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Thursday, January 21, 2010

Food Shortages?

A quick tip:  Start watching food prices and availability.

Why?  We all know the government "plays" with the economic statistics it produces.  It fully admits this.  For instance, official unemployment numbers don't count the unemployed that no longer receive unemployment benefits.  Those people are just as unemployed as the people getting payments, but they don't get included in the official numbers.

Ditto for inflation, "economic outlooks", housing starts, blah, blah, blah.  Pick an index.

The rosier numbers make people feel warm-and-fuzzy.  They allow people to go back to the latest "American Idol" or "Jersey Shore" episode, feeling safe and secure.

What they can't manipulate is actual food.  It is their Achilles Heel.  They can manipulate surplus grain storage numbers, future projections and expected yields.  But, if the farmer doesn't bring the grains, fruits, vegetables or livestock to market, the majority of Americans won't be eating.  Or they'll be eating less, for more money.

You can't eat rosy projections.

Many are beginning to get worried about the upcoming crop yields.  I don't know if the data are true or not.  Alarmists can manipulate data just as well as the government. What I do know is that if these predictions come true, we're in for a world of hurt.

I try and use my own eyes to determine what's going on.  In my area of Northern California, food prices have been inching up for the past few months.  It seems the one exception is pork.  That may be changing soon, as a number of hog processing plants have been tapped for closure this spring.

It won't matter how many Barry Bucks the administration tries to shove into the out-stretched hands of our ever-dependent population.  If the food's not there to buy, what good is the government script?

Accept The Challenge

Assume for a moment that the government projections are correct.  We have huge surplus' of food.  The supply chain from farm to processing plant to market is humming right along.

What would be the down-side of stocking up food?  Other than a minor increase in current food expenditures, there is no down-side.  It is food that will simply be rotated into your regular meal cycle.

But, if the projections are being fabricated, and you haven't prepared, you will either go hungry, or will find yourself in the soup and bread lines of the past.  Throw in a man-made or natural disaster like Katrina or Haiti, and you might have difficulty finding the soup and bread lines.

Why would you ever take such a risk?

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Copyright 2009 Bison Risk Management Associates. All rights reserved. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates. www.BisonRMA.com

4 comments:

Andrea said...

Excellent post. Right on target! I do believe we're in for a shortage and I think the rising prices are an indication of that. Milk and sugar have both gone up 25% or more in my area.

Like I stated on my blog...the farmer in the field behind us took in a record crop...and lost a large amount of his harvest to mold because of the high moisture levels. I think it's all a matter of how you twist the numbers and who you want to believe.

Chief Instructor said...

Milk and sugar in our area have significantly risen in price as well, but I'm seeing it across the board. It's difficult figuring out why it's happening, because all of the government, "happy numbers" would indicate the opposite should be happening.

The Hermit said...

There have been a number of articles in the press lately about food shortages. I notice prices in the Walmart where I shop are inching up as well.

Chief Instructor said...

Yep, if you look at the official government numbers, we're fairly swimming in excess foodstuffs. It makes no sense. Here in CA alone, we've got 500,000 acres sitting fallow simply because the water is not available. How could that NOT affect food availability? I think they're tweaking these numbers just like they tweak all of the other economic-related numbers.

I think the real market is starting to speak. Supply and demand is coming into play.