FOOD PRICES CLIMB TO SEVEN-YEAR HIGH

January’s Food Price Index has risen 10 percent year on year, the highest level since July 2014, the U.N. Food and Agriculture Organization (UNFAO) has announced.

Grain prices led the increase, with China buying large amounts of U.S. corn during the last half of 2020. At the same time, American grain production fell due to wide-scale drought.

South America, a leading exporter of corn and soy, also saw extended dry weather and a reduced harvest.

Now, after a rainless year, corn prices have jumped 45 percent and soybeans 56 percent; wheat prices have risen 11 percent, and rice 27 percent. 

Expectations of even higher prices drove the costs higher as nation’s sought to stockpile grain ahead of the new levies.

China is seeking to replenish its grain reserves and head off domestic grain price increases while it also seeks to rebuild the nation’s hog herd, which has been devastated by African swine flu.

Years of inclement weather in the mid-2010s yielded bumper crops, scuttling prices.

Food shortages and higher prices risk an expansion of global hunger while the world is still dealing with the COVID pandemic, the UNFAO warned. 

TREND FORECAST: We maintain our forecast for Dragflation: the economy will drag lower but prices of goods, services, and commodities will rise higher.

The higher inflation rises, the further GDPs will fall, since the more something costs, the less products and services people can afford to buy. 

Also, as inflation spikes, it will force central banks to raise interest rates, slowing their injections of monetary methadone, which have artificially inflated equities and economies.

We maintain our forecast that most prices will not rise because of supply and demand, but rather because the value of currencies will decline as central banks devalue them by printing trillions to “stimulate” sagging economies. Thus, the cheaper the currency, the more it costs to buy products. 

Gold and silver will continue as the most precious metal safe-haven assets. We maintain our forecast of new rounds of artificial central bank monetary stimulus and massive amounts of government fiscal stimulus that will artificially prop up equity markets and economies. 

4 Comments
  1. […] FORECAST: As noted in our article in this issue, “FOOD PRICES CLIMB TO SEVEN-YEAR HIGH,” we maintain our forecast for Dragflation. Governments will flood failing economics with cheap […]

  2. Craig Bradley 2 months ago

    DEBT BUBBLE & EXCESSIVE GOVT. SPENDING/STIMULUS AS VOLCANO

    My concept of all the QE and stimulus checks and sundry spending by the Federal Government is one of analogy. Picture a Volcano, such as Mt. Vesuvius in Italy in 70 A.D. All was quiet in the prosperous Roman town of Pompeii until one day a strong tremor was felt by the population, both commoner and nobleman alike. Since it had never happened before, they all just thought nothing of it and continued on with their daily routines and run-of-the-mill lives, as we all do today. The commoners probably assumed it would just “go away”. This (denial) is human nature whenever faced with dramatic or potentially drastic changes.

    However, the tremors became stronger and more frequent over time and were accompanied by puffs of smoke from the nearby volcano, as well. Then, one morning, it suddenly erupted and sent an ash cloud thousands of feet into the atmosphere. The ash cloud remained aloft for a time but then abruptly, again without warning, it collapsed and destroyed the town and all its inhabitants. Even Pliny the Elder tried to escape in his yacht in the Sea of Naples, but he too was overtaken by the eruption and perished. It was way to late to escape by land or sea, as it turned-out.

    Unpayable, unproductive debt globally is similar to the rising ash cloud during a volcanic eruption. Once all the bad debts eventually come crashing down upon the people, there will be nothing left to manage or protect. All financial assets will become “toast” and the economy and the markets will be no more. Everyone will be instantly poor and stay that way for years. Its back to the stone age in 48 Hours. This would probably be a Extinction Event, as everyone will be totally alone and on your own. Many if not most people will not make-it if this scenario is allowed to happen, which it most certainly is. So, we truly are on borrowed time. Better make hay while the sun is shining, as the Old saying goes.

    https://cdn.britannica.com/16/77416-120-6D5A3D41/volcano-Mount-St-Helens-south-eruption-May-18-1980.jpg

    https://www.researchgate.net/profile/Sung-Hyo_Yun/publication/264110764/figure/fig1/AS:613930829369365@1523383924581/Three-types-of-pyroclastic-flow-generation-modified-from-Francis-1993.png

  3. David Stone 2 months ago

    Not many cook at home anymore they eat out from fast foods to pre-cooked foods and restaurants. Therefore I don’t think it effects the majority of citizens. Higher food prices will drive more fast food sales.

  4. William Mittelman 2 months ago

    I’ve been growing a lot of food in my garden for years. I have noticed the price of seeds have risen; especially seed potatoes. I have also noticed the amount of seeds per packet have been reduced. I began purchasing a lot of items online and have found prices better ordering direct rather than shopping the stores. The selection is vastly larger. Many companies give free shipping by Fed Ex Ground or UPS Ground; not with delivery by the USPS, but, all the way to the front door by a reputable carrier. I order some items locally and pay on the phone with a credit card and have a local taxi service deliver my purchases to me. Overall, I save a lot of time shopping and save a tremendous amount of money which I normally would spend on gasoline. I find I’m ok with prices overall and am enjoying the extra time I have to do things around the house. I’m also not wearing a mask. I have not been to a store in 80 days.

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