Posted on 08/30/2010 7:23:25 PM PDT by blam
Food And Drink Prices To Soar
By Addison Wiggin
08/30/10 Baltimore, Maryland Todays report begins with an abominable horror: The worlds most valuable commodity has soared to its highest price in a generation.
Coffee futures are approaching a 13-year high of $1.88 today.
And the case for more expensive coffee is growing stronger every week: Columbia had a smaller-than-normal harvest last year, and dry conditions in Brazil this year have pinched supply even tighter. Demand for this delicious, addictive stimulant is (naturally) growing.
Thus, stockpiles at Intercontinental Exchange-certified warehouses are down 35% this year and swill makers like Maxwell House and Folgers have already raised prices by 9% and 10%, respectively. Starbucks announced recently that it will eat the costs, which will amount to roughly 4 cents a share.
Retail prices would have to rise a whole lot more than 10% for us to even consider switching to something as silly as tea.
Food prices are about to get a huge boost, too. But not in what wed like to think of as a productive way.
Brazil screwed it all up, Chris Mayer, editor of Mayers Special Situations, laments by way of giving us an explanation. Last week, the Brazilian government let loose a sudden, immediately binding mandate that effectively outlawed all foreign ownership of domestic farmland eerily similar to the Zimbabwean farmland coup.
Worse, Chris continues, the legal rules are so unclear that all such acquisitions since 1988 could be null and void, with the land returned to nationals. I can tell you from talking to people down there in the last few days including attorneys that local businesspeople are not dismissing that possibility.
Blame politics. It is an election year in Brazil. The country will vote for a new president on Oct. 3. All indications are that it will be Dilma Rousseff. She is one of the ones who have been highly critical of foreigners buying Brazilian land. Brazilian land for Brazilians is the chant.
What a boondoggle.
In April alone the latest data available foreign investment in Brazilian agriculture was $26 million up 225% from a year ago. Between 2002-08, foreign investors poured nearly $2.5 billion in land alone.
And there are some public funds that probably wont go forward now. Agrifirma raised $189 million and planned an IPO. Macquarie has a fund they set up, and they were to raise as much as $600 million.
The new rules will freeze agricultural investment in Brazil, adds Chris. This is big news for global food markets because Brazil was such a key part of the equation. Brazil, as Ive pointed out, is the worlds arable land bank. This is where wed get the added food supply the world needs.
The implications will echo far beyond the borders of Brazil. It will have an impact on the worlds future food supply and on food prices. And it also raises broader questions about investing in Brazil at all.
[Ed note: Chris was scheduled to lead an investment tour to Brazil this month, but all the farmland projects he was lined up to see have been put on hold because of this mandate. Well keep you posted on further developments.]
yuppers...its about doubled
For later read.
I work in the food industry, and supply is very tight for our commodity.
We are not going to starve, but things will be more expensive.
I’m skipping HS tomorrow and going to Sam’s Club to buy lots of coffee.
And rice, always rice.
Although it looks more expensive , I got one of those pod systems and I fix coffee a cup at a time.
This drops the total throughput cost to about 60 cents a day.
Costs a lot more to make it a pot at a time, and if you’re the only guy drinking the coffee that runs your price up over $1.00 a cup. NOT GOOD.
If so welcome to the new “and alot nicer” Saudi Arabia of food.
The USA
If so welcome to the new “and alot nicer” Saudi Arabia of food.
The USA
I’d forget about coffee and keep a close eye on the futures for wheat and soybeans.
We use a press pot. They make excellent coffee.
Thanks. Just ordered a case of the world finest at the old price.
https://shop.melitta.com/itemdy00.asp?T1=60+131&Cat=
Yes they do make excellent coffee
L
Russia suffers worst wheat harvest in 55 years On top of Burning Nuclear fallout from rampaging forrest fires... Labor and food riots in Poland ,Greenland ,Great Britain Falls to Islamic overthrow of Parliment... Cuba and Nicaragua reach troop strength goals of 800,000. El Salvador and Honduras fall... Green Party gains control of German Parliament. Demands withdrawal of nuclear weapons from European soil... Mexico plunged into revolution overthrown by MS13 ... United Nations Dissolves. United States stands alone.
The New Red Dawn
Put in more coffee.
I buy green beens from Costa Rica (Tres Rios) and roast and grind them myself. I pay about $3/lb counting shipping, etc...
/johnny
I am sure I will love it.
Melitta is outstanding for the price.
I love it.
You can hear them buzz and see them jerking around too ~ they get ALL the caffein!
I like the part about the UN!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.