Saturday, June 23, 2007

Food Prices Increasing

Well, this was predictable!

How effing stupid can we get?

The Bonddad Blog: Food Prices Increasing:

The Big Picture calls it agflation. I think that's a really good title because it explains the concept very clearly and succinctly. The bottom line is food prices are in the news again:

May food prices rose 4.7% from a year earlier, according to the latest consumer price index. The cost of eating out rose only slightly less.

The Agriculture Department said consumer food prices will rise 3% to 4% this year, notably faster than last year's 2.3% gain.

Tighter world grain supplies on top of extra ethanol demand could send those numbers even higher.

That's straining some of the equilibrium in markets that are used to a little more wiggle room, analysts say.

'We could be adding to the mix a supply problem,' said Darin Newsom, a commodities analyst at DTN in Omaha, Neb. 'We could have both situations going on this summer where we have long-term demand change and the short-term supply problems. It could get very interesting over this summer until we get a better handle in late August or early September on what's actually been produced.'

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