Food Prices Around the World Soar, But Inflation Remains…Incredibly Low?
Food price indexes over the past rolling 12-months have been reported increasing at a healthy 4% clip, but US government and banking officials have still been reported 12-month rolling “official” inflation rates in the US at a comical and lowly 1.4%. To refresh our memories, this is what happened with soaring food prices in 2010. Paul Risley, the United Nations World Food Program’s spokesman in Asia, reported that some of the 28 million “poorest of the poor” it fed could go hungry because the agency couldn’t afford to buy many of the world’s staple grains. In 2010, corn, the staple food of Central America and Mexico, also soared in price, and the US Department of Agriculture, revised its forecast for the US corn crop yield downwards by 12.6 million tonnes, or 3.9%, to 321.7 million tonnes. According to CBH Group’s wheat trading manager, Chris Brown, the USDA’s revision at that time was the largest monthly revision for corn crop supplies ever at that time. “Never before has the USDA moved the corn yield down by such an amount,” Mr. Brown said. Prices remained elevated for food in 2010 and in the years ahead but then plummeted back to normalcy in around 2013.
Fast forward to 2021 and food prices are starting to soar again. Within the past year, my patrons know that I advocated the purchase of the soybean ETF: SOYB back in August of 2020 when soybeans were still selling at about $8.50 a bushel to take advantage of coming soaring soybean prices, the reasons for which I had built the case for several months prior. Since then, in six months, soybean prices have soared to over $14 a bushel, and my suggested purchase back then of the Teucrium Soybean Fund (NYSE: SOYB) has soared more than 50% in price…
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