There are a lot of reasons why we may experience a food shortage here in the United States. Natural or man-made disasters are the most obvious possibilities, but mandates and other incentives for biofuels has us wasting food on machines instead of feeding people. And the banking crisis has put many farmers in jeopardy too. In fact, famed investor Jim Rogers sees a food shortage on the horizon.
A severe food shortage is on its way, according to well-regarded investor Jim Rogers. Food inventories are the lowest in decades and "[m]any farmers cannot get loans to buy fertilizer now, even though we have big shortages developing," Rogers said on CNBC.
For investors, that could mean a buying opportunity in commodities, in particular coffee and cotton, Rogers said. In fact, he says commodities are a much better buying opportunity than stocks right now.
For the rest of us, a food shortage could mean skyrocketing food prices. "Sometime in the next few years, we're going to have very serious shortages of food everywhere in the world and prices are going to go through the roof," he said.
How will we survive?
Most of our population no longer understands how to raise their own food supply. Even worse, nobody cares. People just assume they'll always be able to run up to the local supermarket to get whatever they want. We, as a people, are unprepared for such a disaster. Only a small percentage of us even keep a garden anymore.
Americans are no longer self sufficient, unable to take care of our most basic needs without the federal government. We've relinquished even our own survival to the bureaucratic state. This has become evident in the string of disasters we've experienced over the past decade too. Within days, people run out of food and water. No longer able to take care of their families, they expect the government to come in and provide their sustenance for them.
If you think a food shortage can't happen here in America, think again, because it's already starting to happen. Have you noticed you grocery bills rising? Take a look at this recent headline form The Washington Times.
Wholesale prices rose more than expected last month as food prices surged by the most in 26 years.
The Labor Department said the Producer Price Index rose by 0.7 percent in March. Analysts expected a 0.4 percent rise. A rise in gas prices also helped push up the index.
While there are many factors involved in the price of food, two of them are quite troubling: 1) the moratorium on oil production in the gulf will drive up fuel costs, and 2) the world experienced a devastating fall in food production as a result of low commodity prices and lack of credit thanks to the Federal Reserve induced banking crisis. Adding to these factors, worldwide demand for food is up too.
In the next ten years, prices for agricultural products in the world will grow in real terms by 15-40%, say experts from the Organization for Economic Cooperation and Development and the Food and Agriculture Organization of the UN. The reason for it is the increasing demand for food in developing countries and production of biofuels.
According to the report, prices for wheat and coarse grains will increase by 15-40%, prices for oil will grow by more than 40%, while prices for dairy products will increase by 16-45%.
The growth of prices in the beef producing area may not be that high, but here much will depend on the growth of wealth in developing countries. "With the growth of income per capita, meat and dairy foods, which were not previously affordable for everyone, will be in greater demand," the authors of the report say.
In general, the increase in food consumption is due to rising demand from developing countries. The experts do not expect any spikes in the next few years, but they remind us about dependency between cost of food production and oil prices.
Yet, the increase in prices of some foods may begin as early as 2010, experts say. Rice may become considerably more expensive. Analysts predict growth of 63%, up to $1038 per ton (currently the price is $638 per ton), which is associated with the issues experienced by the traditional rice exporters, India and the Philippines. As stated in the report, in 2010 - 2019 average prices for wheat and coarse grains adjusted for inflation will rise to 15-40% compared to 1997 - 2006.
There is some good news in the short-run. Maybe. The government says the "US Midwest expects a record harvest," and "grain reserves in the U.S. will grow to the highest point since 1987." But these are government forecasts, which always paint a rosier picture than reality. Just think about this for a moment ... The same USDA that expects "a record harvest," has also declared half the Midwest disaster areas due to catastrophic crop losses. So which is it?
The government better be concerned about rising food prices too. Because a sharp rise in food costs will result in the collapse of the US Treasury market and the dollar, as central banks try to dump their foreign reserves hoping to appreciate their currencies to lower the cost of imported food.
The world is in turmoil right now, so anything can happen. Are you going to keep putting your faith in government bureaucrats? I'm not. In fact, some people think the government is lying about our food supply. It wouldn't surprise me either. The government lies all the time.
While trend experts, economists and investment gurus have been predicting food shortages for some time, new evidence indicates the U.S. Department of Agriculture may be covering up the greatest food shortage in modern history.
One analyst, Eric deCarbonnel from MarketSkeptics.com believes the answer is found in data he believes the U.S. Department of Agriculture has manipulated to keep food prices low.
"Instead of adjusting production estimates down to reflect decreased production, [the USDA] adjusted estimates upwards to match increasing demand from China. In this way, the USDA has brought supply and demand back into balance (on paper) and temporarily delayed a rise in food prices by ensuring a catastrophe in 2010," he said.
How will we survive?
What happens if we experience a long-term food supply shortage? Are you prepared? Do you know how to grow a garden? Does your family even have seed? And is the seed of the heirloom variety, or is it one of the genetically altered strains produced by large agribusiness? Because if it's genetically altered, your family might starve. Genetically altered seeds are viable for only one season with no ability to harvest seed for the future, leaving you and your family at the mercy of the bureaucratic state.
Our economy continues to decline, regulatory fallout from the gulf oil disaster could be devastating, central banks around the globe are preparing for a post-dollar world, and a food shortage is a serious possibility.
America is not too big to fail. It's up to each one of as individuals to prepare our families for the inevitable crisis our country will face. How we survive depends on how well informed and prepared we are as individuals.
Will you and your family starve? That's up to you.