G.O.O.D

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.

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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

From the High Plains/Midwest AG Journal

Farmers along the Arkansas River, its tributaries and other rivers on the eastern side of the state are waiting nervously for the floodwater covering their wheat to drain away.

“They definitely didn’t need this,” said Dr. Jason Kelley, Extension wheat agronomist with the University of Arkansas Division of Agriculture. “I’m sure the (flooded) acreage numbers are much greater than we envisioned last week when the rain started–tens of thousand of acres I’m sure.”

He said the flooding will be an economic hardship on some farmers counting on the crop. The flooding will likely reduce yields in some fields and may kill the crop in other fields, depending on how long the water stays on the fields. Additionally, all the money farmers have invested in the crop could be lost.

In Prairie County Monday, March 24 Hank Chaney watched a mobile home floating down the rain-swollen White River. Chaney, county Extension agent with the University of Arkansas Division of Agriculture, said other homeowners were watching water creep closer to their homes.

Some of the county’s farmers are upset and worried that if the water doesn’t come down fast enough, they’ll be in trouble on their wheat contract, Chaney said. “The price looks so good, and they were hoping to sell at that price, but if the water doesn’t come off soon enough, they’ll have trouble coming up with the wheat to fulfill their contract obligations.

“Last year, we had a freeze, and now we have flooding,” Chaney said.

Jackson County farmers are in the same situation.

“I’ve gotten several calls this morning and last week from farmers wanting to know how many days water can stand on wheat before their wheat is seriously hurt or destroyed,” said Randy Chlapecka, Jackson County Extension agent. He said it’s hard to give them an answer because there are so many variables involved.

He said several thousand acres of wheat are under water along the White River.

Chlapecka figures if water has only been standing on wheat two or three days, the wheat will probably recover. Other wheat has been covered four to six days, “and we don’t expect good things.”

Besides the prospect of a crop loss or yield losses, farmers have considerable money tied up in their crops. In the fall, they spent money on pre-plant fertilizer, seed and land preparation. Most farmers have already applied at least half of their spring nitrogen fertilizer.

“There was a lot optimism at planting because of high commodity prices,” Chlapecka said. Now, instead of a profitable crop, he said, they’re looking at substantial losses.

“I’m sure we’ll get through it. You know resilient farmers are,” he said.

Woodruff County Agent Eugene Terhune says farmers face an additional problem.

“Even when the water goes down, there’s so much debris that has floated over those fields that it’ll take farmers a lot of work to get fields ready to plant soybeans and other crops,” he said.

For more information about flooding and wheat production, contact your county Extension agent. The Cooperative Extension Service is part of the U of A Division of Agriculture.

Technorati Tags: wheat, famine, recession

Via Business Week

Costlier corn flakes, pricier pizzas and painful pump fill-ups share more than top billing among consumers’ worries.

They’re all riding a roller coaster of commodity market prices, where peaks are unusually high. Like oil futures, agricultural futures have experienced dramatic highs and lows in recent months as Wall Street investors flock to commodities for protection from the falling dollar and slumping stocks.

But the ups and downs in futures prices are giving grain sellers and farmers financial vertigo. Instead of finding predictable prices for wheat, corn and other crops in futures markets, they’re getting daily price jolts and no refuge from uncertainty.

That has prompted government regulators to examine what forces, if any, have thrown the markets off balance.

Technorati Tags: famine, wheat, economics, recession

Resource Investor - Softs - SED Outbreak in China Threatens 4.83 Million Hectares of Wheat

SED Outbreak in China Threatens 4.83 Million Hectares of Wheat

By Interfax-China
24 Mar 2008 at 10:34 AM GMT-04:00

SHANGHAI (Interfax-China) — An outbreak of sharp eyespot disease (SED), which affects cereals, is threatening 72.46 million mu (4.83 million hectares) of wheat in China’s major producing regions, according to local agricultural authorities.

SED might erode the wheat output by 10% to 20%, while a more serious epidemic could cut output by as much as 50%, officials from the Henan Oil and Grain Product Quality Inspection Center told Interfax. “As it is still the early growth stage for wheat, the impact on output might be reduced, although wheat quality may be downgraded,” an official from the center said.

Huang Junfei, a senior commodity analyst with Changjiang Futures, believes SED may well erode wheat output by around 5% on the 4.8 million affected hectares. As there are still a few months before the harvest, good farm work may be able to make up the losses.

The outbreak is being blamed on remnants of the disease from last year, coupled with favourable conditions, including plentiful water supplies in some regions and weakened resistance caused by a cold snap earlier this year.

Agricultural authorities caution that the peak season for SED normally lasts from mid and late March until mid April.

China’s wheat cultivation in 2008 is expected to stay flat at around 23 million hectares with output expected to top 100 million tonnes.

Below is a table specifying SED outbreaks in major wheat producing regions by March 10.

Commentary

A batch of negative news is coming for China’s 2008 wheat crop in 2008 with parts of Henan and Hebei reported serious drought while the Wheat Sharp Eyespot Disease is threatening Hennan, Shandong, Jiangsu, Anhui, Hubei and Shanxi.

Some unexpected events, like the January snowfall and cold snap, might affect wheat market fundamentals - considering China’s grain supply is already at a fine balance.

When he opened the third seal, I heard the third living creature say, “Come!” And I looked, and behold, a black horse! And its rider had a pair of scales in his hand. And I heard what seemed to be a voice in the midst of the four living creatures, saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius, and do not harm the oil and wine!” Rev 6:5-6  ESV

5 When he opened the third seal, I heard the third living creature call out, ‘Come!’^* I looked, and there was a black horse! Its rider held a pair of scales in his hand, ⁶and I heard what seemed to be a voice in the midst of the four living creatures saying, ‘A quart of wheat for a day’s pay, and three quarts of barley for a day’s pay,  but do not damage the olive oil and the wine!’   Rev 6:5-6  NRSV