The Price Of Corn Hits A Record High As A Global Food Crisis Looms

Are you ready for the next major global food crisis?  The price of corn hit an all-time record high on Thursday.  So did the price of soybeans.  The price of corn is up about 50 percent since the middle of last month, and the price of wheat has risen by about 50 percent over the past five weeks.  On Thursday, corn for September delivery reached $8.166 per bushel, and many analysts believe that it could hit $10 a bushel before this crisis is over.  The worst drought in the United States in more than 50 years is projected to continue well into August, and more than 1,300 counties in the United States have been declared to be official natural disaster areas.  So how is this crisis going to affect the average person on the street?  Well, most Americans and most Europeans are going to notice their grocery bills go up significantly over the coming months.  That will not be pleasant.  But in other areas of the world this crisis could mean the difference between life and death for some people.  You see, half of all global corn exports come from the United States.  So what happens if the U.S. does not have any corn to export?  About a billion people around the world live on the edge of starvation, and today the Financial Times ran a front page story with the following headline: “World braced for new food crisis“.  Millions upon millions of families in poor countries are barely able to feed themselves right now.  So what happens if the price of the food that they buy goes up dramatically?

You may not think that you eat much corn, but the truth is that it is in most of the things that we buy at the grocery store.  In fact, corn is found in about 74 percent of the products we buy in the supermarket and it is used in more than 3,500 ways.

Americans consume approximately one-third of all the corn grown in the world each year, and we export massive amounts of corn to the rest of the world.  Unfortunately, thanks to the drought of 2012 farmers are watching their corn die right in front of their eyes all over the United States.

The following is from a Washington Post article that was posted on Thursday….

Nearly 40 percent of the corn crop was in poor-to-very-poor condition as of Sunday, according to the U.S. Agriculture Department. That compared with just 11 percent a year ago.

“The crop, if you look going south from Illinois and Indiana, is damaged and a lot of it is damaged hopelessly and beyond repair now,” said Sterling Smith, a Citibank Institutional Client Group vice president who specializes in commodities.

About 30 percent of the soybean crop was in poor-to-very-poor condition, which compared with 10 percent a year ago.

Conditions for both crops are expected to worsen in Monday’s agriculture agency report.

More than half of the country is experiencing drought conditions right now, and this is devastating both ranchers and farmers.  Right now, ranchers all over the western United States are slaughtering their herds early as feed prices rise.  It is being projected that the price of meat will rise substantially later this year.

The following is from a recent MSNBC article….

For example, you may want to make room in your freezer for meat because prices for beef and pork are expected to drop in the next few months as farmers slaughter herds to deal with the high cost of grains that are used as livestock feed, said Shawn Hackett of the agricultural commodities firm Hackett Financial Advisors in Boynton Beach, Fla. But, he added, everything from milk to salad dressing is going to cost more in the near term, and eventually the meat deals will evaporate as demand outstrips supply.

So there may be some deals on meat in the short-term as all of these animals are slaughtered, but in the long-term we can expect prices to go up quite a bit.

But it isn’t as if food is not already expensive enough.  The price of food rose much faster than the overall rate of inflation last year.

As I wrote about yesterday, American families found their grocery budgets stretched very thin during 2011.  Just check out these food inflation rates from last year….

  • Beef: +10.2%
  • Pork: +8.5%
  • Fish: +7.1%
  • Eggs: +9.2%
  • Dairy: +6.8%
  • Oils and Fats: +9.3%

If prices rose that fast last year, what will those statistics look like at the end of this year if this drought continues?

Sadly, America is not alone.  According to Bloomberg, the U.S. is not the only place that is having problems with crops right now….

Dry weather in the U.S., as well as the Black Sea region; a poor start to the Indian monsoon and the possibility of emerging El Nino conditions suggest agricultural products may rally, Barclays said in a report e-mailed yesterday.

And all of this is very bad news for a world that is really struggling to feed itself.

In many countries around the globe, the poor spend up to 75 percent of their incomes on food.  Just a 10 percent increase in the price of basic food staples can be absolutely devastating for impoverished families that are living right on the edge.

You may not have ever known what it is like to wonder where your next meal is going to come from, but in many areas around the world that is a daily reality for many families.

Just check out what is happening in Yemen….

Crying and staring at his distended belly, 6-year-old Warood cannot walk on his spindly legs.

“We become so familiar with sickness,” said his mother, who according to social norms here does not give her name to outsiders.

She says she has watched two of her children die. “I have to decide: Do I buy rice or medicine?”

The United Nations estimates that 267,000 Yemeni children are facing life-threatening levels of malnutrition. In the Middle East’s poorest country hunger has doubled since 2009. More than 10 million people — 44% of the population — do not have enough food to eat, according to the United Nation’s World Food Program.

In the United States, we aren’t going to see starvation even if nearly the entire corn crop fails.  Our grocery bills might be more painful, but there is still going to be plenty of food for everyone.

In other areas of the world, a bad year for global crops can mean the difference between life and death.

Sadly, it is being projected that the current drought in the United States will last well into August at least.

But even when this current drought ends, our problems will not be over.  The truth is that we are facing a very severe long-term water crisis in the western United States.

Just check out the following facts from foodandwaterwatch.org….

-California has a 20-year supply of freshwater left

-New Mexico has only a ten-year supply of freshwater left

-The U.S. interior west is probably the driest it has been in 500 years, according to the National Academy of Sciences and the U.S. Geological Survey

-Lake Mead, the vast reservoir of the Colorado River, has a 50 percent chance of running dry by 2021

The 1,450 mile long Colorado River is probably the most important body of water in the southwestern United States.

Unfortunately, the Colorado River is rapidly dying.

The following is from a recent article by Jonathan Waterman about how the once might Colorado River is running dry…

Fifty miles from the sea, 1.5 miles south of the Mexican border, I saw a river evaporate into a scum of phosphates and discarded water bottles. This dirty water sent me home with feet so badly infected that I couldn’t walk for a week. And a delta once renowned for its wildlife and wetlands is now all but part of the surrounding and parched Sonoran Desert. According to Mexican scientists whom I met with, the river has not flowed to the sea since 1998. If the Endangered Species Act had any teeth in Mexico, we might have a chance to save the giant sea bass (totoaba), clams, the Sea of Cortez shrimp fishery that depends upon freshwater returns, and dozens of bird species.

So let this stand as an open invitation to the former Secretary of the Interior and all water buffalos who insist upon telling us that there is no scarcity of water here or in the Mexican Delta. Leave the sprinklered green lawns outside the Aspen conferences, come with me, and I’ll show you a Colorado River running dry from its headwaters to the sea. It is polluted and compromised by industry and agriculture. It is overallocated, drought stricken, and soon to suffer greatly from population growth. If other leaders in our administration continue the whitewash, the scarcity of knowledge and lack of conservation measures will cripple a western civilization built upon water. “You can either do it in crisis mode,” Pat Mulroy said at this conference, “or you can start educating now.”

People need to wake up because we have some very serious water issues in this country.

In the heartland of America, farmers pump water from a massive underground lake known as the Ogallala Aquifer to irrigate their fields.

The problem is that the Ogallala Aquifer is rapidly being pumped dry.

According to the U.S. Geological Survey, “a volume equivalent to two-thirds of the water in Lake Erie” has been permanently drained from the Ogallala Aquifer since 1940.

Once upon a time, the Ogallala Aquifer had an average depth of about 240 feet.

Today, the average depth of the Ogallala Aquifer is just 80 feet, and in some parts of Texas the water is totally gone.

Right now, the Ogallala Aquifer is being drained at a rate of approximately 800 gallons per minute.

Once that water is gone it will not be replaced.

So what will the “breadbasket of America” do then?

Most Americans do not realize this, but we are facing some major, major water problems.

Let us pray that this current drought ends and let us pray that everyone around the world will have enough to eat.

But even if we get through this year okay by some miracle, that doesn’t mean that our problems are over.

 

Is The Food We Eat Killing Us?

Are we digging our own graves with our teeth?  Is the food that we eat every day slowly killing us?  When I was growing up, I just assumed that everything in the grocery store was perfectly safe and perfectly healthy.  I just assumed that the government and the big corporations were watching out for us and that they would never allow something harmful to be sold in the stores.  Boy, was I wrong!  Today, the average American diet is extremely unhealthy.  Most of the foods that we all love to eat are absolutely packed with things that will damage our health.  Many of the ingredients that make our foods “taste good” such as fat, salt and sugar can be extremely damaging in large amounts.  On top of that, most processed foods are absolutely loaded with chemicals and preservatives.  The next time you go to the grocery store, just start turning over packages and read the “ingredients” that are being put into our food.  If you have never done this before, you will be absolutely amazed.  In many of our most common foods there are “ingredients” that I cannot even pronounce.  Sadly, most Americans have no idea that eating a steady diet of these processed foods will likely leave them massively overweight, very sick and much closer to death.

Eating healthy takes more time, more effort and more money than eating poorly does.

Unfortunately, most Americans are content to chow down on foods that are quick to make and that taste good.

In particular, Americans are absolutely addicted to foods that are loaded with sugar and high fructose corn syrup.

When you start looking at food product labels, you will find that either sugar or high fructose corn syrup is in almost everything.

For example, I was absolutely amazed when I learned that most bread sold in our grocery stores contains high fructose corn syrup.

Why in the world would they need to put that into our bread?

Today, Americans are consuming far more sugar and high fructose corn syrup than ever before, and this has many health professionals very alarmed.  The following is an excerpt from an article on the website of the Mayo Clinic….

Some research studies have linked consumption of large amounts of any type of added sugar — not just high-fructose corn syrup — to such health problems as weight gain, dental cavities, poor nutrition, and increased triglyceride levels, which can boost your heart attack risk.

But it is not just sweeteners that are a concern.

There are great concerns about much of the meat that we eat as well.

Today, we grow animals much larger than we used to, but it comes at a price.

For example, we pump our cows full of growth hormones and they stand around in piles of their own manure until it is time for them to die.

If many Americans were aware of where the “cheap beef” in their grocery stores really comes from they might just change their eating habits.

Another dramatic change that has happened to our food supply in recent decades has been the rise of genetically modified crops.

In this area, there has been nothing short of a revolution.

In 1996, only about 2% of all soybeans in the United States were genetically modified.  Today, about 90% of all soybeans in the United States are genetically modified.

At this point, approximately 70% of all processed foods in our grocery stores contain at least one ingredient that has been genetically modified.

This is one reason why so many Americans have shifted to an organic diet.  Nobody really knows what the long-term health effects of eating all of this genetically-modified food will be on all of us.

But there are some things that we do know.

For example, if you drink large amounts of soda every day you are going to gain weight and you are likely to damage your health.

Sadly, even though we know this, the average American still consumes over 600 12-ounce servings of soda per year.

Is it any wonder that we have an obesity epidemic in America?

As I wrote about the other day, approximately 36 percent of all Americans are obese.

In fact, the United States has a higher percentage of obese people than any other major industrialized nation does.

All of this obesity helps to explain the dramatic rise that we have seen in diseases such as cancer, heart disease and diabetes in recent years.

Did you know that people living in the United States are three times more likely to have diabetes than people living in the United Kingdom?

It is not a mystery why this is happening.

It is because of our unhealthy diets.

The food we eat is killing us.

We are a nation that is becoming a little less healthy every single day, and this is causing healthcare costs to completely spiral out of control.

According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980.  Today they account for approximately 16.3%.

That is an incredible rise.

And health care costs have been rising much faster than the overall rate of inflation.

For example, health insurance premiums have risen three times faster than wages have in the United States over the past decade.

As Americans get sicker, health care will continue to be a “growth industry”.

When we all get sick, what do the doctors do?

They put us all on prescription drugs.

According to the CDC, the percentage of Americans that report that they have taken at least one prescription drug within the last 30 days has risen to almost 50 percent.

In fact, 31 percent of Americans say that they have taken at least two prescription drugs within the last 30 days and 11 percent have taken at least five prescription drugs within the last 30 days.

But what happens when you take prescription drugs?

Well, most of them have nasty little side effects that cause even more health problems.

You know, there is something to be said for going back to a much more natural approach to health.  For example, a recent study found that Amish children have very low levels of asthma and allergies.  The following is from a recent Reuters article….

Amish children raised on rural farms in northern Indiana suffer from asthma and allergies less often even than Swiss farm kids, a group known to be relatively free from allergies, according to a new study.

“The rates are very, very low,” said Dr. Mark Holbreich, the study’s lead author. “So there’s something that we feel is even more protective in the Amish” than in European farming communities.

What it is about growing up on farms — and Amish farms in particular — that seems to prevent allergies remains unclear.

Could the Amish teach the rest of us a thing or two about staying healthy?

That is something to think about.

Another aspect of all this is the packaging that our food comes in.

Chemicals from the packaging our food comes in can often get into our food and have serious health effects as an article by Emily Barrett recently described….

Increasingly, evidence shows that the plastics and wrappers used for packaging can inadvertently leach unwanted chemicals into food. Several recent studies found high levels of bisphenol A – an environmental chemical that can disrupt hormonal processes – in canned foods and in packaged foods for people and pets.

Now, another study suggests that the problems go far beyond just one culprit or one health effect. Among the many toxic chemicals that can migrate from packaging into food are the endocrine disrupting phthalates and organotins and the carcinogen benzophenone. These compounds are heavily used in food packaging and have known health effects, yet are not routinely tested or regulated in food, according to the paper’s author Jane Muncke.*

Although some regulations exist to guarantee safe food packaging, the current system does not address concerns posed by endocrine disrupting chemicals, Muncke explains.* The associated health effects of exposure to hormone altering compounds are many and varied, including immune disfunction, metabolic disorders (diabetes, thyroid) and reproductive problems.

But our story is still not over.

After we are done with our food we throw the packaging in the garbage and most Americans never even think about where it eventually ends up.

Unfortunately, much of it ends up out in the ocean.

In the Pacific Ocean today, there is a toxic stew of plastic and garbage about twice the size of the continental United States that is known as the “Great Pacific Garbage Patch“.

According to a BBC report, there are now 100 times more small plastic fragments in the northeast Pacific Ocean than 40 years ago.

But most of us never even stop and think about how the food we eat is destroying our bodies and the world around us.

Most of us just go through our daily lives assuming that somehow everything is going to be okay.

But the truth is that our food is causing major problems.

Sadly, with each passing year the federal government and the big corporations get even more control over our system of food distribution.

Hopefully more Americans will wake up and will start rejecting the “food” that the system wants to cram down our throats.

We all need to start making better choices.

Growing a garden, eating organic foods and supporting local farmers are some good places to start.

The Economic Collapse