Basic foodstuff more expensive

[triathing]

I hate to be the one to raise this issue, but ...

Increasing dairy prices are the tip of the iceberg. Anything meat -- particularly beef -- is likely to be quite expensive later this year. Most feedlots rely on corn for animal feed because we grow so much of it and it's so cheap. The problems with that approach are (a) it's not good at all for the cattle, or the people who eat them, and (b) an awful lot of corn is going to be diverted to ethanol production.

If prices stay high, you can also expect to see a fair amount of land diverted from grain to corn production in the spring. So we'll probably see less corn available for human and animal consumption, and less grains, period. And fewer grains = higher prices for everything from bread and cereal to chicken and pig feed.

There are some silver linings associated with the ethanol boom. It is cleaner than gasoline (if nowhere near as efficient; you burn almost as much energy producing ethanol as you get in return) and it should really cut down on the crap in grocery stores. Look at any processed food, and you'll likely see high-fructose corn syrup (HFCS) as an ingredient.

But there's quite a downside, too. Assuming ethanol demand continues, I'm afraid we're really going to be feeling it in our bank accounts by late in the year.

Michael Pollan has done some really outstanding reporting on the whole corn and food issue in The Omnivore's Dilemma, and again in In Defense of Food.

We're paying about $4.25 for ultrapasteurized milk, about $4 for raw milk. Believe the state of Vermont is looking at allowing direct-to-consumer sales of raw milk later in the year, which ought to help farmers and consumers quite a bit.

Again, a well-hidden silver lining: It might finally make economic sense to make our own cheese!

[triathing]

One more post, and then I'll shut up on this topic :-)

From the Saturday NY Times:

January 19, 2008
The Food Chain
An Oil Quandary: Costly Fuel Means Costly Calories
By KEITH BRADSHER
KUANTAN, Malaysia — Rising prices for cooking oil are forcing residents of Asia’s largest slum, in Mumbai, India, to ration every drop. Bakeries in the United States are fretting over higher shortening costs. And here in Malaysia, brand-new factories built to convert vegetable oil into diesel sit idle, their owners unable to afford the raw material.

This is the other oil shock. From India to Indiana, shortages and soaring prices for palm oil, soybean oil and many other types of vegetable oils are the latest, most striking example of a developing global problem: costly food.

The food price index of the Food and Agriculture Organization of the United Nations, based on export prices for 60 internationally traded foodstuffs, climbed 37 percent last year. That was on top of a 14 percent increase in 2006, and the trend has accelerated this winter.

In some poor countries, desperation is taking hold. Just in the last week, protests have erupted in Pakistan over wheat shortages, and in Indonesia over soybean shortages. Egypt has banned rice exports to keep food at home, and China has put price controls on cooking oil, grain, meat, milk and eggs.

[amandajane]

Those are really interesting posts. It seems things are similar here, this is from a report last November:

Food price inflation is going to be a growing theme over the next year, as prices rise globally and the costs of producing food surge. Australia's severe drought, a reduction in European subsidies to farmers, and the greater implementation of biofuels have all added to the pressure on soft commodity prices.

Scoop: NZ PPI Spikes On Dairy Farming Cost Increases

I've just planted a container garden with lots of veggies. It looks like it's going to be really useful later this year.

[lucille]

There have always been predictions that there would be food ramifications with the switch to non petrol fuels and rising petrol prices. But it seems to be happening much faster than it was assumed it would. It is sorta scary.
I found someone who sells farm eggs for $1 a carton (as long as they are still honoring that) but they live about 20 miles away. I may have to coordinate heading there when I am already out that way for something else. I wish I could find somewhere that sold milk direct.

[RedZinnia]

I second Triathing's comments about ethanol being the underlying cause of our food price spikes. An ethanol refinery wanted to located in my hometown last year, which forced me to get educated about the issue. Corn prices are through the roof, but soy, wheat and other crops are going up as well because so many acres have been switched to corn production so that farmers can cash in on the boom. I have a good friend who is a professional grain buyer who predicts a "tsunami" of food inflation by this summer. That is his word, not mine. I hope he's wrong.

[lucille]

Originally Posted by RedZinnia

I second Triathing's comments about ethanol being the underlying cause of our food price spikes. An ethanol refinery wanted to located in my hometown last year, which forced me to get educated about the issue. Corn prices are through the roof, but soy, wheat and other crops are going up as well because so many acres have been switched to corn production so that farmers can cash in on the boom. I have a good friend who is a professional grain buyer who predicts a "tsunami" of food inflation by this summer. That is his word, not mine. I hope he's wrong.

He's spot on. Ethanol production has caused average corn prices to go from $1.25 to over $4 per bushel in about a years time. Wheat flour has gone up a small amount here, about $1 to $2 for a 25# bag of flour. Food manufacturers are claiming the impact is larger. I went to the store today and the cheapest eggs were $1.81 a dozen. We bought in on a cow last summer since the price of beef was pegged to go up. It averaged at $4 a pound for grass fed custom butchered. Maybe looking at grass fed beef as the grain prices go up? We may see if we can buy from this same farmer again this spring and still get close to that price. What we might likely see is those who farm using older methods less based on cheap corn equaling out in price to the usually cheap grain based methods of farming.