Drought Alert – Higher Food Prices

Reading time: 1005 words, 3 to 5 minutes

The drought ravaging the U.S. and southern Ontario farmland will drive up the price of food but you can protect yourself if you act now.

Macleans reports that the drought will have a global effect; “The U.S. is the world’s largest exporter of corn, wheat, and soy beans. Those prices have soared domestically, will rise for everyone else, too.”

Dr. Jeff Master’s WunderBlog calls it the worst drought since the ‘Dust Bowl’ during the last Great Depression.

More than half of all U.S. counties covering 32 states have been designated primary disaster areas. See the drought chart below.

Several weeks ago, the general consensus was the drought would raise food prices between 3% to 5%. Now the consensus is for a sigificant double digit increase Wired Science forecasts the drought will carry into October.

Half of the U.S corn crop was rated poor to very poor. About 37 percent of the U.S. soybeans are in the same category and almost 75% of U.S. cattle acreage is in drought-affected areas.

Beware the brainless ass media. They will downplay the effect of this drought as they regurgitate the usual stupidity from retarded Keynesian economists who couldn’t walk and chew bubble gum at the same time. For instance, Macleans quotes Sylvain Charlebois, a University of Guelph economist, “If they [consumers] believe beef is too expensive, they’re probably going to trade down to chicken or pork. There are lots of substitutes out there.”

Corn, grain and soybean meal are staples in animal feed. That includes pigs and chickens too. The idiot so-called economist Charlebois doesn’t understand Economics 101 basics of supply and demand. Lower supply of grain will increase the price of animal feed and this increased cost input plus the increased demand for pork and chicken will drive up their prices too. It’s not rocket science unless you’re a retarded Keynesian.

Larry Pope, chief executive of Smithfield Foods has a better grounding in reality. He warns that, “beef is simply going to be too expensive to eat. Pork is not going to be too far behind. Chicken is catching up fast.”

How to Protect Yourself

So, is there anything you can do? Yes, there are ways to mitigate the consequences of this drought.

Timing will be important for meat. Cattle ranchers will be forced to bring more animals to slaughter. At first, this glut will drive DOWN the price of beef or at very least will dampen their price increases. So NOW is the time to buy meat because once the excess inventory has been sold the lower supply will increase prices significantly. The same will likely happen to pork and chicken but don’t wait; start buying now.

I’ve said it numerous times before; start stockpiling food that you and your family regularly eat and not just meat.

Do you have a freezer? If not, why not? A freezer is one of the best investments you can make. They range in size from 3 to 20 cu. ft. and are priced from about $150 to $800 or more. I’d avoid the smallest ones as they are not energy efficient and don’t hold much but they’re better than nothing. Size it according to price and space requirements.

For tips on long term meat freezing, see the bottom of my Stockpiling article.

Tess Pennington offers some drought preparedness tips:

“The price increases will be dramatic. Expect to see fewer grocery store sales, especially those great “loss leaders” we all love to take advantage of.

“Prepare for this by stocking up NOW before the major price increases hit. For instance, purchasing bulk dried corn, corn meal, and a diverse supply of bulk meats before the prices rise. Pamper your garden and get every single ounce of produce you can squeeze out of it. Buy in bulk to take advantage of lower prices and preserve food for use this winter.

“Make adjustments in your shopping and eating habits now to weather the upcoming food crisis.

“If you’ve got a freezer, load it up with as much meat as you can afford to buy. Package dry goods for the long-term and have a steady supply of beans, wheat (or flour), corn and rice on hand to dip into if prices do happen to jump. While we all hope for a rainy year in 2013 to get struggling farmers back on their feet and our prices at the grocery stores to affordable levels, taking measures today based on the credible information available to us can help save us from paying 30% or more in food costs over the course of the next several months.

“While the idea of buying commodities at lower prices today may save us money, worst case scenario planning is always in order. A well-stocked food pantry can help us supplement our diets for quite some time if we experience a drought similar to the Dust Bowl of the 1930′s, which was felt for three consecutive and particularly devastating years before things began to return to normal.”

For tips on water conservation in drought areas, CLICK HERE for Tess Pennington’s article.

It’s doubtful the ass media will convey the full impact of this drought. For one thing it is NOT confined to North America. Other ‘breadbasket’ countries like Russia, Australia, India, Kazakhstan and the Ukraine are all in drought conditions.

As outlined above, there are things you can do to prepare and mitigate the worst of this drought. Unfortunately, most of the world already lives in poverty so this drought will have a drastic global impact the consequences of which remain to be seen.

Do what you can to protect yourself and your loved ones.

August 4, 2012

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About gerold

I have a bit of financial experience having invested in stocks in the 1960s & 70s, commodities in the 80s & commercial real estate in the 90s (I sold in 2005.) I'm back in stocks. I am appalled at our rapidly deteriorating global condition so I've written articles for family, friends & colleagues since 2007; warning them and doing my best to explain what's happening, what we can expect in the future and what you can do to prepare and mitigate the worst of the economic, social, political and nuclear fallout. As a public service in 2010 I decided to create a blog accessible to a larger number of people because I believe that knowledge not shared is wasted.
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