Healthy soil and sustainable growing

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"Get Ready For Higher Food Prices" Goes Mainstream
by Tyler Durden on 02/10/2011 09:45 -0500
http://www.zerohedge.com/article/get-ready-higher-food-prices-goes-mainstream?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

While nothing new to Zero Hedge readers, the realization that everyone's 
purchasing power is about to be yanked from underneath them has gone 
mainstream. Omaha.com has just come out with a headline that leaves little to 
the imagination: "Get ready for higher food prices." ...So for those who wish 
to stock up on staples in advance of a price surge (thereby bringing the 
price jump forward), and still haven't done so, here is the "mainstream" 
explanation for why now is a very good time to start doing so.

>From Omaha.com

    Shoppers could see higher grocery bills as early as three months from 
now, though most of the impact won't be felt for another six months, said 
Scott Irwin, an agricultural economics professor at the University of 
Illinois.

    Chicken prices are among the first to rise because the bird's life span 
is so short that higher feed costs get factored in quickly, he said. Price 
hikes for hogs take about a year and cattle two years. Prices on packaged 
foods take six or seven months to rise.

    Tyson Foods, the nation's biggest meat company, said chicken, beef and 
pork prices are expect to rise this year, if only slightly, as producers seek 
to cover costs.

    ConAgra Foods Inc. — the Omaha-based producer of brands including Healthy 
Choice, Banquet and Chef Boyardee — is raising prices on some of its products 
because of higher costs for corn and fuel, said Teresa Paulsen, a spokeswoman.

    The price rally has bolstered the financial fitness of America's crop and 
livestock operators over the past eight months. Midwestern cropland is 
yielding record values. Rural banks and equipment makers report record 
profits.

    “We're seeing record income levels for the ag community and ... wealth 
accumulation that cannot be denied,” said Bruce Johnson, an agricultural 
economist at the University of Nebraska-Lincoln. “We've moved into a whole 
new level.”

    Said Bruce Babcock, an agricultural economist at Iowa State University: 
“Farmers are going to be earning quite a bit more money.”

    Jason Henderson, Omaha branch executive for the Federal Reserve Bank of 
Kansas City, said farmers are buying more tractors, pickup trucks, grain bins 
and land.

    “And they also come to Omaha to shop and go to events,” he said.

    But it hasn't been simply a spending spree, Henderson said. Farmers are 
paying down debt and fewer are seeking loan renewals or extensions.

    “It's a good time to be an ag banker,” said Brian Esch, president of 
McCook National Bank in southwest Nebraska. “But I have concerns over what 
this means for consumers. If one guy is selling at a record profit, someone 
is buying at a record level.”

The only benefit: very soon farmers, least they produce something, will be 
making more than bankers. Which of course means that Wall Street will 
promptly vacate the skyscrapered corridors of the financial district and 
start pushing bales of straw for a living. Just as Marc Rogers has been 
predicting for over a year now.

    The agricultural economies of Nebraska and Iowa will continue to grow 
into greater prominence as global food providers, economists said.

    Johnson said rising population numbers globally and greater demand in 
major developing countries for higher-protein diets have strengthened the 
Midlands' agricultural market.

    Farm cash receipts — led by corn and other crops — doubled in Nebraska 
from 2000 through 2010. Crop receipts alone ended the decade in the $9 
billion range, up from a 2000 total of $3 billion.

Will Ben Bernanke's disastrous monetary policy be the greatest thing to 
happen to America's labor reallocation since Blythe Masters discovered CDS?