What's The Deal With All This Rice And Flour Hoarding?

This week saw major retailers restricting commodity sales as supply lines crumpled in the face of rising demand. The Chicago Tribune warns that bakers are running low on rye flour, and the Wall Street Journal suggests “it’s time for Americans to start stockpiling food.” So what the hell is going on and how does it affect you?

The week of rationing was caused by demographics ganging up with bad public policy. China and India, with their billion-strong populations, want to eat real food, boosting demand just as supplies are diminishing. Tack on the price of oil, rising like a lost balloon, coupled with the government-induced ethanol high our farmers are enjoying, and you have yourself a mess.

The market processed all this data last week and had itself a conniption. Not “the market” as comprised of Lamborghini-driving Wall Street types, but the purer market made up of individuals acting to protect their economic interests.

Commercial bakers say they are stocking up on specialty rye and gluten flour because of fear that supplies are dwindling. And Costco’s chief executive said the big-box retailer is thinking twice about letting customers buy multiple pallets of flour to preserve supplies.

Restaurants and other large-scale customers appear to be buying so much rice that Costco, Sam’s Club and other wholesalers have put limits on the amounts they sell, leading some consumers to stock up. This has resulted in some individual stores in places like California reportedly running out of rice.

This isn’t Joe consumer doing the stockpiling, unless Joe consumer owns a bakery and an Indian restaurant. People are looking at supply chains and prices and independently determining that now is the time to stockpile because things are going to get worse, not better.

So what should you do? The New York Times offers anecdotal proof that you already know how to react:

Burt Flickinger, a longtime retail consultant, said the last time he saw such significant changes in consumer buying patterns was the late 1970s, when runaway inflation prompted Americans to “switch from red meat to pork to poultry to pasta — then to peanut butter and jelly.”

“It hasn’t gotten to human food mixed with pet food yet,” he said, “but it is certainly headed in that direction.”

[...]

Wal-Mart Stores reports stronger-than-usual sales of peanut butter and spaghetti, while restaurants like Domino’s Pizza and Ruby Tuesday have suffered a falloff in orders, suggesting that many Americans are sticking to low-cost home-cooked meals.

Over the last year, purchases of brand name cookies and crackers have fallen, according to Information Resources, which tracks retail sales.

The Wall Street Journal, that towel of smiles, boils down the essentials of surviving rising food prices and a Soviet/Sino attack:

You can’t easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.

Have you changed your buying patterns yet? Tell us in the comments.

What’s going on with rice and flour? [Chicago Tribune]
Load Up the Pantry [WSJ]
Recession Diet Just One Way to Tighten Belt [NYT]
(AP Photo Antonio Romero)

Comments

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  1. HungryGrrl says:

    My grocery list is reflecting this image. Since I’ve commited to buying only organic meat yet can no longer afford to eat it daily because of rising food prices and the ever growing chunk of my budget dedicated to buying gas for my car to commute to work (and don’t diss my car- it gets 31 mpg), I’ve been eating a hell of a lot more vegetarian meals lately. Bring on the spinich ravioli…. noodles with peanut sauce… and refried bean/cheese quesadillas.

  2. HungryGrrl says:

    ha, the new ‘image’ thing is messing with my mind. I meant “…reflecting this trend…” of course.

  3. Shappie says:

    I absolutely have changed my eating habits. Since gas is costing me $3.44 here in Des Moines, Iowa, eating out just isn’t an option that much anymore.

    Dollar pizzas, Ramen noodles, and store bought meat are just as good as Dominos, Chinese takeout, and that pricy steak on the menu.

  4. sponica says:

    I have ALWAYS stocked up on non-perishables because my mom did the same. She had a huge pantry, why not fill it with soups and pasta when they were on sale? She jokes that if nuclear war came, she would survive because she has oodles of food in her house.

  5. Manok says:

    as long as coors light and peanut butter and jelly stay in stock, im fine.

  6. Question: wouldn’t everyone stockpiling food exacerbate the problem?

  7. humphrmi says:

    My grocery bills have gone through the roof, but it’s not primarily grains that have increased (nor have I seen a shortage); it’s meat. I’m already screwed because I keep Kosher; the prices of Kosher meat is soaring lately.

    Milk? We’re paying about the same today as we were paying last year, around two to three bucks a gallon, depending on sales. I’ve heard stories about $4 milk but I haven’t seen it yet.

    I always keep a good supply of canned foods on-hand anyway; good in emergencies and when we don’t use them we give them to food pantries. I’m not sure that I need to start stocking up on it yet, as I haven’t seen any shortages or huge spikes in prices of those items yet.

  8. trillium says:

    I’ve made the shift away from organic. Was trying to live the healthier “green” lifestyle as well, but all I’ve ended up doing is going back to farm raised. $1/lb for chicken of unknown origin or +3$/lb for free range? .. Give me a break, I’m going to go cheaper to feed my family even if it means backing out of the Earth centric attitude I’ve tried to adhere to.

  9. nardo218 says:

    @sponica: Hah, my mom too. My friends called our laundry room “the bomb shelter.”

  10. jpx72x says:

    @ceejeemcbeegee: Only in the short term. Then in the mid term, prices will drop because much of the demand from then is being met now. Then everything should even out.

  11. dakotad555 says:

    Everyone should simply move away from urban areas where land is cheap, buy themselves several chickens, a cow, a couple goats (for company) and then plant a 2 acre garden using heirloom seeds so that the plants reproduce. We can live off the fat of the land, and guarantee ourselves that our food is organic.

    Or, we could genetically modify chickens so that they are beakless, massive chested, and grow rapidly. Pump in some chemicals to make them even tastier, and the capacity to lay ten eggs a day, and problem solved.

    These are the only two solutions to our catastrophic food shortage.

    Aside: are double-cheeseburgers still $1.00 at McDonalds?

  12. Shinzou says:

    The cheeseburgers still are here in Missouri, depending on where you go.

  13. FF_Mac says:

    @humphrmi: Will you send me some $2 per gallon milk? All I can find is $3.98 milk this afternoon.

  14. JollyJumjuck says:

    Americans still pay comparably less for food than most other countries. Here in Ontario, Canada, for example, milk has been well over $4 per gallon (4 liters) for more than a couple of years, and you’re lucky if you can get the “chicken of unknown origin” for $3/lb (thighs/drumsticks). The only thing that appears cheaper is cereal, though I only have Florida as a comparison. McDonald’s and other fast food is still about 40% more expensive even though our currency is about equal.

  15. juri squared says:

    I’ve said it before and I’ll say it again: Aldi is your best friend (or another generic/clearance grocer in your area).

    I can buy about 80% of my groceries there for half the money I spend at, say, Dominick’s. Trying out their off-brand products can be hit (chicken patties) or miss (pizza rolls), but it’s hard to mess up generic canned goods, cereal, and dairy.

    As for milk, I keep an eye out on the quantity discount sales, where 2 gallons are about 40% off. My family can go through it fast enough to make it worth my while.

  16. juri squared says:

    Oh, speaking of pizza rolls, I’ve stopped buying stuff like that. It’s expensive and bad for me anyways.

  17. humphrmi says:

    @FF_Mac: I keep hearing about near-$4 milk, where are you geographically? I buy mine a a Jewel (AKA Albertsons) in Skokie, IL and I haven’t paid more than $3, and every couple weeks they put it on sale for $2, limit 2.

  18. sxs3200 says:

    rearranging deckchairs on the titanic…
    doesn’t matter what I do, she’s gonna keep on sinking…
    rearranging deckchairs on the titanic…
    I realize now, my time was better spent drinking…

  19. kyle4 says:

    I remember one commenter saying, “Actually, buying more would do the opposite and make the cost go up since it would now be in even greater demand.” That makes perfect sense, if only consumers had that sense as well.

  20. EBounding says:

    I think the retailers are rationing just to get more people into the store. They could just raise their prices and that would be an efficient way at controlling the supply. But by rationing and stirring up the hype, you’ll get a lot more traffic into your stores since people will be in a panic.

  21. ChuckECheese says:

    @humphrmi: Your grocery must be keeping cows in the back, munching on the discarded produce. It fluctuates right around $4 a gal here, about $2.30 for a half-gal, at Wal-Mart ($3 for 1/2 gal of organic). At the local Albertoid’s, it’s about $5/gal, and $3 for a half-gal. They charge $4.50 for a half-gal of organic milk.

  22. maztec says:

    This is just crack to up profits. Screw it. If it gets bad enough, I’ll just eat more from my garden or make it bigger.

  23. karmaghost says:

    I know that, for some people, this is a controversial thing to say, but promoting Ethanol as an alternative fuel is one of the worst things that has happened to the American people in recent years. What you have is thousands of farmers switching over to corn for simply selling it to be converted to the fuel (which is more expensive and less fuel efficient than gasoline, BTW). So even though you have many, many corn growers, prices have gone up because incredible amounts are being used for non-food products. Then, you have wheat, grain, and other farmers who have changed over to corn for Ethanol, so prices of those products have gone up as well.

    Ethanol is a terrible solution to our dependence on over-seas oil. I would argue that, in a “two-situation” scenario, we’re better off relying on Middle East oil than promoting/giving incentives for producing our own ethanol.

  24. TechnoDestructo says:

    @ceejeemcbeegee:

    Temporarily, yes, but eventually when hardly anyone is actually buying during times of low supply, it would smooth things out.

    @karmaghost:

    Yeah, it is kind of a half-assed solution when you’re still wasting most of the plant.

  25. humphrmi says:

    According to this:

    [money.cnn.com]

    Milk prices are going to moderate or even go down somewhat this year.

  26. deedrit says:

    *loads shotgun*

    Shhhh, I’m hunting wabbit.

  27. Falconfire says:

    @Manok: Guess you missed the hops shortage huh?

    Beer is set to rise significantly in the next 2 years due to a terrible crop the last two years.

  28. nyaz says:

    Well wheat futures are crazy at the moment, we should be feeling that sometime this summer. There was a run on butter in Japan, so i wonder when that will hit us. This is definately dark times indeed, at least foreboading.

  29. humphrmi says:

    @deedrit: It is once again safe to eat the squirrels:

    [www.nydailynews.com]

  30. ShariC says:

    I wonder if all of this scare-mongering isn’t a slick way of stimulating the economy at a time when people are trying to cut back on consumption. You can’t get them to run out and buy new cars, computers, or iPods, but you can frighten them into buying tons of food they will likely end up throwing away when it all blows over.

    Also, the writer of one of Wall Street Journal article is an investor in Quaker (maker of such products as Quaker Oats).

  31. humphrmi says:

    @nyaz:

    There was a run on butter

    As an Economics major, I have to say LOL – If it ends up being a global run on butter, then global spending on guns will decrease, and we’ll have fewer wars.

  32. ShariC says:

    @nyaz:
    The funny thing is that the “run on butter” in Japan hasn’t troubled anyone much at all. Most people don’t care and just eat margarine. Americans are panicking much harder because they aren’t used to higher food prices like other developed countries.

  33. failurate says:

    @ShariC: @humphrmi: But unsafe to make margaritas?

  34. marsneedsrabbits says:

    We don’t consume much in the way of wheat due to a member of the family (me) having Celiac disease. I cook, so if I don’t eat it, I probably don’t make it. I buy PopTarts and occasionally breakfast cereal once in a while for the kids, but that’s pretty much it.

    When I went to the Korean market yesterday to buy rice in bulk, the counter guy told me that they were limiting the rice bags to 2-20 pound bags per person. They were nearly out on a day that they should have had stacks and stacks.

    I didn’t care because even though we almost certainly eat more rice than the average family, it takes a while to go through 40 pounds and all this silliness should be over by then.

    Then I noticed something odd: while the 20 and 50 pound bags were gone or down to a very few, the 1, 2, & 5 pound bags were stocked on the shelves.

    People have been reading the news, seeing the story we’ve all seen about the Costco in Mountainview, CA running out of bulk rice, deciding that they need bulk rice, are driving to the store to buy it, and are avoiding smaller packages. Why? Because they think they need bulk rice because the paper says so, not because they actually “need” rice at all.

    The same thing had happened at the grocery store later. Large bags gone, small bags were just sitting there.

    As for our eating/buying habits, they haven’t really changed at all because pretty much everything is already from scratch because of the Celiac. I am trying to get more from Costco, but that’s because the Costco is new to our area. I buy the same stuff in the same amounts.

    I know for my non-Celiac friends, they are eating out less, baking some more (as much as work allows), and buying less junky stuff.

  35. hmk says:

    We are buying our food like normal. We’ve been trying to eat healthier, so our food costs have modestly increased, but on the regular things we buy, it seems just about the same. I only purchase things when they are on sale, I’ll hit up Sam’s Club once in a while, and I go to the local market for meat and produce. Like normal.

    I feel like I’m the only person I know who lives well below her means, and therefore doesn’t feel the crunch like everyone else.

  36. clevernels says:

    It seems an awful lot like this is a scare tactic to stimulate the economy, but it is an absolutely true thing to say that ethanol is one of the worst things to happen to the American people. Not just in it lower efficiency/lower energy content, but in terms of feeding our food to cars. The global per capita irrigated cropland is something like .57 acres, and yet to grow the corn needed to fuel an SUV for a year would take something like 11 acres. (Gunkel, Darrin. “Ethanol can replace gasoline”. Current Controversies: Alternative Energy Sources). Add to that the growing world population and you have a lot of hungry people.

  37. nodoubtavril says:

    Well, i live with my parents (I’m 19) and they do all the food shopping.

    They come home with 100 calorie snack packages and regular sized cereal boxes and small meats. Everything is small and expensive.

    I BEG them to go to an ALDI or a BULK store to buy everything. I’ve done the math, and it’s clear, there is no denying that bulk is better. i have showed them they can cut their monthly food bill in half. But my mom is afraid to buy large food because “they go stale”….buy some premium airtight containers and they will pay for themselves.

    I give 80% of my paychecks to my parents to help out. But i think i am going to stop giving them money if they insist on wasting it.

  38. What the hell is a ‘run on butter?’ Is it like a run-on sentence? C’mon now, lets be serious folks, settle down.

    Am I the only one who thinks that the root of all these problems is that there are simply too many people in the world, growing at an exponentially quicker rate? Surely there has been some studies somewhere that evaluates what the threshold of human population is before this planet’s resources simply cannot sustain it. Are we at that threshold? Even if so, I don’t think you’ll ever hear any politician or policy makers stand up and say “Hey, people. How ’bout you stop having so many kids?” Instead, they’ll regulate the oil and subsidize the food supply until they are blue in the face. I’m not saying we should start putting birth control in the tap water or anything… but… can’t we start putting birth control in the tap water or something?

  39. m.ravian says:

    @LastVigilante: well, i’m not planning on having kids, so i’m doing my part. :)

    i made the decision a few months ago to become a vegetarian (i still eat fish occasionally). this was mostly for environmental reasons, but it’s amazing how much money you save when you don’t buy or eat meat anymore.

  40. StevieD says:

    I smell conspiracy by Walmart.

    See, I was going to spend my Uncle George check on a good hooker and maybe a new 8 track player. 8 Track players are not sold at Walmart and hookes can’t get their Meth at Walmart so Walmart was going to have little to gain from my Uncle George check.

    So Walmart stated talking bad economy in hopes that I would realize the evil ways I was going to spend the Uncle George check and would want to spend my $ on a new big screen TV.

    But that didn’t work.

    All that bad economy talk got me thinking that I should SAVE my Uncle George check.

    Well that sure as hades wasn’t going to stimulate any of my body parts and it sure wasn’t going to do much for anybody but the local bank.

    And Walmart doesn’t get to do banking.

    Now we got this talk about food. I gotta have food. Maybe I will spend my Uncle George check on food.

    And Walmart wins because it is the only F***** grocery store near me.

  41. Concerned_Citizen says:

    How is there a shortage? It’s hard to believe the people of china can pay as much for their bags of flour and rice as Americans. In a time of shortage, those paying less should be hurt first. So I take it this shortage is purely from stores hording, so it is purely artificial?

  42. Manok says:

    these days, I just want to buy a handgun and end it all. were the richest country in the world and we have 4 dollar gas and fake food shortages.

  43. Buran says:

    @humphrmi: I’m in St. Louis, $3.88 for a gal of 2%.

  44. sean.thor says:

    @marsneedsrabbits: Yeah, another fellow Celiac here. I haven’t had trouble finding rice yet (although I’m still working on a giant bag of it) My problem has been with the rising costs of the gluten free food. It was expensive enough to tree and live a normal gluten free life style. Now its getting plain rediculous. I pay $6 for a 10oz box of Brown Rice Cereal. I could go straight rice, meat, fruits, and veggies but thats starting to creep up here too.

  45. FLConsumer says:

    Ruby Tuesday’s noticed a drop-off in sales NOT because of the economy but because they’ve changed their menu and totally overpriced their food. It shouldn’t cost $50+ for food only for two people at a chain restaurant like that. Add in drinks and I’m up to $75 there. For $75, I can have a MUCH more enjoyable meal at a good steakhouse and get real food, real service.

  46. StevieD says:

    @FLConsumer:

    Them steakhouse prices are going to go up as well.

    1) Because RT went up.

    2) The cost of gas/electric to operate the business is going up.

    3) Them there steaks don’t walk themselves to the steakhouse.

    4) The cost of beef is going to go up because of the diversion of corn to ethanol.

  47. ian937262 says:

    @LastVigilante:
    I had to read this before I went to bed. This made my day. I think around the same lines. Seeing people with 8 kids makes me sick and my cynical side jumps right to where you were headed.

  48. TechnoDestructo says:

    @marsneedsrabbits:

    The small bags are still, for the most part, not that great a deal.

    But then….maybe now we’ll see the “larger package, higher unit price” thing and have it make sense.

  49. TechnoDestructo says:

    @humphrmi:

    Alaska had 4 dollar a gallon milk over a decade ago.

  50. TechnoDestructo says:
  51. P.T.Wheatstraw says:

    I can’t describe how awesome I think this rationing/shortage situation is.

    Primarily because I grow a lot of the food I eat, but also because for a lot of people this is a wake-up call: “Ooooh! There’s this thing called the ECONOMY. Why didn’t I ever bother to understand it before?”

    If you want to invest a little time and effort, you can avoid getting screwed on the rising costs of secondary products (beer, bread, etc.) by learning to make your own. There is also a lot of personal satisfaction to be found in eating whole meals that are almost 100% the work of your own hands.

  52. forgottenpassword says:

    My spending habits havnt changed. I am still a coupon-clipping, wait-for-a-sale, miserably cheap SOB.

    BRING IT ON WORLD!!!!!!!!!

  53. Just steal food. Problem solved.

  54. HOP says:

    making your own bread can be as expensive as buying it…seems like the powers that be have got us from all sides….gas, food ,housing….it’s grab and run time……eventually the bubble is gonna bust

  55. MelL says:

    @Buran: *Just* got home from Wal-Mart, where I bought 2% milk for $2.89, in western Kentucky.

  56. ogman says:

    Most of the problem is caused by speculators. The rich gamble with life’s necessities because that is the only way they can continue to growth their false base of wealth. The rich are unsustainable and if we don’t do something about it soon, countries will be at war over food while the wealthy rake in even more profits.

  57. tedyc03 says:

    Food shortages are nothing new. They’ve happened for centuries. Americans won’t starve to death even in the face of rising food prices, and if our waistlines are any indication, we can probably stand to reduce our food intake. Those of you predicting a Malthusian catastrophe really need to realize that we have the greatest access to the most plentiful supply of food in history and we’re not going to starve to death.

  58. mpjones says:

    @LastVigilante: Actually, rising food prices are a pretty good form of birth control. I’m sure as hell not going to pay 500 grand over the next two decades just for the patter of little feet.

  59. Who in the hell NEEDS 20lbs sacks of rice??? Or even several of them?

    I know some Asian families eat rice pretty much every single meal, but come’on now. Even so 20lbs of rise should last a LOOOOOONG time. Personally I’m lucky if I can use three of those Uncle Ben boxes in a month.

    At the consumer level this whole thing is completely absurd.

  60. mpjones says:

    @ogman: I envy you. It must be comforting to think you live in a world where economic problems are merely the result of rich people gambling, rather than the unyielding forces of supply and demand.

  61. There is no real shortage of rice in america. The rationing is on imported rice from countries like india. Long grain rice called banaspati. Which tastes better then regular rice. India Currently has a ban on exporting of rice. I also heard that wheat and corn can’t grow in the same plot of land so the ethanol craze is not responsible for higher wheat prices. Anyone know if that is true

  62. mpjones says:

    @ogman: I envy you. It must be comforting to think you live in a world where economics problems are merely the result of rich people gambling, rather than the unyielding forces of supply and demand.

  63. mpjones says:

    D’oh! Sorry for the doublepost.

  64. @mpjones: Speculators do have a affect on price. Supply and Demand can’t explain alot of whats going on

  65. highmodulus says:

    Another good front page article on this on today’s Washington Post:

    [www.washingtonpost.com]

    Interesting quote from the article:

    “At the same time, food was becoming the new gold. Investors fleeing Wall Street’s mortgage-related strife plowed hundreds of millions of dollars into grain futures, driving prices up even more. By Christmas, a global panic was building. With fewer places to turn, and tempted by the weaker dollar, nations staged a run on the American wheat harvest.

    Foreign buyers, who typically seek to purchase one or two months’ supply of wheat at a time, suddenly began to stockpile. They put in orders on U.S. grain exchanges two to three times larger than normal as food riots began to erupt worldwide. This led major domestic U.S. mills to jump into the fray with their own massive orders, fearing that there would soon be no wheat left at any price. “

  66. frankthefink says:

    @Pixelantes Anonymous:
    The average Asian family of four goes through 50lbs of rice a month from what I’ve read. So I’d say a two and a half billion people in the world NEED a 20lb sack of rice.

  67. JohnnyE says:

    So what if stores are out of rice? Just eat cake instead.

  68. RandomHookup says:

    @dakotad555: I always thought sheep were supposed to be better company. Ummm…so I heard.

  69. chrisdag says:

    Most of the initial media reports on this situation (at least in the USA) mentioned explicitly that the frequent purchasers of the large bags of rice/flour were actually business owners (bakeries, restaurants, etc.)

    The business people were likely doing a bit of local arbitrage — wholesale prices spiked quickly and probably far faster than places like Costco can react to when pricing their own goods. That may explain the initial flood of bulk purchases in some areas.

    That was the start; what happened afterwards is may be hoarding or a bit of panic buying.

  70. overbysara says:

    the cost of food is killing my budget.

  71. flipx says:

    I will keep repeating this Who looks like the whack jobs now? The average guy or the Mennonites need I say any more…

  72. daveplot says:

    @humphrmi:

    2% milk is $4.19 here in Maryland. Just bought a gallon from Super Fresh last night.

  73. vastrightwing says:

    This is exactly the same hording that happens during a north east snow storm, the whole grocery store is wiped out of water, bread, batteries, milk, beer and practically everything else. The truth is that even the worst snow storm will end in a couple of days. Hording food isn’t necessary: this is just a panic response. In this case, we have national hording going on because people are scared.

    The answer is simple: stop worrying and live your normal life, then things will go back to normal.

  74. kable2 says:

    You all still drink milk. yuck.

    /Have not touched it in years
    //disgusting how they have to spin out most of the blood and puss
    ///disgusting mix of chemicals, bacteria, blood and puss

  75. DominiqueRdr says:

    @karmaghost: I agree. Working on creating biofuels from switchgrass makes a lot more sense.
    [bioenergy.ornl.gov]

    @LastVigilante: It seems to me that the only proven way to end overpopulation is through education and raising the standard of living of third world countries.

  76. atrixe says:

    @hypochondriac:

    errrr, I think you mean basmati rice.

  77. bohemian says:

    Food prices where already killing our budget before this current gas price hike and food panic. We already were stockpiling certain things months ago. I bought large bags of wheat & spelt flour a few months ago. The price of a bag of flour has already gone up 25% since then (wheat not spelt). Ironically some odd products like spelt flour and lamb have not gone up so they are about the same price now as wheat flour & beef.

    We have drastically changed our food habits. We buy very little processed anything and have gone to mostly pork & turkey for meat. We have also started eating more things that rely on rice, beans and smaller amounts of meat.

    We live in a subdivision and there are people raising chickens in their back yards. Were planning a larger than normal garden this year with the hopes of freezing the extra to help with winter food costs.

    As far as ethanol goes the farmers are the only people out here with any money. When the farmers were all going broke in the 80′s we were all supposed to feel sorry for them and help them out. Now that the non farmers are in a pinch we get no help.

  78. Trai_Dep says:

    Call me Old Skool, but if it ain’t Jasmine, it ain’t rice. :D
    And yeah, 20 or 50lbs ain’t no big thing in a month for a typical Asian household.

  79. Buran says:

    @StevieD: You can’t sustain a business when the product is priced out of reach of the customers. They will be forced to drop the prices when they lose too much business. Simple economics.

  80. JohnMc says:

    I would not be surprised once this is fully looked into that the whole thing was media hype. Go into any food store (I have been to 6 since this story broke) and you can pick up a 10# of rice anytime. I don’t know many families that buy 50# bags of rice. The flour run is because certain flours from suppliers like Sysco have forced restaurants to go into the wholesalers looking for cheaper all purpose flour as a substitute. Corn prices are being driven by the whole ethanol boondoogle.

    Don’t blame the farmers though, except for corn they committed to futures sales contracts long before this run up in grains started.

  81. I’m not entirely sure I’m going to explain this right, but here goes:

    A friend of ours, who works with farm insurance stuff, was telling us last night that typically farmers lock in what they view as a good price for several years. So three years ago corn farmers locked in 5-year prices at the elevators at $2.50/bushel, which was a historic high, etc. Now corn’s selling at $6/bushel, they’re locked in at $2.50, and something like 40% of them (locally) are underwater and won’t be able to afford seed.

    It probably means that there’s going to be some damned cheap farm land on the market in the spring (enough to put the brakes on the ridiculous run-up in midwestern farmland prices due to ethanol? Unknown), and that without a government bailout ON TOP OF our massive and ill-considered subsidies, we’re going to have a serious corn shortage. (Which is hard to even IMAGINE in this ag climate where corn is so ridiculously overplanted.)

    This economy just gets weirder and worse. DO NOT WANT.

    @hypochondriac: Good wheat land is typically the high plains (Dakotas, etc.) while good corn land is the midwest (Illinois, Iowa). Corn prefers ex-tallgrass prairie; wheat does better in ex-shortgrass prairie. You could grow either on either (and I’m sure there are types developed for various different soils/climates), but small differences in yields matter for commercial farming, so ….

  82. VikingP77 says:

    @LastVigilante: I decided 10 years ago not to reproduce. Its hard to think that way though. Not many people here accept it. Its getting harder and harder to sustain the planet. We are so lucky in this country not to have to deal with the crowding like Africa and Asia. There is so much here for us still and we aren’t valuing it at all. LOL at the birth control in the water thing! I WISH! People crowd out the better animals and destroy soil.

  83. BlackFlag55 says:

    As usual, I’m of a different mind. But then, back in 1980 I learned how to employ PR Newswire to get out a corporate message to newsrooms worldwide without any fact checking or editorial oversight. $100 for 400 words, no questions asked, and out over the Mojo wire to every news desk in the world. Imagine the possibilities. And since you’ve got to know by now that the ‘news’ is simply a rewording of public relations fax blasts, the above should connect some dots for you. Again, imagine the opportunities for malfeasance and misinformation. Over the years, studying market perception manipulation I came to understand the Tavistock Institute’s role in modern myth making, I mean, advertising, and in developing strategies for manipulating widely held beliefs. They’ve been at it a long time now, and you haven’t.

    What’s that got to do with rice and flour?

    Archer Daniels Midland. Cargill. Monsanto. Etc.

    These and other large food combines are determined you will accept GMO as normal and natural, as natural as Luther Burbank grafting new kinds of plant varieties. But Msr. Burbank never grafted human DNA into rice shoots to ‘increase disease resistance’.

    It will be near impossible to prove this assertion, because the skill in creating layers of plausible deniability is approaching that of a magus. But … quis bono is as true today as follow the money, and both of those historic truths point directly at the recent splash of ‘news’ stories in all the important media proclaiming the genetically modified food crops will solve this crisis. At the same moment the media is making sure we KNOW there is a worldwide food shortage.

    Convenient.

    I’d hazard a guess that just as Big Oil manipulates price, availability, refining and delivery of their product in imitation of Cecil Rhodes’ dictum to always buy diamonds off the market in order to keep the price high, that the food combines have reached a level of cooperation where they can control availability of critical food stocks in order to cause a stampede for their real goal … acceptance of genetically modified crops.

    Just a thought.

  84. jamar0303 says:

    @kable2:
    And soy milk’s cheaper anyway.

  85. @Concerned_Citizen: I saw some article in passing on CNN or the WaPo that said that China and Japan were considering restricting the rice supply to America because of the run…I guess they figured if we were having a shortage, we would create a shortage there?

  86. marsneedsrabbits says:

    @sean.thor:

    Yeah, another fellow Celiac here. I haven’t had trouble finding rice yet (although I’m still working on a giant bag of it) My problem has been with the rising costs of the gluten free food. It was expensive enough to tree and live a normal gluten free life style.

    It is ridiculous. There is no reason for GF foods or its components to cost as much as they do.

    I bake everything. Everything. Because gluten-free bread starts at $4.00 a loaf, I bake.

    Now its getting plain ridiculous. I pay $6 for a 10oz box of Brown Rice Cereal. I could go straight rice, meat, fruits, and veggies but thats starting to creep up here too.

    It is getting very expensive. I would look into alternatives if you possibly can. Poha (Indian Rice Flakes) makes a tasty cream of rice when I prepare it for breakfast, and a 2 pound bag is $3.50 or so at the Indian Market.

    If you’ve ever wondered what people on the other side of the planet eat, now is as good a time as any to find out. People most everywhere generally eat farther down the food chain than we do in the West, so this would be good for Celiacs and wheat-eaters, too. It can be a lot less expensive, too.

    Some Celiacs use Amazon & order GF food from them using their free shipping option. Some people join co-ops or order in bulk and split their orders with another family or two.

    We buy on sale, from the Asian & Indian markets, from Amazon, and from the health food store and Costco/Sam’s on sale or in bulk.

    Since my diagnosis, we eat more “adventurously”, for lack of a better term. It’s cheaper and we eat stuff we would have probably never tried.

    Still, when Rice Chex went “gluten free” last month, and I could suddenly get “regular” breakfast cereal at the grocery store again, I was a really happy camper.

  87. trk182 says:

    I live in Texas, food prices have not gone up by much in 4 years, at least not what I’m buying. As far as cost of eating out at steakhouses,the price hasn’t gone up there either. As far as hording goes, that’s just silly I can go to any store here Sam’s and Costco’s included and there are 50-80lb bags o rice everywhere. And $4 for milk? do you shop at gas stations? This is a made up “shortage”. If I don’t have to go out of my way it, or pay anymore for it, then there is no shortage. As far as China and India go that’s like 2.3 Billion people between both countries a shortage of food is something they “need”.

  88. marsneedsrabbits says:

    @TechnoDestructo:

    No, they aren’t as great a deal as bulk, but if there was truly a shortage, even the small bags would be gone, not just the large bags the articles are warning about.

  89. xanteen says:

    Wen to out this morning to buy Mariocart for the kids (they love it) and saw a line of about 50-60 people across the parking lot at Best Buy waiting to buy a Wii.

    I don’t think times can be that hard, yet, if the line for a Wii are longer than the lines for bags of rice.

  90. Aphex242 says:

    @karmaghost: Not controversial. You pretty much have to have head trauma (or be a corn farmer) to think Ethanol is a good idea.

  91. cef21 says:

    @hypochondriac: There’s a substitution problem here. Consider Tortillas — there are two varieties in most stores, corn and flour (i.e. wheat).

    If a bunch of corn production goes toward ethanol (which is happening), then there won’t be as much corn for corn tortillas. The demand for corn tortillas, however, doesn’t change, so the price of corn tortillas goes up. So, some people switch to flour tortillas. As a result, demand for flour tortillas goes up, increasing the price for flour tortillas and their raw ingredients — wheat.

    A lot of cattle are corn-fed. So, when the price of corn goes up, the price of beef goes up also. People then switch from beef to pork and chicken, and the prices of pork and chicken go up.

    Meanwhile, the ethanol subsidy is causing people to switch land which was used for something else to using it for corn. As a result, there’s less of whatever used to be grown on that land, and so the price of that goes up.

    When corn is diverted to ethanol, the price of corn syrup goes up, so the price of a bunch of junk food goes up as well. As a result, some people switch to more healthy alternatives, driving those prices up.

    In the end, the one moronic decision to subsidize corn-based ethanol impacts the prices of most foods.

  92. ideagirl says:

    @humphrmi: I’m in California, and Milk at our Safeway is $4.65 a gallon.

  93. neilb says:

    I paid the same $1.99/lb (for a locally-grown Ohio side of beef) that I paid last year. The prices of local produce (using a Community-Supported Agriculture program) are also the same to last year–if you commit to buy a lot from a local farmer you can avoid a lot of the market. My beef was not shipped far at all and neither is the grass/corn that fed it. My eggs are from a farmer who lives 5 minutes from my house and the feed comes from a supplier nearby.
    We live in a built-up suburban community–it IS possible to purchase locally-grown food. We are largely sheltered from the run-up in prices because these cannot break the CSA contract or take away the year’s worth of high-quality beef in my freezer.
    Eat by the mega-grocer and be prepared to see more of the same sorts of run-ups from the mega-grocer.

  94. ideagirl says:

    We have started buying our meat from the local university. The school has an agriculture campus, and raises, butchers and sells its own meat. It is all grain fed and free range, but they can’t sell it as organic because they aren’t certified by the state. I spend about $40 a week there for sausages, roast, bacon, etc. I am paying an average of $2.65 a pound per trip. The meat is of the best quality, and tastes awesome. Between this and buying produce at the farmer’s market, we have cut out grocery bill in half, and the food is much better. We spend about $100 per month on produce and eggs at the farmer’s market. At this point the only thing I buy at the grocery is a few canned items, milk, butter and cream, and I mostly get that stuff at Costco now.

    If you live near a university with an ag campus, I highly recommend you check to see if they sell any of their wares.

  95. @lookatmissohio: @ian937262: @mpjones: @VikingP77: There has to be name for us, to classify people who actively choose not to reproduce. Whether it be against overpopulation or other reasons, its reassuring to know there are others in the same mindset.

    Has anyone ever seen any research done on the human population capacity of this planet’s resources? I find it hard to believe, as right now we are having all these problems at 6.65 billion, that we could sustain any more than 8 billion. At this rate we are due to reach that in the next 20-25 years, and I don’t foresee us colonizing any other planets by then.

  96. Trai_Dep says:

    I’m waiting for the moment that people realize that “long pig” is cheaper than beef.

  97. The Bambino says:

    @kable2:

    Milk is one of the best complete foods out there. One cup of whole milk contains 150 KCal, 9 grams of protein, 12 grams of carbs, and 8 grams of fat. The average American would do well to drink a few glasses of milk a day, not to mention it is very INEXPENSIVE for the nutrients it contains.

  98. HungryGrrl says:

    I am hoping that organic and local products will become a better bargin because of the rising prices of standard products. Feeding petroleum-fertilized corn to beef is going to get more expensive but I don’t think the cost of grass is going up. Likewise, the cost of shipping apples from Argentina will go up, but the cost of a local apple will remain the same.

  99. @cef21: “Meanwhile, the ethanol subsidy is causing people to switch land which was used for something else to using it for corn. As a result, there’s less of whatever used to be grown on that land, and so the price of that goes up.”

    Soy. For the most part, to meet ethanol demand, corn-and-soy rotation has gone to a corn-on-corn rotation, which is its whole own set of problems.

    @LastVigilante: “Has anyone ever seen any research done on the human population capacity of this planet’s resources?”

    Yes, I teach it in my ethics class. Basically, it’s likely we would have hit a Malthusian catastrophe by 1900 w/o the development of nitrogen-based fertilizers, which drove crop yields through the roof. Today, however, yields improve only incrementally, fields tend to need more nitrogen every year (like a crack whore that needs more crack to get high every time), and nitrogen fertilizer is ABSURDLY expensive in terms of energy to make, and that’s typically fossil-fuel energy, so nitrogen fertilizer is getting WAY expensive. (Mother Nature puts nitrogen into soil either very slowly through legumes, or very quickly through LIGHTNING STRIKES. So we’re talking lightning-strike levels of energy here.)

    Anyway, a lot of the debate on the carrying capacity of the planet centers around a) how available and expensive nitrogen fertilizer will be in the future; b) whether developments in agriculture can improve yields more; and c) how much land global warming will remove from useful production. (Oh, and d: ATLANTA AND SO-CAL, STOP FUCKING USING ALL THE FRESH WATER, WE NEED IT TO EAT! and variations on that theme.)

    Before nitrogen fertilizer, the carrying capacity of the planet was around 2 billion, but other agricultural techniques have also improved since then (but we might also lose arable land). So you can use 2 billion as a worst-case-scenario. Some estimates think we could get as high as 12 billion, but that would require little meat-eating, excellent land management, and a fairly flawless food distribution system.

    I am most persuaded by the dudes who say (and I’m not a scientist, this is just based on what I’ve read) that with inefficiencies in the system, 6 or 7 billion is about the best we can do, and if we don’t get water management under control, we’re talking 4 or 5 billion and a lot of dead people who died so some idiot could have a greener lawn.

    A big debate right now, and the reason we discuss this in ethics class, is whether food aid is actually moral in the long run, because (the argument goes) if we look at the carrying capacity of individual nations or regions, what food aid tends to do is prevent “population corrections” (read: famine, disease, war resulting from famine) that reduce a nation to its carrying capacity. The constant injection of food aid not just prevents the “correction” but allows the population to grow even FURTHER, so that when the correction inevitably comes, it will be far more catastrophic.

    It’s a very difficult issue, because if you can look someone starving in the face and refuse them food, you suck epically. But if giving them food helps them make their situation ever more precarious … that sucks too.

  100. BuddhaLite says:

    @ideagirl: You’ve got the right idea that many many people just don’t know about. I bought all of my fruits and vegetables yesterday at a produce market for $7. Not everything is a deal but when you can get 3 red peppers for $1 it’s almost like stealing.

  101. Tank says:

    @Falconfire: where do they grow beer??

  102. ChuckECheese says:

    @Tank: Beer is grown in beer gardens.

  103. nyaz says:

    @ShariC: Yeah margerine that’s heathly for you.

  104. Rode2008 says:

    The whole thing is a fraud!

    Re; Ethanol and its total inefficiency. Remember one thing: ANYTHING the government touches gets screwed up. Look at what happened to education (it’s deplorable in the public schools)… look at medical care cost (driven up my the government’s intrusion into Medicare and Medicaid)…Anything and everything that the government gets involved in becomes a train wreck.

  105. @dakotad555:

    Wrong.

    Specialization and economies of scale are the only ways to drive food prices lower. There are nearly 7 billion humans on Earth; you’re going to need to feed an awful lot of people. Buying “cheap land” in the MidWest is a nonstarter. In America, you either don’t have money to purchase land and float debt that’s cheaper than food or you’re not really complaining about this.

  106. taylorich says:

    @kable2: You may have a point, but man I love a good glass of chemicals, blood, and puss with a big ol’ piece of chocolate cake with chocolate icing.

    And FYI it does a body good. I heard that on TV.

  107. veronykah says:

    @jamar0303: Where is soy milk cheaper? Can someone tell me?
    I just had a friend say the same thing…I get 2 GALLONS of milk at Costco for about $5.50, is there soy that is cheaper? I’m all for it. Tell me where!!!! Tell me where!!!

    ChuckECheese: That was great.

    @humphrmi: A gallon of milk at a regular grocery store in the LA area, easily over $4.00, not sure HOW much since I buy milk at costco now…

  108. veronykah says:

    @Rode2008: Uh, I went to public school in MN and it was pretty far from deplorable. Where I grew up there were no private schools, save for religous oriented schools, which always astounds my raised in the big city friends. There was no need for private schools because the public ones were quite good.
    Saying anything and everything the government gets involved in is a train wreck is kind of oversimplifying it don’t you think?

  109. Erwos says:

    @humphrmi: Kosher meat prices have been soaring? That’s news to me. They’ve gone up a bit, but nothing like gefilte fish has.

  110. RandomHookup says:

    Time to befriend a Mormon. But check their “end of the world” closet first.

  111. VnlaThndr775 says:

    Most of us are obese anyhow. A food shortage might do us some good!

  112. bobblack555 says:

    Pasta and Beer. Two of my favorite things.

  113. unklegwar says:

    Great. And if you are on a restricted diet where you can’t eat rice, grains, and general starchy carbs, then you’re screwed.

  114. theblackdog says:

    Food and gas prices have changed my buying habits. I used to drive 10 miles each way to the discounted grocery store to pick up food, now I just walk to the grocery store behind me because now it is much cheaper overall for me to use that store.

    Also, I’ve only been walking the perimeter of the grocery store to get my groceries, since that’s where all the staples are. The only time I really venture into the middle aisles is when I need a basic item like flour, peanut butter, etc…

  115. theblackdog says:

    @marsneedsrabbits: I should go check the bulk food bins at my nearby organic grocery store to see if all the rice is gone now.

    I still have a 5lb can of the stuff and by the time I run out this should have blown over.

  116. wallapuctus says:

    I don’t know where all you vegetarians are shopping, but my girlfriend of 3 years has been a vegetarian since she was 12 and her food costs 50% more than mine.

    Compare a box of Boca Burgers to a box of Turkey Burgers, at cost per lb. How about green peppers at $3/lb compared to chicken thighs at $.99/lb? Milk for $3/gal vs Soy milk for $5/gal?

    I mean, yes you absolutely need vegetables in your diet but meat is not that expensive where I live. Soy based proteins are much more expensive.

  117. ChuckECheese says:

    @wallapuctus: I totally agree with your assessment of food costs. The funny thing, this wasn’t the case just a few short years ago. I call it the Whole Foods-ization of staples and vegetables. In 2001, I could get kale for 59¢ a bunch, beets for 79¢ a bunch, turnips for 39¢ a pound, flour for 25¢/lb. Prices at the health food stores were higher, but still reasonable. I remember despising having to pay more than 79¢ for a red bell pepper.

    Then Whole Foods gained steam. They started jacking up their prices in 2002 and 03. Before long, they, and other health food stores were charging near-current prices, such as 89¢/lb for flour, $4.99/lb for red bell peppers (which comes to about $2.50 each), and $1.99 a bunch for kale and collards.

    What was more annoying was that I didn’t live in a city with a WF, but my local, dingy, poorly stocked and managed health food stores started charging the same prices. So I quit the overpriced health food boutiques and shopped at regular groceries. Then they started raising their prices until they were roughly comparable to WF prices. Wal-Mart in my city now charges $1.10 a lb for onions, 69¢/lb for bananas, $1.87 for a red bell pepper, and $1.59/bunch for greens (when they have them). Celery is $1.50/bunch, and carrots about 69¢/lb. As recently as 2005 I would freak when potatoes cost more than 75¢/lb at the health food store, but now they’re 90¢/lb at Wal-Mart.

    The gist of this is that not so long ago, there were nearly no vegetable foods that cost as much per serving as meat, but now many veggies do, more so if you consume organic. These days I shop at ethnic groceries, where for some reason, they are still able to charge only 1/2 to 2/3 the Wal-Mart price for veggies.

  118. “Now, as for food – the following breeds of dog are edible…”
    -Homer

  119. RandomHookup says:

    @ChuckECheese: “ethnic grocery” = “employing my twelve cousins who are here illegally and will work for soup and bread”.

  120. trujunglist says:

    I have started going to the Escondido swap meet every weekend. They don’t have meat (well, they do, but I wouldn’t buy it there really), but they have tons and tons of stalls just waiting for people to come and buy stuff. You can get INSANE deals if you are nice and/or barter. Remember, they have to get rid of the stuff they bring because they have to pack it back up when they leave and it will go bad anyway!
    So really, you have the upper hand at swap meet produce. Last time I went there, I spent about $10 total and came out with lbs and lbs of food. I also bought a few plants for fresh cilantro and what not.
    Maybe next time I go I’ll write down some of the prices and share them with you guys so I can further convince you that going to the swap meet is the best idea these days.

  121. trujunglist says:

    @bohemian:

    That’s funny. I noticed that lamb is now much cheaper and have been eating more of it.

  122. ChuckECheese says:

    @RandomHookup: Yeah I guess it’s possible that some of these places hire illegals. There are Asian (Korean and Vietnamese mostly) and Mexican groceries here in El Paso, with produce that is usually about 1/2 of the price of Wal-Mart’s.

  123. RandomHookup says:

    @ChuckECheese: If nothing else, I’m sure lots are family run, which means they don’t have to pay as much for the help.

  124. ian937262 says:

    @Eyebrows McGee:

    It’s like being back in Ethics class. Great read, a bit long reply but worth it. Very fascinating.