Jim Rogers calls a next bubble in food again

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

http://www.businessweek.com/news/201...-on-fruit.html

U.S. Food-Inflation Forecast Raised to 3.5%-4.5% on Fruit

Oct. 25 (Bloomberg) -- U.S. food prices will rise more than forecast last month, at the fastest pace since 2008, mostly because of a revised increase in the cost of fruit, the government said.

Consumers will pay 3.5 percent to 4.5 percent more for food this year than in 2010, up from a September forecast of 3 percent to 4 percent, the U.S. Department of Agriculture said today in a monthly report. The increase was the first by the USDA since February. Fresh-fruit prices will advance 3 percent to 4 percent, gaining a full percentage point from last month’s forecast.

“Cost pressures on wholesale- and retail-food prices due to higher food-commodity and energy prices, along with strengthening global food demand, have pushed inflation projections upward for 2011,” Richard Volpe, a USDA food- inflation economist, wrote in a note accompanying the report.

*snip*

[Kadriana]

Re: Jim Rodgers calls the next bubble - Food

we need to produce far MORE food than what we need to feed ourselves, as we need to export that food. I believe that as the world gets closer to the climax of Peak (cheap) Oil, the idea that "food is fuel, fuel is food" becomes more relevant, and we as a nation will either be pressed more to use food as fuel, or we will be forced to trade more food for fuel.

I think we'll turn to man power to produce more food. I think as food costs rise, it makes more sense for people grow more of their own or become small, organic farmers. Something similar to Victory Gardens during WW2. There will have to be a shift in thinking. Instead of people using their Saturday mornings to run their lawnmowers and apply fertilizer on their fields, they pull a few weeds from their raised beds. We would have to change our eating habits too. I think with aquaponics, you can grow 1 lb. of fish per 1 gallon of water. I've read about people feeding their fish duckweed, red worms and lettuce so they didn't have to buy commercial fish food. You then use the fish water to fertilize the plants. If you set the system up in a greenhouse, you don't need grow lights and depending on the fish you use, you won't need to use any sort of heating system. You would just need power to run the pump. You can produce a lot of food in a small area but right now, it doesn't make financial sense on a commercial scale.

We're lucky in this country that we have plenty of land to grow food. New York would be tough except for patio and roof top gardens but I use to live in LA and most people out there have a small plot they mow every week. Americans are just going to have to move away from a diet so high in processed grains and factory farmed meat. Of course knowing this country, it will take a couple years of suffering before they change.

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

I think we'll turn to man power to produce more food. I think as food costs rise, it makes more sense for people grow more of their own or become small, organic farmers. Something similar to Victory Gardens during WW2. There will have to be a shift in thinking. Instead of people using their Saturday mornings to run their lawnmowers and apply fertilizer on their fields, they pull a few weeds from their raised beds. We would have to change our eating habits too. I think with aquaponics, you can grow 1 lb. of fish per 1 gallon of water. I've read about people feeding their fish duckweed, red worms and lettuce so they didn't have to buy commercial fish food. You then use the fish water to fertilize the plants. If you set the system up in a greenhouse, you don't need grow lights and depending on the fish you use, you won't need to use any sort of heating system. You would just need power to run the pump. You can produce a lot of food in a small area but right now, it doesn't make financial sense on a commercial scale.

We're lucky in this country that we have plenty of land to grow food. New York would be tough except for patio and roof top gardens but I use to live in LA and most people out there have a small plot they mow every week. Americans are just going to have to move away from a diet so high in processed grains and factory farmed meat. Of course knowing this country, it will take a couple years of suffering before they change.

The theory with "local organic" is that small farmers can make a living growing food in small plots for a few direct customers.

The reality is most people simply don't have the extra cash to pay so much for food,

The net result is more likely large 'organic' operations supplying a hi priced product for the wealthier demographic.

The net effect, however, is a reduction in overall volume of production. Take a look at the artificial supply reduction article.

[BK]

Re: Jim Rodgers calls the next bubble - Food

Massive growth in backyard gardens sounds quaint, but during the years of cheap Oil we have changed our eating habits. The olden days root vegetables were very common stable of life in places like the Northeast of the USA.

But, cheap oil has drastically changed the diet of the average American away from root vegetables (that are very easy to store) to more perishable food. Combine this with the need for Americans to re-adopt canning food and other home-work that is required to make Organic back yard farming useful. Organic gardening can't have a dramatic effect in supplying food until we switch back to foods that can be stored in Root cellars - back to the future.

[Kadriana]

Re: Jim Rodgers calls the next bubble - Food

Massive growth in backyard gardens sounds quaint, but during the years of cheap Oil we have changed our eating habits. The olden days root vegetables were very common stable of life in places like the Northeast of the USA.

But, cheap oil has drastically changed the diet of the average American away from root vegetables (that are very easy to store) to more perishable food. Combine this with the need for Americans to re-adopt canning food and other home-work that is required to make Organic back yard farming useful. Organic gardening can't have a dramatic effect in supplying food until we switch back to foods that can be stored in Root cellars - back to the future.

I think it's going to be a slow shift but I already see it happening in my area. My church has canning parties. I see a lot more people starting gardens for the first time. My mother's church started a farmer's market a couple years ago. Certified organic food is expensive but a lot of road side stands are cheap. I have half a cow in my freezer that I paid $2.40 a lb for including steaks. Half a pig cost me $1.30 a lb. including 6 lbs. of smoked bacon and bunch of kielbasa. I raise my chickens which probably eat 1/5 of the chicken feed of factory farmed chickens since they eat a lot weeds, insects and meals my kids don't finish.

Baby Boomers might have a hard time adjusting but I find a lot of people my age and younger, I'm 34, are showing an interest in some of these older techniques. Part of it is nostalgia and found memories of our grandparents. Part of it is probably pure pessimism and feeling like we have no other choice than to adjust our lifestyles.

[lakedaemonian]

Re: Jim Rodgers calls the next bubble - Food

I think it's going to be a slow shift but I already see it happening in my area. My church has canning parties. I see a lot more people starting gardens for the first time. My mother's church started a farmer's market a couple years ago. Certified organic food is expensive but a lot of road side stands are cheap. I have half a cow in my freezer that I paid $2.40 a lb for including steaks. Half a pig cost me $1.30 a lb. including 6 lbs. of smoked bacon and bunch of kielbasa. I raise my chickens which probably eat 1/5 of the chicken feed of factory farmed chickens since they eat a lot weeds, insects and meals my kids don't finish.

Baby Boomers might have a hard time adjusting but I find a lot of people my age and younger, I'm 34, are showing an interest in some of these older techniques. Part of it is nostalgia and found memories of our grandparents. Part of it is probably pure pessimism and feeling like we have no other choice than to adjust our lifestyles.

I'd agree.....

For my family we are doing it more for the lifestyle choice of trying to better look after ourselves(and what we put IN ourselves) and setting a good example for our kids.

Some of the things we do with our gardening/chickens don't always make the most financial sense(in terms of time/effort /money put into it) but we enjoy the perceived independence/self reliance we achieve.

I do a lot of hunting and some fishing...it's nice to have my wife jokingly let me know "the great white hunter" needs to do some more hunting when the deep freezer gets empty....better that than upset that I'm going out hunting now and again!

Homekill animals.....they make a LOT of sense if folks have the freezer capacity.

I learned a lot about homekill butchering in the past year(although I'm not legally qualified to do homekill) in preparation for teaching some related course lessons...VERY interesting stuff....even after butchering my own game meat over the years, I really learned heaps.

Roadside fruit and veggie sales are great...especially when it's a "vertically integrated" one...grower/seller/homeowner on the side of the road with an unattended stall/honor box for sales.

I'd agree on the age thing.....folks up to their early 40's will probably find it easier....since it can be a bit labour intensive at times.

My favorite is avacado season(which we are in now) they are practically FREE.....so we buy in bulk, eat heaps and process/freeze a bunch with some lemon for over winter.

Same with Strawberry season.....super cheap and easy to clean/bag/freeze.

As far as the certified organic stuff goes...we don't touch it....but we do like local "near organic" or "organic-ish" stuff from local trusted growers/sellers.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

http://www.zerohedge.com/news/commod...y-food-thought

Commodity Inflation And Spare Capacity: Food For Thought





Submitted by Tyler Durden on 11/29/2011 23:50 -0500

• BLS
• Bureau of Labor Statistics
• Personal Consumption
• Stagflation
• Unemployment

The '-flations' are as much part of the commonplace parlance for every sell-side strategist, talking-head, and gold-bug as dividend-stock, quality balance sheet, and long-time-horizon is for long-only managers. Whether deflation, stagflation, inflation, disinflation, or reflation, they all have their moments of sublime glory. Bank of America's Economics team have found some extremely timely 'inflation' signs in the food industry, where it is becoming, somewhat incredibly in this age of supposed frugality and deleveraging, cheaper to eat-out than to cook-at-home. This price disequilibrium has seen consumers respond accordingly; spending on food away from home has picked up while spending on food at home has slowed and also very notably households spending the marginal unit of 'time' working as opposed to 'eating' as economic frailties continue.

BAML- US Macro Watch: Food for thought

When it becomes frugal to eat out

One of the most basic tenets in economics is the law of demand; consumers will buy more of a good when its price decreases and less when its price increases. This is becoming increasingly evident in the food industry. It is becoming cheaper, on a relative basis, for consumers to dine out than to buy their own groceries and cook at home. Consumers have responded accordingly; spending on food away from home has picked up while spending on food at home has slowed.




Prices at the grocer rising faster than restaurants

Chart 1 tells a compelling tale. According to the Bureau of Labor Statistics (BLS), prices for food at home (grocers) are advancing over 6% per year. That is roughly two-and-a-half times faster than prices for food away from home (restaurants). While this data may not line-up with what you hear from the industry, our point here is more on direction of the series. Notice that food at home is more volatile than price movements in the food away from home category. Why the divergence? Grocers tend to be more sensitive to raw commodity prices. Recall the underlying premise of our inflation forecast: spare capacity, particularly in the labor market, will constrain inflation.

Restaurants offset commodity pressures through wages

Restaurants tend to have a stronger labor component in the end-cost of goods sold than grocers. With the youth unemployment rate at 24%, restaurants are better positioned to offset higher food prices by paying workers less. Moreover, for many workers in the restaurant industry customer tips comprise a major portion of earnings. For the average grocer, end consumer costs tend to be more sensitive to raw food prices. Workers in grocery stores are also more likely to be unionized, limiting the ability of grocers to offset higher food prices through wages.





Opportunity cost to go to the grocer is rising

One additional point to consider is the opportunity cost to households. In this weak economic environment, if afforded an extra hour of time, a household will be more likely to work in that hour than spend that time going to the grocery store and preparing food. Again, this implies a relative shift, substituting away from grocery stores into restaurants.

Spending up at restaurants, down at grocers

With prices at restaurants rising more slowly than grocers, consumers have responded in-kind. Chart 2 illustrates this relative consumption shift. The result is predictable but telling. As a share of total personal consumption expenditures, spending at restaurants has been rising steadily since mid-2009. For grocers, on the other hand, this share has been essentially flat.

We can only hope that the S.N.A.P. (food stamp program) will be accepted at Masa, Jean Georges, and Daniel very soon. Though with all the extra marginal hours we will be spending working, perhaps the marginal utility of food (or true consumption) will drop to zero?

[lektrode]

Re: Jim Rodgers calls the next bubble - Food

... cheaper to eat-out than to cook-at-home....

We can only hope that the S.N.A.P. (food stamp program) will be accepted at Masa, Jean Georges, and Daniel very soon. Though with all the extra marginal hours we will be spending working, perhaps the marginal utility of food (or true consumption) will drop to zero?

yeah huh?
soon as morton's, ruths chris and maybe game creek @vail start accepting EBT, i'm signin up!

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

yeah huh?
soon as morton's, ruths chris and maybe game creek @vail start accepting EBT, i'm signin up!

if you took a trip in the WayBack Machine to the early days of the last century, well before the advent of "processed foods", either mom, or the hired help, would spend most of the day in the kitchen cooking (with breaks for some laundry) just to get dinner on the table. Now in a time pressed world, where many work two jobs, eating on the run for a "quickie" is the way to go.

I happen to like mexican food, and if I am not near a real taco wagon, Taco Bell will do in a pinch. For about $7 I can get a meal that will cover me for hours. At the store I might spend half of that, but... I will spend most of 20-30 mintes putting it all together. If time is precious to me, that extra $3-4 is worth every penny. It may not be Ruth's Chris, but it hits the spot.

Now add in buk purchasing power of chains like MickeyD's, and and a little bit of c1ue's favorite food additive cellulose, and these places still make a profit.

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

I happen to like mexican food, and if I am not near a real taco wagon, Taco Bell will do in a pinch. For about $7 I can get a meal that will cover me for hours. At the store I might spend half of that, but... I will spend most of 20-30 mintes putting it all together. If time is precious to me, that extra $3-4 is worth every penny. It may not be Ruth's Chris, but it hits the spot.

Given that Taco Bell comprises only 2.6% of the entire fast food market, and the 'meal deals' in most other fast food places are a far higher cost, your conclusion is far from obvious. (source: http://www.anderson.ucla.edu/x30434.xml)

Fast food itself is less than 45% of the overall 'dine out' market, so again the conclusions drawn from personal anecdote is far from obviously correct.

Lastly, just how much would the Taco Bell meal cost you to make at home? and how much time?

Mexican food is very quick and easy to make given access to ingredients; boiling up a batch of seasoned ground beef or grilling chicken, throwing onto tortillas, and garnishing is hardly equivalent to making Peking Duck.

What is far more likely is that the 1% are blowing so much money eating out that they eclipse what the 99% are spending less on. In San Francisco and Las Vegas, the highest end restaurants are packed while the mid-level restaurants are dropping like flies. Some of the low level are surviving, many others are not.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

simple anecdotal examples are lost in your world...

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

simple anecdotal examples are lost in your world...

Yes, especially when they're accompanied by a not particularly convincing argument.

For that matter, escalating fast food prices themselves could well be the reason for the 'increase'.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

[c1ue]

Re: Jim Rodgers calls the next bubble - Food

When you're a hammer, all problems are nails.

[doom&gloom]

Re: Jim Rodgers calls the next bubble - Food

When you're a hammer, all problems are nails.

yes, i HAVE noticed that about you.