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204 comments on DrumBeat: December 11, 2007

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tstreet on December 11, 2007 - 12:28pm Permalink | Subthread | Parent | Comments top

The same issue places much of the blame for the high increases in food prices on the devotion of corn to ethanol. Food prices have jumped 75% in real terms since 2005. "This year biofuels will take up a third of America's (record) maize harvest".

Yes, perhaps we need to produce or perish. But let us not lose site of what is driving these record food prices. Why people are not protesting in the streets is a mystery to me. Have they not noticed?

If we are going to be forced to be a nation of producers, let it not be because of this misguided policy on encouraging biofuels, especially corn based ethanol.

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shaman on December 11, 2007 - 12:39pm Permalink | Subthread | Parent | Comments top

Why people are not protesting in the streets is a mystery to me. Have they not noticed?

I suspect the reason is the same as for why $3+ gasoline has not caused the meltdown some expected. Over the last three to four decades the portion of our income that we spent on both gasoline and food has decreased. So, while we are being forced to spend more on these items, the impact is not what it would have been in the past. We are likely shifting our spending from non-essentials into these areas without feeling it as excessive pain (especially as we can get those low low prices at Walmart).

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nh3 on December 11, 2007 - 1:35pm Permalink | Subthread | Parent | Comments top

especially as we can get those low low prices at Walmart

through the Chinese subsidies in fuel and labor.

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FTX on December 11, 2007 - 4:25pm Permalink | Subthread | Parent | Comments top

Talking of food (from the FT, so subscription may be required):

Concerns over food inflation as harvests fail

The global economy is facing a second wave of food inflation after the US agriculture department on Tuesday warned of significant falls in stocks of corn, wheat and soyabean and heavy demand.

Officials forecast US wheat stocks would shrink to their lowest level in 60 years, dropping from 312m bushels to 280m by the end of the 2007-08 crop year.
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Cold weather damaged crops in Argentina and drought affected Australia’s wheat production. Flooding also damaged European crops.

Michael Lewis, of Deutsche Bank in London, said the decline in stocks and rising shortages in large parts of Asia suggested 2008 "could deliver another year of . . . price shocks".

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