How's that economic recovery going for you
Food prices are spiking. From
Reuters:
Food inflation seen back on the table as prices rise
World food prices are likely to rise for a third successive month in March, and could gain further beyond that, with expensive oil and chronically low stocks of some key grains putting food inflation firmly back on the economic agenda.
Food prices grabbed world policy makers' attention after hitting record highs in February 2011 and stoking protests connected to the Arab Spring wave of civil unrest in some north Africa and middle eastern countries.
Prices later receded, but an upturn which began in January, initally seen as a pause in the overall downtrend, has persisted.
The United Nations Food and Agriculture Organisation (FAO) will update its monthly Food Price Index on Thursday and the organisation says prices could rise more in the short and medium term as grain supply tightens and energy prices stay high.
And it's the usual suspects -- not much that can be done except drill drill and more drilling:
"The food price index has an extremely high correlation to oil prices and with oil prices up it's going to be difficult for food prices not to follow suit," said Nick Higgins, commodity analyst at Rabobank International.
Energy prices affect the production of fertilizers as well as costs related to food distribution and farm machinery use.
"We really saw the (food index) declines in Q4 2011 as being anomalous and related more to sell offs from the threats posed by the European macroeconomic situation rather than agricultural fundamentals," he added.
Some agricultural chemicals use petroleum as a feedstock so it is not just fuel costs, it hits us everywhere.
Posted by DaveH at April 8, 2012 7:43 PM