Re: SC66

http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080423/BUSINESS/868303815/1001

Americans hoard food as industry seeks regs

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............

............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 ( a commodity showing signs that it will go into the downside of a worldwide depletion curve in the next few years ).

"Commodity prices across the board are at levels not experienced in many of our lifetimes,"............

...............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."..............

There is no reason to expect food prices to go anywhere but up, given that world energy has now plateued in production ( since 2005 ), and will soon be going into the back side of its depletion curve. Growing climate disruptions will be adding to the up-ward curve of food prices and food availability worldwide.