Americans hoard food as industry seeks regs http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080423/BUSINESS/868303815/1001 Americans hoard food as industry seeks regs By Patrice Hill April 23, 2008 <form name="pictureform" action="/apps/pbcs.dll/misc?url=/templates/zoom.pbs&Site=WT&Date=20080423&Category=BUSINESS&ArtNo=868303815&Ref=AR&Profile=1001" method="post" target="_blank"><input value="A farmer harvests his corn crop near Morris, Ill." name="photocaption" type="hidden"> </form> A farmer harvests his corn crop near Morris, Ill. <hr> Farmers and food executives appealed fruitlessly to federal officials yesterday for regulatory steps to limit speculative buying that is helping to drive food prices higher. Meanwhile, some Americans are stocking up on staples such as rice, flour and oil in anticipation of high prices and shortages spreading from overseas. Their pleas did not find a sympathetic audience at the Commodity Futures Trading Commission (CFTC), where regulators said high prices are mostly the result of soaring world demand for grains combined with high fuel prices and drought-induced shortages in many countries. The regulatory clash came amid evidence that a rash of headlines in recent weeks about food riots around the world has prompted some in the United States to stock up on staples. Costco and other grocery stores in California reported a run on rice, which has forced them to set limits on how many sacks of rice each customer can buy. Filipinos in Canada are scooping up all the rice they can find and shipping it to relatives in the Philippines, which is suffering a severe shortage that is leaving many people hungry. While farmers here and abroad generally are benefiting from the high prices, even they have been burned by a tidal wave of investors and speculators pouring into the futures markets for corn, wheat, rice and other commodities and who are driving up prices in a way that makes it difficult for farmers to run their businesses. "Something is wrong," said National Farmers Union President Tom Buis, adding that the CFTC's refusal to rein in speculators will force farmers and consumers to take their case to Congress. "It may warrant congressional intervention," he said. "The public is all too aware of the recent credit crisis on Wall Street. We don't want a lack of oversight and regulation to lead to a similar crisis in rural America." Food economists testifying at a daylong hearing of the commission said the doubling of rice and wheat prices in the past year is a result of strong income growth in China, India and other Asian countries, where people entering the middle class are buying more food and eating more meat. Farm animals consume a substantial share of the world's grain. <script language="javascript" type="text/javascript"> function doparagraph(){ htmlInDiv = document.getElementById("twt-vs-8-1").innerHTML; dataToInsert = 'Page 1 of 2 next |'; newDiv = dataToInsert + htmlInDiv; document.getElementById("twt-vs-8-1").innerHTML = newDiv; } doparagraph(); </script> U.S. wheat stocks are at the lowest levels in 60 years because worldwide consumption of wheat has exceeded production in six of the past eight years, said U.S. Agriculture Department chief economist Gerald Bange. Adding to tight supplies was the back-to-back failure of two years of wheat crops caused by drought in Australia, a major wheat exporter, he said. In addition, the diversion of one-third of the U.S. corn crop into making ethanol for vehicles has increased prices for corn and other staples such as soybeans and cotton as more acreage is set aside for ethanol production. Farmers also have raised prices because they have been hard hit by spiraling energy costs, which not only raised the price of diesel fuel to records of over $4 a gallon but drove up the cost of nitrogen fertilizer, which is made from natural gas. "Commodity prices across the board are at levels not experienced in many of our lifetimes," said CFTC Chairman Walter Lukken. "These price levels, along with record energy costs, have put a strain on consumers as well as many producers and commercial participants that utilize the futures markets to manage risks." The upswing in prices has been exaggerated by the massive influx of investors and speculators seeking to profit from rising prices for corn, wheat, oil, gold and other commodities. Big Wall Street firms and hedge funds have taken huge positions in futures markets that once were dominated by relatively small operators such as farmers and grain-elevator owners. Small investors, who see fast-rising commodities as good hedges against inflation and a falling dollar, also are getting a piece of the action by investing in index funds that are tied to commodity prices. "During such turbulent times, it is tempting to shoot first and ask questions later," Mr. Lukken said, but he contended the commission should be "cautious" about doing anything to curb speculation. He and other regulators argued that speculators add volume and liquidity to the markets, which makes them operate more efficiently and helps farmers and other players. Commissioner Michael V. Dunn said the soaring demand for food and fuel worldwide might be leading to permanently higher food prices, both domestically and abroad. "We may already be working under or fast approaching a new paradigm of higher agricultural prices," he said. "There is not a silver bullet or single solution to address the problems we are currently facing." FARM TRADE Federal market regulators say the soaring price of most commodities over the past year reflects increased demand rather than investor speculation. Rice 122% Wheat* 95 Soybeans 83 Crude oil 82 Corn 66 Gasoline 41 Gold 37 Sugar 30 Coffee 24 Milk 5 Live cattle -7 Lumber -14 * On the Chicago Board of Trade Source: Commodity Futures Trading Commission
Seeking congressional intervention......guess the stocking up on amo will be a priority too then since I tend to be the one to bite the dogs if they get to close to my plate, dont reckon to be real nice if some idiot thinks he's gonna clear out my pantry and they aint starting off as my best friends.
