Soaring food prices could leave UK consumers forking out almost £6.50 for a loaf of bread and more than £18 for a pint of beer by 2030 unless urgent action is taken to avert dangerous climate change, environmentalists have claimed.
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The report by Ray Hammond, who studies how future trends will affect society and business and is a visiting lecturer at Oxford University’s Institute for the Future of Humanity, warned food prices could rise well above inflation by 2030.

His research, based on previous price hikes recorded by the World Bank and projections by the International Food Policy Research Institute, suggested an 800g loaf of white bread which currently costs 72p would rise to £6.48 – as opposed to the £1.44 it would cost under normal inflation.

A litre of corn oil would rise from £1.99 to £17.91, a kilogram of basmati rice would increase from £1.69 in today’s prices to £15.21 by 2030, and 500g of cornflakes would shoot up from 78p to £7.20. Even beer would increase, with a pint of Pilsner lager rising from £2.05 to £18.45.

Source/Full Story: guardian.co.uk

Toss in a little UG99 and you got yourself a real crisis…famine to add to the pestilence.

If there is a single weather pattern that strikes fear into agricultural and soft commodities markets, it is El Niño.The recurring climatic event – caused by an increase of the water temperature in the tropical Pacific – has in the past triggered wild gyrations of wholesale food prices, as it usually brings droughts to south-east Asia and Australia.

Traders and agricultural officials are nervously watching weather models for the possible development of an El Niño later this year – on the cards after August – after several countries, including Australia and the US, issued early weather warnings.

“With weather forecasts flagging that there is a larger than 50 per cent risk of an El Niño, this is going to get lots of market attention,” says Luke Chandler, director of agriculture commodity markets research at Rabobank in London.

Agriculture and soft commodities traders say the weather phenomenon has been on their radar, although most in the market agree that it is too early to say whether one will develop this year and what impact, if any, it will have on prices.

Daniel Guertin, a meteorologist at Barclays Capital’s commodities desk in New York, says the traders’ attention is warranted, taking into account the early signs.

“The waters in the tropical Pacific Ocean have warmed up substantially, and this is indicative of a developing El Niño later this summer or in the fall,” he says.

“Market chatter about a developing El Niño is justified.”

Source/Full Story: FT.com

An interesting bit of thinking…

Key Concepts

* Food scarcity and the resulting higher food prices are pushing poor countries into chaos.

* Such “failed states” can export disease, terrorism, illicit drugs, weapons and refugees.

* Water shortages, soil losses and rising temperatures from global warming are placing severe limits on food production.

* Without massive and rapid intervention to address these three environmental factors, the author argues, a series of government collapses could threaten the world order.

Source/Full Story:: Scientific American

Faced with plunging orders, merchants across this recession-wracked country are starting to do something that many of them have never done: cut retail prices.

Prices dipped everywhere, from restaurants and fashion retailers to pharmacies and supermarkets in March. Hoping to increase sales, Fernando Maestre reduced prices by a third on the video intercoms his company makes for homes and apartment buildings. But that has not helped, so, along with many other Spanish employers, he is continuing to fire workers.

The nation’s jobless rate, already a painful 15.5 percent, could soon reach 20 percent, a troubling number for a major industrialized country.

With the combination of rising unemployment and falling prices, economists fear Spain may be in the early grip of deflation, a hallmark of both the Great Depression and Japan’s lost decade of the 1990s, and a major concern since the financial crisis went global last year.

Deflation can result in a downward spiral that can be difficult to reverse. As unemployment rises sharply and consumers cut spending, companies cut prices. But if sales do not pick up, then revenue can decline further, forcing more cuts in workers or wages. Mr. Maestre is already contemplating additional job and wage cuts for his 250 employees.

Nowhere is this cycle more evident than in Spain. Last month, it became the first of the 16 nations that use the euro to record a negative inflation rate. The drop, though just 0.1 percent, had not happened since the government began tracking inflation in 1961, and Spanish officials have said prices could keep dropping through the summer.

Some of the decline came as volatile food prices sank; the cost of fish fell 6.2 percent, and sugar was down 5.7 percent. But even prices in normally stable sectors like drugs and medical treatments fell 0.7 percent in March, and there were slight declines in footwear, clothing and prices for household electronics.

“Alarm bells are going off,” said Lorenzo Amor, president of the Association of Autonomous Workers, which represents small businesses and self-employed people. “Economies can recover from deceleration, but it’s harder to recover from a deflationary situation. This could be a catastrophe for the Spanish economy.”

Deflation is not just a Spanish concern. Luxembourg, Portugal and Ireland have reported price drops, too. While the declines have been slight — and prices rose modestly after factoring out food and energy prices, which can fluctuate widely — other figures released this month suggest the risk of deflation is growing.

Source/Full Story:: NYTimes.com

The U.K. inflation rate unexpectedly rose in February after higher food costs and the weakness of the pound sustained price pressures even as Britain’s recession deepened.

Consumer prices rose 3.2 percent from a year earlier, the Office for National Statistics said today in London. The median forecast of 28 economists was for 2.6 percent. Officials said that Bank of England Governor Mervyn King will explain the increase in a letter to the government today after the rate breached its 3 percent upper limit.

Bank of England policy makers say the higher cost of imports from the British currency’s drop may make inflation volatile while the recession defuses prices pressures from the economy. The bank has started printing money to fight the slump and King says the outlook for consumer prices will determine how long they need to keep doing so.

“We’ve got such huge spare capacity in the economy,” James Knightley, an economist at ING Financial Markets in London. “Inflation pressures are going to be very weak indeed in the months to come. The process will continue through this year and into the next.”

Inflation accelerated by 0.2 percentage point from 3 percent in January, the statistics office said. The rate increased for the first time in five months.

Prices of food and non-alcoholic drinks increased, boosted by gains in the cost of vegetables after poor crops in Spain of cucumbers and courgettes, the statistics office said. The data also showed the effects of the exchange rate pushed up the cost of imports, influencing this month’s figures.

Source: Bloomberg.com

A “perfect storm” of food shortages, scarce water and insufficient energy resources threaten to unleash public unrest, cross-border conflicts and mass migration as people flee from the worst-affected regions, the UK government’s chief scientist will warn tomorrow.

In a major speech to environmental groups and politicians, Professor John Beddington, who took up the position of chief scientific adviser last year, will say that the world is heading for major upheavals which are due to come to a head in 2030.

He will tell the government’s Sustainable Development UK conference in Westminster that the growing population and success in alleviating poverty in developing countries will trigger a surge in demand for food, water and energy over the next two decades, at a time when governments must also make major progress in combating climate change.

“We head into a perfect storm in 2030, because all of these things are operating on the same time frame,” Beddington told the Guardian.

“If we don’t address this, we can expect major destabilisation, an increase in rioting and potentially significant problems with international migration, as people move out to avoid food and water shortages,” he added.

Food prices for major crops such as wheat and maize have recently settled after a sharp rise last year when production failed to keep up with demand. But according to Beddington, global food reserves are so low – at 14% of annual consumption – a major drought or flood could see prices rapidly escalate again. The majority of the food reserve is grain that is in transit between shipping ports, he said.

Source: guardian

Shell will no longer invest in renewable technologies such as wind, solar and hydro power because they are not economic, the Anglo-Dutch oil company said today. It plans to invest more in biofuels which environmental groups blame for driving up food prices and deforestation.

Executives at its annual strategy presentation said Shell, already the world’s largest buyer and blender of crop-based biofuels, would also invest an unspecified amount in developing a new generat­ion of biofuels which do not use food-based crops and are less harmful to the environment.

The company said it would concentrate on developing other cleaner ways of using fossil fuels, such as carbon capture and sequestration (CCS) technology. It hoped to use CCS to reduce emissions from Shell’s controversial and energy-intensive oil sands projects in northern Canada.

The company said that many alternative technologies did not offer attractive investment opportunities. Linda Cook, Shell’s executive director of gas and power, said: “If there aren’t investment opportunities which compete with other projects we won’t put money into it. We are businessmen and women. If there were renewables [which made money] we would put money into it.”

Source:  guardian.co.uk

Source: Reuters

Retailers’ sales fell as much as 4 percent during the holiday season, as the weak economy and bad weather created one of the worst holiday shopping climates in modern times, according to data released on Thursday by SpendingPulse.

The figures, from the retail data service of MasterCard Advisors, show the 2008 holiday shopping season was the weakest in decades, as U.S. consumers cut spending as they confront a yearlong recession, mounting job losses and tighter credit.

“It’s probably one of the most challenging holiday seasons we’ve ever had in modern times,” said Michael McNamara, vice president of Research and Analysis at MasterCard Advisors.

“We had a very difficult economic environment. Weather patterns were not favorable toward the end of season, and that resulted in one of the most challenging economic seasons we’ve seen in decades.”

The figures exclude auto and gas sales but include grocery, restaurant and specialty food sales. Although SpendingPulse did not exempt the food prices, McNamara said the decline would have been steeper without them.

“There’s a lot of food that provide a buffer for the total retail sales numbers,” he said.

Full Story

Technorati Tags: Retail sales

Source: farminguk.com

Less than twenty five years ago four African Nations were in the top 10 beef exporting countries in the world, today two of them are starving, whilst the other two are now beef importers..

Bull Brand in South Africa we the fifth biggest beef exporters in the world producing local beef and all the cattle from Namibia formerly South West Africa.. Echo Brand in Botswana had the most modern, state of the art beef plant in the world at Lobatse

.The Vestey Organisation,who were the worlds largest beef and lamb processors were
In Zimbabwe, formerly Rhodesia and operated several beef plants in this lush fertile land for export. Liebigs formerly from London and Fray Bentos in Uraguay ,ran the beef operations of Kenya. through the Kenyan meat commission and together these four counties made up 20pc of the worlds beef exports.

Speaking In Dubai earlier in the year, Sir John Holmes, from the UN¨”s Emergency relief and Humanitarian affairs said “food prices have risen an estimated 40pc since 2007and that security implications should not be underestimated, as food riots are already being reported across the world.”

There has been rioting in Egypt, where butchers shops have lost 50% of there trade due to high prices. To try and ease tensions the Egyptian Police, are baking 70,000 loaves of bread each day to sell to the poor for 1 cent a loaf. More than half the population of Egypt live on less than two dollars a day. Ireland is the main exporter of beef to Egypt in recent years mainly manufacturing cow beef and plain steers.

Romania, Bulgaria and the former Yugoslavia were big exporters of beef into Western Europe, under the old Soviet Regime that source of supply, has since disappeared as the domestic economies have improved and increased local consumption.

In the last year since early 2007,Corn has risen by 36pc,Rice has increased 75pc.Soymeal 87pc and in many counties bread has gone up 130pc in price. The increased production in Biofuels along with increased consumption in emerging economies, such as India and China have played a large part in the crisis.

Meat has been a luxury item in Europe for several years, with high prices caused by the guarantee systems in place to safeguard farmers. However the wealthy economies have been helped by the growth of processed meats, such as sausage, burgers and kebabs these products have always ensured a sufficient meat intake for a healthy diet.

In the last few months there have been Food Riots in Haiti, Cameroon, the Ivory Coast, the price causing the problems today and not just the shortage.

Josette Sheeran, director of the UN World Food Programme said last month “We are seeing the new face of global hunger. We are seeing food on the shelves, yet people are unable to afford it”

George Sorros, one of the biggest land owners in Argentina believes this situation will last for at least 10 years until agriculture catches up to world demand.

Technorati Tags: Food Shortage

Source: The Raw Story

Homelessness and hunger increased in an overwhelming majority of 25 US cities in the past year, driven by the foreclosure crisis and rising unemployment, a survey showed Friday.

Out of 25 cities across the United States surveyed by the US Conference of Mayors, 83 percent said homelessness in general had increased over the past year while 16 cities, or nearly two-thirds of those polled, cited a rise in the number of families who had been forced out of their homes.

In Louisville, Kentucky, the number of homeless families increased 58 percent in 2008 to 931 families from 591 people in 2007, with the rise blamed on soaring food, health care, transportation and energy prices.

Boston, Massachusetts and Providence, Rhode Island blamed the rise in family homelessness on evictions by landlords whose rental properties were foreclosed.

Meanwhile, the number of people seeking food assistance for the first time was up in all 21 cities with data on the issue, and was “particularly notable among working families stressed by the increase in food prices and the slowdown in the economy,” the report said.

Officials in Philadelphia told the survey that “new people coming to food cupboards are people that are employed with children.

“With food prices increasing as much as 30 percent and incomes either staying the same or decreasing, it is impossible for them to feed their families,” the report said.

When asked to identify the three main causes of hunger, 83 percent of cities cited poverty, 74 percent cited unemployment and 57 percent cited the high cost of housing.

And while demand for food assistance was up, providing it was more difficult for cities as the faltering economy and rising joblessness — two key reasons for the increased demand — also caused the number of donations to fall.

Greater efficiency in large grocery stores and food suppliers has also shrunk the availability of food assistance because it has decreased food donations from the large organizations, which are the main donors to food banks.

Food banks — places where donated food is made available free-of-charge to needy people — are the main providers of food aid in most US cities.

They have struggled in the past year to maintain stock levels due to the increased cost of food and fuel.

“Los Angeles, Boston and Portland reported that increases in the price of food have lead to a decrease in the quantity of food they are able to purchase,” the report said.

“In Phoenix, where the cost of fuel and trucking expenses has increased by as much as 72 percent, the total amount of food distributed decreased by 13 percent even though the level of funding increased by 30 percent,” it said.

The price of food increased 6.2 percent on average over the last year, the largest increase in nearly 20 years, the report said.

And during the 12-month period ending in September for which most of the cities provided data, gasoline (petrol) prices skyrocketed in the United States to reach record highs of more than four dollars per gallon to the consumer, with the price of diesel fuel used by truckers going even higher.

Technorati Tags: Homelessness, hunger

Source: NYTimes.com

Food Prices Rising

For more than a year, food manufacturers have been shaving package sizes and raising prices, declaring that they had little choice because of unprecedented increases in the cost of raw ingredients like corn, soybeans and wheat.

Prices are dropping for commodities like this corn being harvested near Auburn, Ill., but economists predict the cost of food for consumers will continue to increase through next year.

Now, with the price of grains and other commodities plunging, it may seem logical that grocery prices will follow. But while prices for some items like milk and fresh produce are dropping, those of most packaged items and meat are holding firm or even increasing. Experts warn that consumers should not expect lower prices anytime soon on most items at the grocery store or in restaurants.

Government and industry economists project that the overall cost of food will continue to climb in 2009, led by increases for meat and poultry. A big reason, they say, is that food companies still have not caught up with the prolonged run-up in commodity prices, which remain above historical averages despite coming down from their highs early this year.

The Agriculture Department is forecasting that food prices will increase 3.5 to 4.5 percent in 2009, compared with an estimated 5 to 6 percent increase by the end of this year.

Full Story

Technorati Tags: commodities, corn, soybeans , wheat

Source: Bloomberg.com

Food Prices Rising

Food prices will rise next year, prompting a revival of protectionism from food-growing nations and risking a renewed bout of rioting, according to Jochen Hitzfeld, an analyst at UniCredit SpA in Munich.

“Agricultural commodities will outperform the broad commodity indices in 2009,” Hitzfeld wrote in a research note this week. “If key crop-producing countries then impose export bans again and speculators drive up prices via physical stockpiling and futures contracts, new food unrest is even conceivable in the second half of 2009.”

The CHART OF THE DAY shows food prices for the past 10 years as measured by an index compiled by UBS AG and Bloomberg that tracks at least 13 foodstuffs, including wheat, soybeans, sugar, cocoa and coffee. The index has declined 35 percent since peaking in July.

“The prices of many agricultural commodities are now clearly below their production costs,” Hitzfeld wrote. “We expect the coming year to bring a cutback in area under cultivation as well as a decline in the yield per hectare.”

Technorati Tags: Food prices

Source: washingtonpost.com

Fueled by rising unemployment and food prices, the number of Americans on food stamps is poised to exceed 30 million for the first time this month, surpassing the historic high set in 2005 after Hurricane Katrina.

The figures will put the spotlight on hunger when Congress begins deliberations on a new economic stimulus package, said legislators and anti-hunger advocates, predicting that any stimulus bill will include a boost in food stamp benefits. Advocates are also optimistic that President-elect Barack Obama, who made campaign promises to end childhood hunger and whose mother once briefly received food stamps, will make the issue a priority next year.

“We soon will have the most food stamps recipients in the history of our country,” said Jim Weill, president of the Food Research and Action Center, a D.C.-based anti-hunger policy organization. “If the economic forecasts come true, we’re likely to see the most hunger that we’ve seen since the 1981 recession and maybe since the 1960s, when these programs were established.”

The Agriculture Department is set to release the new numbers as early as this week. Agency officials declined to confirm the figures but outlined them in a briefing last month for advocates and administrators of state food stamp programs. Breaking the symbolically important 30 million mark comes on the heels of government data showing that 11.9 million people went hungry in the United States at some point last year. That included nearly 700,000 children, up more than 50 percent from the year before.

Food pantries and other charitable organizations are also reporting an increase in demand from those in need. Visits to local pantries are up by 20 to 100 percent over the past six months, and calls to the Capital Area Food Bank’s hunger hotline have jumped 248 percent. Most are from people who have never used food stamps or a pantry before, said Lynn Brantley, the organization’s president and chief executive.

Analysts attribute the jump primarily to rising unemployment, which hit 6.5 percent in October and is predicted to increase to 8 percent by the end of 2009, but rising food costs are also a factor. Although prices have fallen from the levels of this past spring, they remain high. In October, the consumer price index for food and beverages had jumped 6.1 percent over last year. Staples such as eggs and bread rose even faster.

For low-income families, who spend a higher percentage of their monthly budget on food, that rise has been particularly painful. Food stamp benefits are adjusted for inflation only once a year, and as of September, the maximum benefit fell $64 a month short of the cost of the thriftiest, USDA-established diet for a family of four. The annual adjustment in October of 8.5 percent largely brought the benefit in line with food costs again, but the Center on Budget and Policy Priorities, a nonpartisan policy group, estimates that if current inflation persists, by December benefits will again fail to match the cost of the thrifty food plan.

“At a time when we have more people turning to the food stamp program, it is less and less able to meet their basic food needs,” said Stacy Dean, the research center’s director of food assistance policy.

To qualify for the food stamp program, whose name was officially changed last month to the Simplified Nutrition Assistance Program, recipients must have an income below 130 percent of the federal poverty level, or less than $27,564 for a family of four. The benefits, which average $109.93 a month per person, are based on a plan set by the government to represent a low-cost but nutritionally adequate diet. Participants apply locally to receive an electronic card that is used like an ATM card to buy food at most grocery stores and some farmers markets. The maximum benefit for a household of four is $588 a month.

At the Department of Human Services on H Street NE yesterday, the benefits office was busy. D.C. resident Harry Washington, 54, had come to apply for food stamps after losing his job at a Dupont Circle restaurant that closed for renovations last month. Over the past three years, he has received food stamps several times to tide him over between jobs. “This all has been going on awhile. It just depends where you are on the totem pole whether or not you have felt it,” Washington said.

Jaqueline Hawkins was also there to sign up. The 47-year-old broke her hip last November, forcing her to leave her job at a Whole Foods Market. Hawkins received short-term disability, then unemployment benefits. Both have run out. “I came for food stamps because my other options have expired,” she said. Hawkins plans to begin looking for work after Jan. 1.

Benefit applications are up around the Washington area. In the District, the number of applicants in October was 7.5 percent higher than last year’s. In Arlington County, the average number of food stamp applications in the past six months is up 17 percent over applications during the same period last year.

At the Arlington Food Assistance Center, meanwhile, the number of clients has jumped by 25 to 35 percent over last year, said Executive Director Christine Lucas. Lines for food, sometimes with as many as 95 people, begin forming around 7:30 a.m., even though the food pantry does not open until 10.

On a recent morning, one of the early arrivers was Alvaro Ascencio. The 45-year-old, who lost his construction job after 12 years, was hopeful he would find work soon and had turned to the pantry as a stopgap. “If I didn’t know about this, I wouldn’t know what to do,” Ascencio said through an interpreter.

To tackle the problem, supportive lawmakers are pressing to include a temporary bump in food stamp benefits in the next stimulus package. Similar proposals failed to pass twice this year, but there appears to be broad support now for an increase of 10 to 20 percent, advocates and lawmakers said.

Economists say an increase in food stamp benefits would help the economy overall by concentrating relief on those most likely to spend the money quickly, pumping dollars into an economy desperate for demand. According to Mark Zandi, chief economist of the rating agency Moody’s Economy.com, every $1 spent on food stamp benefits generates $1.73 of economic activity, more than extending unemployment benefits or offering state fiscal relief.

“Congress has been focusing on the impact on the financial markets,” said Dean at the Center on Budget and Policy Priorities. “We want them to focus on the supermarkets and help 30 million people.”

In 2009, the new Congress will also have to deal with renewing the Child Nutrition and WIC Reauthorization Act, which includes school breakfast and lunch programs and the Women, Infants and Children program that provides money for specific foods such as milk and infant formula. The act is due to expire in September 2009, and Sen. Tom Harkin (D-Iowa), who chairs the Agriculture Committee, has long been keen to expand eligibility and strengthen mandates for nutritious food in these government-funded programs.

Technorati Tags: unemployment, food prices

Source: loggingStocks

The problems may be especially acute in the US where some farmers have been making a fortune off corn due to feed demand and ethanol. Many of those farmers decided to expand, take on more debt, and buy new equipment. The price of corn has dropped like a rock over the last five months. How are those farmers going to keep up with the debt service? In many cases, they won’t.

Get ready to pay more for an ear of corns and a loaf of bread. Farm failures are sending food prices back up.

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Technorati Tags: food prices

Source: Daily Express

THE cost of basic foods has soared by nearly 10 times the official inflation rate.

A loaf of sliced white bread and a packet of butter now add up to £2.33 – a 43 per cent rise from £1.62 last year.

Eggs are up 27 per cent at £2.90 a dozen, cheddar cheese is 25 per cent dearer at £7.04 a kilo and best mince is up 20 per cent to £5.80 a kilo.

As the Office for National Statistics figures were released, Chancellor Alistair Darling was telling Britons not to worry and said we would come through the “difficult times”.

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