Get ready to pay a lot more for produce at the supermarket. In early February the worst freeze in 60 years wiped out entire crops all across the southwestern U.S. and northern Mexico. Already, it has been reported that some U.S. supermarkets have doubled or even tripled prices for certain produce items. Yes, you read that correctly. The price of certain vegetables is actually doubling or even tripling in many U.S. supermarkets. The really bizarre weather that we have been seeing all over the globe this winter is really playing havoc with food prices. The global price of food hit an all-time record during the month of January, and most observers expect food prices to continue to soar. Even before this recent horrible freeze in the southwestern U.S. and northern Mexico, global food prices were pushed higher by unprecedented flooding in Australia and Brazil, and key agricultural areas of China are now experiencing their worst drought in 200 years. Things are getting really crazy out there. Produce prices in the U.S. are eventually expected to return back to normal levels, but this just shows how dramatically food prices can change when a major disaster happens.
Most Americans assume that the United States is generally immune to food price shocks, so this recent freeze is going to shake a lot of people up. A whole lot of Americans are going to be really surprised the next time they go shopping for fresh produce.
For example, at one supermarket in Portland, they have been forced to double or even triple the prices on many produce items as a result of this recent freeze….
« We’ve had to double and triple some prices and consumers come in and it’s quite a shock to them, » said Rusty Peake, GM of Food4Less in Southeast Portland.
Another produce manager recently told a local Portland news station that he has never seen anything like what is currently happening….
« Increase, increase, increase, » said produce manager Troy Winterhalter as he watched urgent messages coming across his laptop computer. « Peppers, zucchini, cucumbers, asparagus, the entire asparagus crop was wiped out, » said Winterhalter.
The following is a very short video news report about this recent freeze and what it is doing to produce prices across the United States…..
One crop that was hit particularly hard by the recent freeze was corn. In fact, officials in Mexico are estimating that four million tons of corn have been lost. That represents a full 16 percent of Mexico’s annual corn harvest.
Tortilla prices were already increasing even before this recent freeze, and now many officials are extremely concerned about where tortilla prices are going to go from here.
Remember, back in 2007 high tortilla prices sparked protests all across Mexico.
But it is not just tortillas that we need to be concerned about.
The truth is that the price of corn is so vitally important because corn is used in literally thousands of different food products….
Corn’s impact on the food industry is unlike that of any other agricultural commodity. At its most basic level, corn is a food staple for billions of people around the world and a key ingredient in dozens of products like breakfast cereals, baked goods, breads, tortillas, chips, soft drinks and even bourbon.
Not only that, corn is also a very significant part of most types of feed for cattle, chickens and pigs.
The price of corn has already doubled in the past six months, and now this freeze is likely to drive prices quite a bit higher.
In fact, most analysts fully expect the price of corn to shatter all former records as we move through the rest of 2011.
In addition, there are other key crops that we should all be keeping a very close eye on as well.
Are you ready to pay a lot more for chocolate?
The price of cocoa is soaring, and many analysts are warning that the era of cheap, plentiful chocolate is rapidly coming to an end.
Right now, usually somewhere between half and two-thirds of all the cocoa on the entire globe comes from the Ivory Coast and Ghana. But rapidly growing worldwide demand coupled with some very serious agricultural problems is causing concern that the global cocoa market is being permanently transformed.
As a recent article in the Globe And Mail explained, cocoa futures hit a 30 year high last month, and there is increasing concern that we are going to be facing some very serious chocolate shortages in the coming years….
Both Ivory Coast and neighbouring Ghana, the world’s second-largest cocoa producer, are on course for an ecological implosion. Their tree stocks are aging and sick; soils are depleted, temperatures are rising and rainfall is erratic. Young farmers are disinterested in growing cocoa, which is associated with poverty, and they are leaving for low-paying but more predictable jobs in the city. Those who stay in rural farm areas are struggling to keep up with demand and have little to invest in farm rehabilitation.
Let us hope that chocolate does not become even more expensive. Those of us that love chocolate already have to pay way too much for it.
Another factor that will be driving up food prices is the rising cost of gasoline. Almost all of our food must be transported over long distances, and so every time the price of gasoline goes up that puts inflationary pressure on the price of food.
It is still winter, and yet gasoline prices in the U.S. are already rapidly marching much higher. In fact, gasoline prices in the United States are now the highest that they have ever been in the middle of February. On Friday, the average price of a gallon of gasoline in the United States was $3.12, which was 50 cents higher than it was a year ago.
Most Americans still blindly believe that our economy is just going to return to « normal » again soon, but the cold, hard truth is that the world is changing. The era of inexpensive, plentiful food that we have all been enjoying is coming to an end.
In the years ahead food supplies are going to be tighter and food is going to be a lot more expensive. Millions and millions of Americans are going to be in for a very rude awakening.
Do not let the changing global food situation catch you and your family by surprise. Now is the time to stock up while food prices are still relatively low.
So what are all of you seeing in your local supermarkets? Are prices on fresh vegetables going up where you live? Feel free to leave a comment with your thoughts below….
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