Get ready for food prices too increase soon by 20% ++

[Dogman]

Crop Yield Raises Risk to Food Cost

By WILLIAM NEUMAN (http://topics.nytimes.com/top/reference/timestopics/people/n/william_neuman/index.html?inline=nyt-per)

Published: August 11, 2011

Consumers can expect to see a jump in prices for pasta, meat, vegetable oil and many other grocery items in the coming months as a pair of new government reports forecast on Thursday that a brutal mixture of heat, drought or flooding has taken a toll on the corn, soybeans and wheat grown on American farms.

http://graphics8.nytimes.com/images/2011/08/12/business/Crops/Crops-articleInline.jpg

Jay Janner/Austin American-Statesman

A corn field hit hard by drought and heat in Garfield, Tex. The number of acres of corn harvested this fall is expected to drop.

Futures prices for those important crops jumped on Thursday, and commodities experts said that would lead to higher prices for manufacturers and consumers.
“The message, based on today’s report, is these higher costs should not be expected to abate any time soon,” said Bill G. Lapp, president of Advanced Economic Solutions, a commodity consulting firm that works with restaurant companies and food manufacturers. “It implies higher cost forthcoming and subsequent margin pressure, and at some point the need to increase prices at the retail level or on the menus.”

The Agriculture Department’s production (http://usda.mannlib.cornell.edu/usda/current/CropProd/CropProd-08-11-2011.pdf) and supply and demand (http://usda.mannlib.cornell.edu/usda/current/wasde/wasde-08-11-2011.pdf) reports, including information from a survey of farmers and visits to fields, predicted a national average corn yield of 153 bushels an acre, down from nearly 159 bushels in the government’s previous forecast. The department also predicted a small drop in the number of acres of corn that would be harvested this fall.

Hot temperatures and below average rainfall will lower yields, the report said. The dry, hot weather increases stress on the corn plant and keeps it from channeling an optimal amount of energy into the formation of kernels, according to Joel C. Widenor, a meteorologist with the Commodity Weather Group, an agricultural consulting firm.

Mr. Widenor said July was the hottest in the Corn Belt states since 1955. It was the fourth-hottest July in the prime corn-growing region in the last 117 years, he said.
The irony in the new forecast was that it still called for a total corn harvest near record levels. Farmers responded to high price expectations this spring by greatly increasing corn acreage, but an extremely large crop was needed to make up for depleted stockpiles which have been reduced by high demand for corn for animal feed and ethanol production. The coming crop will not be big enough to do that, so corn prices will stay high, pushing up prices for other grains, like wheat, as well.
The Agriculture Department’s reports also lowered the forecast for soybean yield and the total soybean harvest.

“The extreme blowtorch of heat this summer took our yield down,” said Don Roose, president of U.S. Commodities, an Iowa commodities broker and consulting firm. “The wet weather we had early took our harvested acres down. Between the two of them we’re in a situation where now we have to ration supplies.”

December corn futures on the Chicago Board of Trade opened by jumping 30 cents, the maximum daily increase allowed, to $7.18 a bushel. Trading ended the day at $7.14. Soybean futures for the November contract opened at $13.53 a bushel, an increase of $0.52. The contract closed at $13.32. Wheat prices also rose, with the September futures contract on the Kansas City Board of Trade closing at $8.08 a bushel, a gain of $0.23.

“The markets over the past couple of weeks have been trying to figure out which is dropping faster, supply or demand,” said Chad E. Hart, an assistant professor of economics at Iowa State University. He said the U.S.D.A. reports, including the World Agricultural Supply and Demand Estimates known as Wasde, provided an answer: “What the Wasde report said is, supply.”

High commodity prices will translate into higher meat prices because the cost of feeding cattle, pigs and poultry with grain will go up, forcing producers to raise fewer animals.

And pasta prices will be pushed up because the crop of durum wheat, the variety used to make pasta, is forecast to be almost half as big as last year’s, because of flooding in North Dakota.

The average retail pasta price is currently $1.53 a pound, according to the National Pasta Association, a trade group, and Walter N. George, president of the American Italian Pasta Company, said that may eventually increase by 10 to 20 cents.

“The shopper may see slightly higher prices at retail, and over the course of the next 18 months should see those prices begin to come to more normal levels given a replenishment of the durum stocks,” he said.

http://www.nytimes.com/2011/08/12/business/corn-and-soybean-prices-rise-after-usda-report.html

[Serpo]

Eat 20% less............................just a thought

[Dogman]

Eat 20% less............................just a thought Good thought. With the drought killing crops and not only in the us. Meat and most all foods will skyrocket. And If the drought does not break it will get worse.

[Grog]

Drought is tough! So dry here. No rain to speak of. I'm more concerned about a fire than food prices at this point. One dumbass tossing a smoke out the window can cause an entire town to disappear. Fire about a mile from my house today. Good thing there were no winds. 20% increase in food prices, I can live with but loss of everything from fire would suck. We need some rain desperately, this place is a tinderbox!

[Dogman]

Drought is tough! So dry here. No rain to speak of. I'm more concerned about a fire than food prices at this point. One dumbass tossing a smoke out the window can cause an entire town to disappear. Fire about a mile from my house today. Good thing there were no winds. 20% increase in food prices, I can live with but loss of everything from fire would suck. We need some rain desperately, this place is a tinderbox! Same here in e-tx it is spooky dry.

[ximmy]

This has already been happening...

“Whole wheat pasta had gone from 16 ounces to 13.25 ounces,” she said. “I bought three boxes and it wasn’t enough — that was a little embarrassing. I bought the same amount I always buy, I just didn’t realize it, because who reads the sizes all the time?”
Ms. Stauber, 33, said she began inspecting her other purchases, aisle by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16; boxes of baby wipes went to 72 from 80; and sugar was stacked in 4-pound, not 5-pound, bags, she said.
Five or so years ago, Ms. Stauber bought 16-ounce cans of corn. Then they were 15.5 ounces, then 14.5 ounces, and the size is still dropping. “The first time I’ve ever seen an 11-ounce can of corn at the store was about three weeks ago, and I was just floored,” she said. “It’s sneaky, because they figure people won’t know.” ...
http://farm3.static.flickr.com/2602/4161167714_94424bd9e1.jpg

Most companies reduce products quietly, hoping consumers are not reading labels too closely.
But the downsizing keeps occurring. A can of Chicken of the Sea albacore tuna is now packed at 5 ounces, instead of the 6-ounce version still on some shelves, and in some cases, the 5-ounce can costs more than the larger one. Bags of Doritos, Tostitos and Fritos now hold 20 percent fewer chips than in 2009, though a spokesman said those extra chips were just a “limited time” offer.
Trying to keep customers from feeling cheated, some companies are introducing new containers that, they say, have terrific advantages — and just happen to contain less product....
http://farm3.static.flickr.com/2742/4185945958_153ac80a74.jpg

But even while companies blame the recession for smaller packages, they rarely increase sizes in good times, he said.
He traced the shrinking package trends to the late 1980s, when companies like Chock full o’ Nuts downsized the one-pound tin of ground coffee to 13 ounces. That shocked consumers, for whom a pound of coffee had been as standard a purchase unit as a dozen eggs or a six-pack of beer, he said.
Once the economy rebounds, he said, a new “jumbo” size product typically emerges, at an even higher cost per ounce. Then the gradual shrinking process of all package sizes begins anew, he said.
“It’s a continuous cycle, where at some point the smallest package offered becomes so small that perhaps they’re phased out and replaced by the medium-size package, which has been shrunk down,” he said.
http://data.whicdn.com/images/8675666/tumblr_lj4wrxg2uN1qe49wpo1_500_thumb.jpg?130242176 1


http://www.nytimes.com/2011/03/29/business/29shrink.html?pagewanted=all

[Serpo]

If this continues we will need a ..................719

[chad]

i was listening to ag news on the radio today. they were reporting bumper crops of corn + soybeans in iowa, wisconsin, and minnesota.

[PatColo]

corn looks on its way to new highs,

daily (Dec)


http://tfccharts.com/charts/CNC1.GIF

http://futures.tradingcharts.com/charts/CNW.GIF
A way to play corn spot price without futures, is
CORN (http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=corn&insttype=&freq=1&show=&time=8)
Teucrium Corn Fund (ETF) (http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=corn&insttype=&freq=1&show=&time=8)

http://bigcharts.marketwatch.com/charts/big.chart?nosettings=1&symb=corn&uf=0&type=2&size=2&sid=5006857&style=320&freq=1&time=8&rand=1292814591&compidx=&ma=0&maval=9&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1


http://futures.tradingcharts.com/charts/CNW.GIF

[LastResort]

This has already been happening...

“Whole wheat pasta had gone from 16 ounces to 13.25 ounces,” she said. “I bought three boxes and it wasn’t enough — that was a little embarrassing. I bought the same amount I always buy, I just didn’t realize it, because who reads the sizes all the time?”
Ms. Stauber, 33, said she began inspecting her other purchases, aisle by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16; boxes of baby wipes went to 72 from 80; and sugar was stacked in 4-pound, not 5-pound, bags, she said.
Five or so years ago, Ms. Stauber bought 16-ounce cans of corn. Then they were 15.5 ounces, then 14.5 ounces, and the size is still dropping. “The first time I’ve ever seen an 11-ounce can of corn at the store was about three weeks ago, and I was just floored,” she said. “It’s sneaky, because they figure people won’t know.” ...
http://farm3.static.flickr.com/2602/4161167714_94424bd9e1.jpg

Most companies reduce products quietly, hoping consumers are not reading labels too closely.
But the downsizing keeps occurring. A can of Chicken of the Sea albacore tuna is now packed at 5 ounces, instead of the 6-ounce version still on some shelves, and in some cases, the 5-ounce can costs more than the larger one. Bags of Doritos, Tostitos and Fritos now hold 20 percent fewer chips than in 2009, though a spokesman said those extra chips were just a “limited time” offer.
Trying to keep customers from feeling cheated, some companies are introducing new containers that, they say, have terrific advantages — and just happen to contain less product....
http://farm3.static.flickr.com/2742/4185945958_153ac80a74.jpg

But even while companies blame the recession for smaller packages, they rarely increase sizes in good times, he said.
He traced the shrinking package trends to the late 1980s, when companies like Chock full o’ Nuts downsized the one-pound tin of ground coffee to 13 ounces. That shocked consumers, for whom a pound of coffee had been as standard a purchase unit as a dozen eggs or a six-pack of beer, he said.
Once the economy rebounds, he said, a new “jumbo” size product typically emerges, at an even higher cost per ounce. Then the gradual shrinking process of all package sizes begins anew, he said.
“It’s a continuous cycle, where at some point the smallest package offered becomes so small that perhaps they’re phased out and replaced by the medium-size package, which has been shrunk down,” he said.
http://data.whicdn.com/images/8675666/tumblr_lj4wrxg2uN1qe49wpo1_500_thumb.jpg?130242176 1


http://www.nytimes.com/2011/03/29/business/29shrink.html?pagewanted=all

I picked up a loaf of bread that I haven't bought in about a year, and I was like WTF happened lol. It shrunk to 2/3s the size. Store was out of my organic bread.

[JJ.G0ldD0t]

i was listening to ag news on the radio today. they were reporting bumper crops of corn + soybeans in iowa, wisconsin, and minnesota.

Quite a bit of corn is grown down here west of Houston... This year- the stalks came up 2-3' and withered. NOBODY made any corn. Most of it was tilled under early and they planted cotton instead.

[chad]

unrelated to corn, but i went to the store last night.

1.75 ounce box of pectin was $2.55.

32 ounce bag of peas was $3.79.

$6.99 for a 12 pack of TP.

$2.99 for a 16 ounce bag of bean soup mix.

prices are getting insane. 1 bag of normal stuff stuff now costs between $30-40.

[Twisted Titan]

Thank goodness our paychecks are going up 20-30% per anum to etfectively compensate for these drastic changes

[mick silver]

and just one more reason to have two years of food stored at home . it like having silver in your hands . i own this to a few at the old gim thanks

[Ponce]

After my Dr appointment at the VA I stopped at Wally's..........and............Jesus H Ponce........those freaking prices, what just to cost $2.00 is now $3.26 (Twinkies) and most of the packages are smaller and lighter.........but, surprise, surprice, the tp rolls were cheaper than ever.......or at least for a long time.

How in the hell are many of you can afford to feed a family of 4 is a mystery to me, you guys must have a hell of a good wife who knows how to make something with nothing.......congrat.

Most of my spaghetti is from the $ store from when it used to be 2 lbs, now the packages are less than a lbs.

[Dogman]

After my Dr appointment at the VA I stopped at Wally's..........and............Jesus H Ponce........those freaking prices, what just to cost $2.00 is now $3.26 (Twinkies) and most of the packages are smaller and lighter.........but, surprise, surprice, the tp rolls were cheaper than ever.......or at least for a long time.

How in the hell are many of you can afford to feed a family of 4 is a mystery to me, you guys must have a hell of a good wife who knows how to make something with nothing.......congrat.

Most of my spaghetti is from the $ store from when it used to be 2 lbs, now the packages are less than a lbs.

Ponce check out the size of the new tp rolls against your old ones, bet they will be less in size, square size and count ,they will be more fluffy or loose so they look bigger.

[synbi]

For what's it worth, things up in Europe are no less easy right now. Least in my country. Farmers have had a rough year with irregular weather causing some trouble, so crop yield SHOULD be little less than usual this year, it's almost a sure fact.

All the sucker banker bailouts for Greece, Spain etc. mandated by EU have cost our governments - no, us the sucker taxpayers helluva lot - and now they're cutting off farmer subsidies to make up for the loss in budget... and raising taxes on gas, tobaccos, alcohol; even candy they're raising taxes on (higher taxes on food are DEATH to local producers). Farmers quitting the business every day, every month, our numbers are thinning... and how long until ours is a third world country, having nothing of our and needing to import most of our food from overseas, elsewhere...?

Food prices going up here as well, as stores are trying to make increasing profits. One of our largest countrywide meat producers recently announced they're not willing to rise the price they pay the farmers for their cow meat now (might even lower it), even though producers have need for it URGENTLY... "So inflation is at 5% or more, and you're not getting a payrise to make up for it from us this year, poor farmers, dirt of the earth... suck it..." how does this all encourage us to keep growing food for all those ungrateful asses?

[Ponce]

You are probably right doggy.....I just walked by the tp and saw the price but not the size.

[PatColo]

Drought-Baked Fields in U.S. Dimming 2012 Wheat Outlook as Prices Rebound (http://www.bloomberg.com/news/2011-08-24/drought-baked-fields-curb-2012-u-s-wheat-outlook-as-prices-gain.html)

By Whitney McFerron - Aug 24, 2011 1:04 PM PT

Enlarge image http://www.bloomberg.com/apps/data?pid=avimage&iid=iYbk5Xg15GTc (http://www.bloomberg.com/photo/drought-baked-fields-curb-2012-u-s-wheat-outlook-as-prices-/96721.html)
A drought-stricken wheat field bakes in the sun July 27, 2011 near Hermleigh, Texas. Photographer: Scott Olson/Getty Images



A yearlong drought from Kansas (http://topics.bloomberg.com/kansas/) to Texas has created the driest conditions on record for farmers preparing to plant winter wheat, dimming crop prospects for a second straight year in the U.S., the world’s largest exporter.

http://www.bloomberg.com/news/2011-08-24/drought-baked-fields-curb-2012-u-s-wheat-outlook-as-prices-gain.html


dec wheat (http://www.crbtrader.com/data.asp?page=chart&sym=ZWZ11&width=600&tblwidth=600)

http://shared.websol.barchart.com/chartcache/fe656337539c8d8fb64dfede8e40d6aa.png

[Sparky]

I'm surprised pasta remains cheap. Brand-name still only $1.25 for a one-pound box. It has a long shelf-life, so it's a good prep item.

[Dogman]

Costco coffee up a buck a can from last month, that makes $6 increase since I started keeping track of it last Dec

Blurb on the news today, that coffee prices are set too drop. Good harvests and supply's.

[Dogman]

Yeah just like gas here has dropped a whopping $.02 in the last month, prices always go up like a rocket and then fall like dandelion seed
Sure that is the time honored capitalist way.

[keehah]

Another 20% rise?
The food I buy just finished going up 20% the first half of the year!

[Hatha Sunahara]

This is the way I imagined what a financial crisis would look like. The economists will tell you in a hyperinflation the shelves will go bare at the supermarkets, so you should buy some extra and hoard it. And that may be a good idea--but not because food will be unavailable--but because it will be unaffordable. There will be plenty of food on the shelves, but few people will have enough money to buy it because it will be expensive. I suppose this is what will happen when we have $5000/oz gold. A loaf of bread will cost $100. A gallon of gasoline $25. Milk will be $25 a gallon. And peoples income will drop from current levels. It will be hard to feed a family. Not because of a shortage of food, but because of 'stagflation'--which is exactly what we have. When enough people can't feed their families, we'll see anti-government sentiment increasing. I think we refer to that as SHTF here. That would be a good time to get out of Dodge.

This is why I do not consider holding gold or silver to be an investment. At worst it is an insurance policy, and at best it is a lifeboat on a sinking ship. You might be able to feed yourself if you own some PM coins.


Hatha

[po boy]

This is the way I imagined what a financial crisis would look like. The economists will tell you in a hyperinflation the shelves will go bare at the supermarkets, so you should buy some extra and hoard it. And that may be a good idea--but not because food will be unavailable--but because it will be unaffordable. There will be plenty of food on the shelves, but few people will have enough money to buy it because it will be expensive. I suppose this is what will happen when we have $5000/oz gold. A loaf of bread will cost $100. A gallon of gasoline $25. Milk will be $25 a gallon. And peoples income will drop from current levels. It will be hard to feed a family. Not because of a shortage of food, but because of 'stagflation'--which is exactly what we have. When enough people can't feed their families, we'll see anti-government sentiment increasing. I think we refer to that as SHTF here. That would be a good time to get out of Dodge.

This is why I do not consider holding gold or silver to be an investment. At worst it is an insurance policy, and at best it is a lifeboat on a sinking ship. You might be able to feed yourself if you own some PM coins.


Hatha

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Thomas Jefferson, (Attributed)
3rd president of US (1743 - 1826)

[PatColo]

Quite a bit of corn is grown down here west of Houston... This year- the stalks came up 2-3' and withered. NOBODY made any corn. Most of it was tilled under early and they planted cotton instead.

la times:

Bad weather raises concern over future food prices (http://latimesblogs.latimes.com/money_co/2011/08/corn-futures-weather-food-prices.html)

http://latimesblogs.latimes.com/.a/6a00d8341c630a53ef015390e9d5b4970b-800wi (http://latimesblogs.latimes.com/.a/6a00d8341c630a53ef015390e9d5b4970b-pi)
Photo: A corn crop failed to mature in a Texas field this July. A severe drought has caused most non-irrigated crops in the area to fail and forced farmers to abandon some fields to conserve their limited resources. Credit: Scott Olson / Getty Images

Corn futures rose Monday amid speculation that the recent rains in the Midwest won't be enough to ease drought conditions and boost farmers' yields.

Indeed, it has been a brutal year weather-wise for much of the country, particularly for the Midwest and Texas. In the spring there were floods, which made it difficult for farmers to get their crops planted in the ground.

This summer, heat waves have damaged crop fields, and intense droughts in Texas and Oklahoma have resulted in cattle dying and ranchers rushing to sell their animals, even if they took a loss. The extreme weather has raised concerns that a smaller-than-expected supply of corn, soybeans and other core commodity crops might ripple out and keep consumer food prices high in the coming months.

Last month, the U.S. Department of Agriculture cut its forecast for this year’s harvest and predicted that grain inventories, though still hitting record highs, would come in lower than previously expected. Among its estimates: Corn was forecast to hit 12.9 billion bushels, down from previous forecasts of 13.5 billion bushels.

Corn futures in Chicago (http://www.cmegroup.com/trading/agricultural/grain-and-oilseed/corn_quotes_settlements_futures.html) rose 9 cents on Monday, closing at $7.20 a bushel for a September delivery. The price has jumped 21% from $5.96 a bushel on July 1, and is nearing the three-year high of $7.85 reached on June 9.
ALSO:

USDA cuts crops forecast for soybean, wheat, corn (http://latimesblogs.latimes.com/money_co/2011/08/usda-cuts-crops-forecast-for-soybean-wheat-corn.html)
Lawsuits begin in connection with salmonella-tainted turkey (http://latimesblogs.latimes.com/money_co/2011/08/salmonella-turkey-recall-lawsuit-oregon-.html)
Tomato scion Frederick Scott Salyer beefs up his legal team (http://latimesblogs.latimes.com/money_co/2011/08/scott-salyer-tomato-corruption-scandal-new-attorney.html)

-- P.J. Huffstutter