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This Is Starting To Get Very Real: Agricultural Commodity Prices Have Exploded And Now The Price Of Food Is Beginning To Rise Substantially In The United States And All Over The World

Do you believe that you will always be able to run out to Wal-Mart or to the local supermarket and buy massive amounts of inexpensive food?  If so, you might want to think again.  During 2010, agricultural commodity prices have absolutely exploded.  Nearly every single important agricultural commodity has seen a double digit percentage price increase.  In fact, the S&P GSCI Agriculture Index recently surged to a fresh two year high.  Now food producers and retailers are starting to pass those commodity price increases on to consumers.  Today when I went to the supermarket I was absolutely startled by some of the price increases that I witnessed.  On some of the items that I most commonly purchase, prices were up 20 or 30 percent.  So just what in the world is going on here?  Well, it turns out that there was a lot of bad weather around the world this year, so many harvests were worse than projected.  In addition, the growing population of the world has an increasingly voracious appetite for food.  When supply gets tighter as demand continues to go up that means that prices are going to increase.   

On a recent article on our sister site entitled “Rampant Inflation In 2011? The Monetary Base Is Exploding, Commodity Prices Are Skyrocketing And The Fed Wants To Print Lots More Money” a reader named Erica left a comment describing the food prices that she is seeing in her area….

Food inflation is real, and it is here. Just yesterday I compared my receipt from a grocery run to prices I have from the same exact store from September 15, 2009. Bacon? Up 52% to $13.69 from $8.99 for 4 lbs. Butter? Up 73% to $9.99 from $5.79 for 4 lbs. Pure vanilla extract up 14% to $6.79 from $5.95. Chopped dried onions up a mere 2% but minced garlic (wet) was up 32%.

These price increases are not a coincidence.  This is happening all over the United States.

Food inflation is here and it is not going away any time soon.

In fact, food inflation is hitting consumers hard all over the globe this fall….

*According to the United Nations, international wheat prices have soared 60 to 80 percent since July.

*Since the beginning of 2010, the price of bread has gone up 17 percent and the price of meat has gone up 15 percent in European Union countries.

*The inflation rate in Russia rose to 7 percent in September primarily because of rising food costs.

*Turkey’s inflation rate accelerated to 9.2 percent in September, and authorities there are primarily blaming rising food prices for the increase.

*Food riots have already erupted in the poverty-stricken country of Mozambique and the government there is desperately trying to maintain order.

*Food prices have doubled in Afghanistan and authorities are warning that there could be an outbreak of famine unless the nation quickly receives more humanitarian aid.

So is there hope that things are going to get better in the years ahead?

No, not really.

In fact, global demand for food is only going to increase in the years to come.

Global demand for meat and poultry is forecasted to increase 25 percent by 2015.

Overall, it is being projected that global demand for food will more than double over the next 50 years.

So where in the world will all of that extra food come from?

That is a very good question.

Meanwhile, rising food prices threaten to send a new wave of inflation sweeping across the globe.

Mark O’Byrne, the executive director of GoldCore in Dublin, was recently quoted in Bloomberg as saying that the Federal Reserve “continues to be worried about low inflation, but the rising prices seen in agricultural commodities such as wheat would suggest that they may be looking in the rear-view mirror and should be more concerned about inflation, especially in the medium and long term.”

As mentioned earlier, wheat prices have soared 60 to 80 percent this year, but wheat is not the only agricultural commodity that is going up big time.

In a recent article entitled “An Inflationary Cocktail In The Making“, Richard Benson listed many of the other agricultural commodities that have spiked in price in 2010….

*Coffee: 45%

*Barley: 32%

*Oranges: 35%

*Beef: 23%

*Pork: 68%

*Salmon: 30%

*Sugar: 24%

So are American families seeing large increases in pay to keep up with all of this food inflation?

No, actually incomes are going down.

Median household income in the United States fell from $51,726 in 2008 to $50,221 in 2009.

In fact, of the 52 largest metro areas in the nation, only the city of San Antonio did not see a decline in median household income in 2009.

American families are being squeezed like never before, and the last thing that they need is for the price of food to start moving up substantially.

But it isn’t just the price of food that is going up.

Health insurance companies across the United States are announcing that health insurance premiums are going to go up substantially this year because of the new health care law.

American consumers can only be stretched so far.

Eventually something has got to give.

In fact, we are already seeing more Americans beginning to fall into poverty than ever before.  Today, one out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.

Unfortunately, there is every indication that the Federal Reserve wants to make inflation every worse.

It seems like almost every single day now a different official from the Federal Reserve makes public comments about how another round of quantitative easing is going to be necessary in order to stimulate the U.S. economy.

But if the Federal Reserve pumps even more paper money into the financial system isn’t that going to put inflationary pressure on the economy?

Of course.

It is time to wake up.

Your dollars are never going to stretch farther than they do today.

The price of food is going to continue to go up.

But perhaps you disagree.  Please feel free to leave your opinion in the comments section below….

  • http://endoftheamericandream.com Mike

    It is frightening to look back at the last 10 to 11 years and notice how much has gone downhill. Back in 1999-2000 we had (in the USA) low unemployment, low prices, excellent job growth, and excitement for the future, mainly because of the dot-com boom.

    It is even more frightening to think of how much things will get worse between 2011 and 2021. I know that is a bit far away, but way before then, we will be in a very deep depression. It will not be avoided.

  • Gary

    If all we are going to have are crap low pay service jobs then we will need to tax the rich so the food stamp program can be expanded. If jobs /pay kept up with productivity increases this would not be an issue. People would make enough to live a middle class lifestyle. Instead all the money has gone and is going to the rich. Look at the rich who are trying to buy a senate seat or governorship and the pathetic tea bagger dolts who support them.

  • mondobeyondo

    Where will all this extra food come from?

    Who knows. Hydroponics perhaps..?? Isn’t that how they grow strawberries?
    Although admittedly, it would be quite a challenge to grow wheat or corn by this method. If there’s a wheat shortage, you won’t even be able to enjoy strawberry shortcake (you need wheat to make the flour).
    Anyone know any good locust recipes? Locusts are quite plentiful (especially in Australia) and are always in season…ha!

  • filboyd

    In the first two comments only one mentions food, and that’s food stamps. Oddly enough, the few times I’ve seen shoppers use food stamps, they usually bear more weight (obese) than anyone in eyeshot. Maybe food price inflation is new kind of forced diet? But that’s another topic altogether.

    Like the author, I have also seen food and other commodity prices go higher. Weekly grocery shoppers notice these things. Here in the Heartland, some prices fluctuate wildly. Sometimes a dozen eggs is about eight cents per egg. Other times it’s 12 cents per egg. This seesaw is currently back on the upswing. (Your region may vary.)

    Toilet paper has seen a steady rise: about 30% over two years. However, in that same timeframe the grocery’s salad bar price-per-pound hasn’t changed. Go figure. This article may be about food prices, but it equally applies to other consumer products.

    And don’t get me started on the Federal Reserve! Google “creature from jekyll island” and you’ll see why the Fed is unnecessary and downright harmful. At the rate they create dollars, dollars should be edible.

  • Not so Mad Max

    Another reason for rising prices is the buying of commodities options. The big money boys are terrified of the dollar death dive, the Euro is in the crapper, equities have not preformed. Options are one of few places to park money, good for big money boys bad for the rest of us stock, food, ammo, gold, and silver.

  • George Tasker

    I can’t quite figure why Mike thinks that the answer to our problems is to tax the rich.

    I think a far better tax would be a transaction tax. It was suggested by a politician in my country that a 2% transaction tax would remove the need for any other taxes.

    It would also hit the wealthy harder assuming that is what Mike wants as I would imagine that the rich would be more inclined to move their money around a lot more so 2% each time they move their money would discourage activities such as financial speculation.

  • El Pollo de Oro

    One of the bogus talking points we often hear from globalist NWO neocon bastards is that life in The Banana Republic of America (BRA) is so wonderful that even the poor people are fat. Actually, poor people are fat in the BRA because they eat what they can afford, which is a lot of processed garbage. I live in Philadelphia, and you can gauge how well off an area is by the size of the people. In the more upscale parts of the city (Rittenhouse Square, Olde City), you don’t see nearly as much obesity as you see in poor neighborhoods in North Philly or West Philly (where people tend to eat more processed junk because even though it’s unhealthy, it beats starving). So the fact that there are so many obese people in the BRA is not a reflection of how well off the country is–it is a reflection of how terrible life has become for a big chunk of the American population.

    Here’s something ironic: life expectancy in Spain is 80 (higher than the BRA) despite the fact that so many Spaniards smoke like crazy. That’s a reflection of their health care system and their diets. Spaniards don’t eat as much garbage as Americans. But again, poor Americans eat what they can afford–so I’m certainly not blaming the victim. And as this economic horror story becomes even worse and as fruits and vegetables and lean protein become increasingly expensive, millions of Americans will become fatter and unhealthier because they won’t be able to afford decent food. They will eat whatever garbage they can fit into their tiny budgets. Combine unhealthy diets with a broken health care system, and you have a nasty combination.

    Get ready for life expectancy to plummet in this Third World hellhole called The Banana Republic of America.

  • El Pollo de Oro

    I should add that the Spanish life expectancy of 80 won’t last if the neocon globalist devils get their way. Spain’s unemployment rate is a whopping 22%, and Europe is under siege economically. The bastards who have turned the former USA into a Third World basketcase would love to do the same thing to Europe. But having spent a lot of time in Europe, I can tell you that the Europeans won’t go down without a fight. The riots and mass demonstrations we’ve seen in parts of Europe are only the tip of the iceberg. The French, God bless ‘em, just might have to polish off their guillotines when push comes to shove. C’est un guillotine tres belle, n’est-ce pas?

  • Steve

    @ Gary:

    Such a pathetically narrow view of your world. Please, put your head back in the sand and go back to Huffington Post where people of your ilk spread their hatred.

  • http://www.prepared.pro JC Refuge

    The food supply issue–price inflation, shortages, etc.–has been an inevitable outcome anticipated by many, many folks for years now. Yes–the reality of what is around the bend is starting to awaken more and more folks.

    Your closing comments are as truthful and to the point as they can be: “It is time to wake up.

    “Your dollars are never going to stretch farther than they do today.

    “The price of food is going to continue to go up.”

    I sell long-term storage food. Have been doing this now for almost 10 years. It’s been a growth industry since I’ve been in it. Today though, there are no boundaries for those coming into it cold. That is, they are coming in and making huge purchases. People who have money and know they need to do something right now. It’s real. Today it is happening. Demand is trending strongly upward. And available supplies are more and more hit and miss.

    And yes, many of our suppliers’ prices are moving up–and not just a little bit.

    More than ever, the fact remains–when you buy quality long-term storage food, you acquire some relative measure of peace of mind because it is essentially “investment-grade” food. Whatever price you buy it at today, it will appreciate in value going forward. And the greatest thing–as long as you keep that food secure and stored in a controlled climate, it is not going to lose value. It always maintains the most intrinsic kind of value out there–it is what everyone needs to survive. It is what you and I must eat to thrive. Everything else could conceivably lose it’s value. But food? If it’s edible and nutritious, it is worth whatever you paid for it, and probably more over time.

  • 2 CENTS

    Who ever can , even if it is just a small garden,
    Try to aquier any kind of seeds,
    beens wheat oats winterrye ect.
    If you do not grow it, you have to buy it!
    Where I am we are headed for winter, If you are in a warmmer climate I envy you, but wish you the best,
    don’t wait plant something in the ground asap every little bit helps.

  • TessaC

    We need to set up TARIFFS. Out of country goods are being forced on us through several bad policies (GATT/NAFTA). Food is plentiful in our country and we could certainly help the world more, but not if our farmers are forced to sell at the international markets first. Our small local farms are being extinguished with new FDA-USDA laws…tagging everything with RFID tracking. Its the corporate farms which are the problem, not the local community farms who cant afford the scary federal programs which are knocking them out of business. Congress is even trying to make our family gardens illegal, claiming authorities will need to inspect all gardens for pot growing and NO LOCAL gardens will be allowed to sell their wares along the roadsides. This feels more like an attack on our abilty to be resourceful and independent. Isnt it interesting that Obama’s head advisor for the FDA is a Monsanto CEO? Monsanto’s GMO crops are an outright attack on our biodiversity. Old reliable seed sources being sullied by monsanto pollens, bees dying of Monsanto pollens. The corporate/military’s weather modification programs are contaminating the soil(all over the world, actually) spraying Alluminum oxide, Barium Oxide, Manganese, polymers and who knows what else. What we have here is a Congress who is OWNED by the old colonialists, robber baron families and international bankers.

    Rebuild America! Tax goods coming into the country!

  • CJ Hames

    I can honestly say that we have seen food prices DECLINE the last few months in the North Dallas area. We’re paying .99 for a gallon of milk.

    Look, I do think food prices will rise dramatically in the coming years. I do think we will see massive food shortages. But the facts are that these price increase percentages are based off of much, much depressed price levels from 2008 and 2009 when the bottom fell out of food prices because of lack of demand. OF COURSE they have gone up since then.

  • http://eatfreeshopfree.com/never-pay-for-groceries-again Mark Fitzpatrick

    Not only have I been trying to tell people that food will be the new global currency for the last few months, but there is a way to counter the on coming inflation. If you are looking for a viable way to help yourself and others eliminate food costs and get ahead of the trend please contact me I will be glad to help.

  • Robert

    Welfare is theft.

  • http://poundsandupyourass.net mick

    Fine a spot to buld a fire pit or barbeque, then start sizing up your neighbors animals. (dogs, cats, etc.)

    I think this is a plot by Animal Control, and Animal Shelters, to reduce the stray animal population?

    Leave enough space for expansion of your fire pit or barbeque, then start sizing up your neighbors?

    Perhaps you should fatten them up first with some government cheese or somthing?

    Say “CHEESE”.

  • http://www.survivalfoodkit.com John

    Great article! People need to wake up and smell the coffee! We are headed for some troubled times! I found a company that deals in survival food that everyone needs to check out. The food is great tasting and has a shelf life of 15 years. They are running a promotion right now where they will ship you a free box of their food. All you have to do is watch a video then register. If you want to check it out, go to this website: survival food kit .com

  • http://www.evansrabbitranch.webs.com Kathy

    So sad, especially the hate about people on welfare. My family is on welfare. I may be heavier than I should be but I have 3 children to thank for that, not my appetite for high calorie crap. I garden, I can, I dry foods, I am learning to sew our own clothes. These are what the people need to do, relearn old skills that died out with the invention of convenience. We cook from scratch and freeze leftovers for later meals. We are not really allowed to roll over food stamps to the next month and they do not decrease them just because you are good with your money. Even if you ask. We tried. Oh and people who live where they can have chickens or rabbits or goats should get some. We raise meat rabbits and butcher them for our freezer. We only have to buy the occasional turkey and Tilapia fish fillets to have variety. A good garden and a good composting system will cut your food costs and trash out put exponentially. People need to learn to do for themselves instead of whining about what the government is going to do for them. IF you are not allowed to do anything I have mentioned begin petitioning for it to change. It is up to US, the PEOPLE to make things happen. We have sat on our hands for far to long.

  • Zack

    The Fed is out of control, and it’s policies are destroying the poor and middle class. It’s sickening to realize that Bernanke will print as much money as it takes to bail out his buddies while we all watch our grocery and gas prices rise.

    We help Americans find jobs and prosperity in Asia. Visit http://www.pathtoasia.com for details.

  • R. A. Davis

    40 million people are on food stamps. I’m one of them, and I’ve never,ever been called fat. The US Darpa project called HAAARP can create weather anywhere on the planet. Population reduction through mass starvation.

  • Tony

    Atlas continues to shrug. These are the birth pangs of a New Weird Order.

  • Draco

    Kathy if you are heavier than you should be then it’s because you’re a FAT GLUTTON and typical greedy, lazy, over fed American.

  • marco

    Draco,
    Wonderfully thoughtful comment! I’m sure you love the anonymity of this type of format, no?! Perhaps you have never heard the axiom “You cannot build yourself up by tearing others down”? We need more well-mannered Europeans like yourself!
    But I digress. If you have ever been to a part of the world with nutritionally impoverished folks (not necessarily “food” impoverished) you will still see obesity (e.g., Lesotho, as an example). These people are not the “typical greedy, lazy, over fed American” of which you speak. Instead, they are typically eating high-starch diets (i.e., a good deal of maize, potatoes, rice or somesuch high starch food.) It may not be the best food but it is something to eat, even though obesity may be part of it. These folks are in a type of “food desert” as they say, although not as obvious as in a large inner-city area. Again thanks for your constructive and well-reasoned opinions, Draco. Your mother she is smiling about you, no?
    World hunger and nutrition have always been an issue, especially since WWII. It is only now that we are seeing it become more of an issue as it, combined with economic problems in the USA that have pulled many people into a more impoverished situation than before. I think the lost are of gardening, “heirloom” seed saving and food preservation, along with “seasonal” and “local” eating would be very beneficial no only for the environmental health, but for also the health of the people.

  • http://oneangrytaxpayer.org Ken

    http://beprepared.com/ http://store.honeyvillegrain.com/

    Above is a couple of good sources of bulk food. I don’t work for any of them. I do buy from them

  • Doooooglass

    Hydroponics ??? LOL
    Your water KILLS plants !

  • Thomas

    A man called David Hackett Fisher wrote a book called –
    The Great Wave: price revolutions and the pattern of history. It is a truly incredible book and uses the history of prices to give insight into long-term historic cycles. I recommend this book unreservedly to anyone who wishes to gain a longer-term perspective on where we are.

  • Larry

    Back in the day when food was held in high regard, and people conserved, preserved and treated food with respect, this would be seen as a real issue. But when I see fat, obese, over fed Americans who consume cheap unhealthy processed food, this is simply a wake-up call to plow under that useless backyard, and grow your own food.. The so called “Crisis” is really not. What is “starting to get real” is you are being forced to become more self sufficient.. is that really such a bad thing? Stop relying on others to sustain your pathetic lives.

  • rabbit

    I agree that the world is going to have massive food shortages and we should be taking actions to protect ourselves and our families. The phrase “freeze dried” comes to mind.

    My question is why the author of the article would automatically take the health insurance companies’ word for it that their prices are going up because of the new health care legislation. What was their excuse for raising prices every year for the last 10 years? How convenient for them to just blame it on the new legislation for the next 10 years.

  • http://www.countryconsultant.com/blogspot/ Dene

    I’ve been watching the food bill rise for some time now. It seems like the stores play a little juggling game to make the overall price seem stable, but after awhile, there’s nowhere to hide costs. It looks like my food storage may actually be my best investment for ROI.

  • Kevin

    Draco, I agree that refined foods contribute to low income obesity,but your premise that this is all they can afford is wrong. Cooking with staples is less expensive and more nutricious than McDonalds,but it does require alot more effort. I”ve eaten a lot of meals of rice and beans in third world countries that were delicious, nutricious, and costs pennies per meal.

  • Lisa

    I have seen a significant jump in the price of food. I make my food at home from scratch and we don not go out to eat. We already raise chickens and next we will raise rabbits for meat. We are hunting for deer and turkeys. This seems to be a trend among many who are becoming survivalist.

  • Donald

    just 3 days ago i bought 3 cantaloupe for 1.00, avocados for .69 ea, nectarines for .69 a pound and many vegetables in the same price range.

    granted, i’m in az, so you cannot find all the fruits around the country, but all but the exotic produce is quite reasonable and the most nourishing foods you can buy in a supermarket.

    go ahead, load up on that bacon, sugar, fat and glutton filled genetically modified wheat. all dead foods.