. We have very little room for any unexpected surge in demand in any country,” Abdolreza Abbassian, senior economist at the UN’s Food and Agriculture Organization, said by phone. “Any of those things could push prices up further than they are now, and then we could start getting worried.”

                    The prolonged gains across the staple commodities are trickling through to store shelves, with countries from Kenya to Mexico reporting higher food costs. The pain could be particularly pronounced in some of the poorest import-dependent nations, which have limited purchasing power and social safety nets as they grapple with the pandemic...

                    Comment


                    • #13
                      Source: https://www.bloomberg.com/opinion/ar...ound-the-world

                      How the Rising Cost of Food Is Sweeping Around the World
                      The factors lifting prices could persist even as we returns to pre-pandemic norms. The world’s poorest will bear the highest cost.
                      By Bloomberg Opinion
                      July 13, 2021, 6:00 p.m. EDT
                      Who pays the price?

                      The cost of feeding the world is the most expensive it’s been in years. The Food and Agriculture Organization’s food price index, which tracks a basket of grains, vegetable oils, meat, dairy and sugar, rose to its highest level in a decade in May.

                      On the Chicago Mercantile Exchange, the prices of soybean oil is more than double what it was a year ago, while lean hogs and ethanol are up by about three-quarters. The same dynamic is affecting corn, palm oil, coffee, sugar and a host of other commodities. Even the price of moving food around the world is surging: The Baltic Handysize Index, which tracks freight rates on the ships used for hauling grains between continents, is at levels last seen in 2008...

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