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JohnF
Mary's Servant
USA
428 Posts |
 Posted - Apr 24 2008 : 9:52:06 PM
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Load Up the Pantry
April 21, 2008 6:47 p.m.
I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.
No, this is not a drill.
You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.
Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.
"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs."
Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.
Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.
And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.
These are trends that have been in place for some time.
And if you are hoping they will pass, here's the bad news: They may actually accelerate.
The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.
Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.
The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.
A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.
You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.
If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.
The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.
http://online.wsj.com/article/SB120881517227532621.html
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Justin
Formation
26 Posts |
Posted - Apr 25 2008 : 09:02:43 AM
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While I have food storage, just as our ancestors did with their root cellars putting away surplus for the winter and also in case next year's garden had drought or hail damage, there are things to remember:
anything with oil in it does not store well , processed white rice which has no nutritional value stores good, while the healthy long grain rice which has good oils in it will start to go rancid after months depending on temperture, freezing it will extend the time. Same with cooking oils, many go rancid after a year.
wheat and other grains need to be stored properly or don't bother putting any away, I just helped an elderly neighbor throw out 3000 pounds of wheat that had weavels after 5 years and was only good for chicken feed, I found a woman who took it to feed her chickens.
and canned food, depending on what is in it, often loses nutritional value after months; the thin plastic liner in most cans break down and let aluminum from the can into the food.
In general, if food is good for you it will not store because of the enzymes break it down, the same enzymes that help your cells function, and if it has no nutritional value, like Twinkies, it will store for decades.
I am looking at raising rabbits to reduce meat costs.
Justin, homeschooling father to Peter |
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BARBAQUED
Mary's Servant
USA
454 Posts |
Posted - Apr 25 2008 : 2:08:57 PM
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A couple of things we need to remember here.
First inflation, when I was growing up we had double digit inflation and we survived just fine.
We also had lot’s of talk about overpopulation and a diminishing food supply. We still survived.
Let’s keep our eyes on Jesus, we trust in you Lord.
Do you remember mana from heaven? It could not be stored.
Where does fear come from? Not the Lord, fear displaces trust.
Thank you Lord that in days of disaster we will not wither in days of famine, we will enjoy plenty. In the name of Jesus Christ. Psalm 37:19
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Justin
Formation
26 Posts |
Posted - Apr 27 2008 : 11:40:21 AM
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and another thing to remember is the poor of the world,
while we in the US can survive doubleing of food prices or some shortage with just discomfort, this current shortage is very real for many nations. It is similar to when DDT was banned because of bad science, in the US we did not suffer, but many people died from malaria that could have been prevented, and still are dying, politics caused that. There are increasing riots over food and some people are not surviving, part of that is due to politics and using food as a weapon, part is due to using crops for fuel instead of food. To make ethanol they use oil to make crop fertilizers, oil for diesel farm tractors, and much water to make ethanol, and diesel trucks to transport it since it can not go into pipelines like gasoline, it takes more energy to make a gallon of ethanol then the energy you can get back out of it, but some corporations are making a profit so it must be good for us.
Justin, homeschooling father to Peter |
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