The Food Riots Begin
Food prices rise and social unrest spreads. The latest stories come out of Haiti, that chronically poor country. But riots have been reported in Mexico, Egypt, the Philippines and China. The poor simply can't afford the staples that keep them alive (rice, wheat, corn).
Worse, there's no relief in sight. The cost of farming itself has risen dramatically. First, fuel costs to run machinery: up. Blame rising oil. Then the cost of the machinery itself: up. Blame rising demand for machinery world-wide. As emerging market countries grow, the people demand more and higher quality food. Increased food only comes with increased farming.
Whatever the reasons, you have to wonder who's next. Mexico slapped price controls on corn (their staple). But price controls have a poor track record. Historically it's a temporary solution, at best. What's coming up in the months, even years, ahead?
There will be money made by some. Smart investors will spot the opportunities: companies that manufacture farm equipment, fertilizers, etc. But will the social crisis overwhelm some governments? And what will happen here in the U.S.? Prices have commenced what seems to be a permanent rise. Will things get out of hand here too?
I fear it's only the beginning.
Worse, there's no relief in sight. The cost of farming itself has risen dramatically. First, fuel costs to run machinery: up. Blame rising oil. Then the cost of the machinery itself: up. Blame rising demand for machinery world-wide. As emerging market countries grow, the people demand more and higher quality food. Increased food only comes with increased farming.
Whatever the reasons, you have to wonder who's next. Mexico slapped price controls on corn (their staple). But price controls have a poor track record. Historically it's a temporary solution, at best. What's coming up in the months, even years, ahead?
There will be money made by some. Smart investors will spot the opportunities: companies that manufacture farm equipment, fertilizers, etc. But will the social crisis overwhelm some governments? And what will happen here in the U.S.? Prices have commenced what seems to be a permanent rise. Will things get out of hand here too?
I fear it's only the beginning.
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