Food As An Investment
985 ViewsI’ve long taken the position that gold and silver are actually poor investments compared to other possibilities. I’ve written several articles here to this effect, stating my position.
Tonight, I decided to check and see what has happened in the past year with wholesale food prices. Each year, I receive a new price list, except last year, I received several as the canneries struggled to stay ahead of the rapidly escalating prices.
I just published a new price list Wednesday, so I compared this list with the list from this time last year. Here is what I found out - and it’s far more shocking then even I realized. All calculations are based on wholesale prices set by the cannery. They are the result of their buying power (which is quite substantial) and the current market prices.
The ranges listed below are price increase for the large container sizes (bags or buckets) from 2007 to 2008 (only 1 year):
Hard Red Wheat 58% - 76%
Hard White Wheat 58% - 85%
Corn Whole Yellow 42% - 82%
Alfalfa Sprout Seeds 31% - 48%
Great Northern 16% - 32%
Potato Slices 20% - 24%
Brown Rice 10% - 29%
White Rice 13% - 27%
Eggs Mix 29% - 33%
Rye 17% - 36%
Lentils 22% - 33%
Soy Beans 17% - 24%
Ezekiel Mix 20% - 24%
Pearl Barley 37%
Flax 44% - 54%
Golden Flax 18% - 28%
1 Year, 1 Person, 66 #10 cans 25%
1 Year Basic Food Storage, 13 SP Buckets 69%
All Purpose Flour 59% - 72%
Bakers Flour 54% - 65%
Unbleached Flour 59% - 72%
Whole Wheat Flour 59% - 88%
Apple Slices 44% - 51%
Banana Slices 19% - 27%
7 Grain Mix 32% - 45%
9 Grain Cracked Cereal 36% - 56%
Kamut 17% - 25%
Buttermilk Powder 42% - 53%
Instant Milk 44% - 96%
Regular non fat Milk 24% - 31%
Oats Groats 25%
Quick Rolled Oats 19% - 25%
Regular Rolled Oats 19% - 25%
Peas Split Green 23% - 35%
Peas Whole Green 25% - 30%
Peas Whole Green 25%
Popcorn 25% - 29%
Potato Completely Supreme 24% - 38%
Potato Dices 13% - 23%
Potato Flakes 17% - 26%
Potato Hashbrowns 28% - 41%
Potato Slices 20% - 25%
February 2007 gold was $655, February 2008 gold is $920, or 40% increase in the past year. The facts are clear - gold is NOT keeping up with many commodity prices.
All food commodities have gone up in price, not just those I’ve listed above. These are the noteworthy ones and the staples most Americans eat.
Personally, I don’t really advocate “food as an investment”, but I wanted this article to get some viewing. If I’d titled it “Food Crisis Ahead” (true), or “Skyrocketing Food Prices Force Americans To Consider the Reality of Famine” (also true), most of the sheep would just keep right on grazing, oblivious to what’s happening. As it is, I don’t expect anything to change despite the clear evidence that we are raising the price of food faster then anything else (including oil).
Most people simply refuse to recognize what this means for the future. Their hope is things will stabilize or somehow even decline in costs. This remains very unlikely since energy costs are still jumping and resource depletion is now a fact of life all over the world. I dare say we can expect at least a 25% price increase in food per year and in some cases, it will be much worse.
One piece of good news: At least some Canadians are not seeing huge wheat price increases - yet. Good, grab what you can, while you can.
Maybe somebody can chime in on how much our purchasing power has declined with the US dollar in the last year, I’m too tired to go look it up.
February 16th, 2008 at 9:30 am
Here is what I found out. A year ago 1 Euro cost $1.3137 US and today That same Euro will buy $1.4674 US. And the dollar is still in free fall. Here is something I came across when looking this up…
(A Few Good Things About A Falling, Weak US Dollar
Much has been written about the U.S. dollar’s decline, and lately, even the word recession has been bantered around in the press and various newsletters.
Some analysts are boldly predicting gold to reach $3,000 an ounce and oil to hit $200 per barrel… And some are waiting for the sub-prime disaster to infect the entire housing market.
The sky is apparently falling, and some people are working up a serious lather over the prospects. But how about the U.S. dollar? Will it freefall indefinitely?
Five or 10 years ago, world economists and government talking heads were actually hoping for a decline in the dollar to happen. How can this possibly be good for the U.S.?
With the dollar weakened, the world’s goods get more expensive for U.S. citizens, so consumption is reduced and the U.S. economy cools a little. Inflation and interest rates are held in check. Nothing wrong with that…)
As you can see, even though the sky is falling, some people are still saying it is a good thing. No wonder everyone is into so much denial about the state of the world. Evidently, you will need a tow-truck to get the sheeples heads out of their asses, but I personally do not think that there is a tow-truck big enough.
February 16th, 2008 at 9:50 am
Wow. If gold reached $3k an ounce, wheat will be $900 a bushel (or something like that). Which will be more valuable?
James sent me a link to this article, which is pretty interesting. It shows the boom going on in Canada for world grain markets and even an idiot going on record that it’s “their fault”, never realizing that it is our way of life driving all of this. Some charts there to see too.
February 16th, 2008 at 10:49 am
mwhodges.home.att.net/exchange_rate.htm
All You ever wanted to know about the decline of the dollar and much more.
US dollar down 67% vs euro in the period 2001 -2007
$100,000.00 in 2001 equals $33,000.00 end of 2007.
2006 to 2007 down 14%.
There is a lot more info on that site. Also, see the home page of same. Good luck wading through it all.
Hope you feel better soon.
February 16th, 2008 at 1:56 pm
Food nowadays seems more like insurance than investment.
Regarding purchasing power, our food co-op has stopped selling non-fat dry milk powder in cases, presumably because the price is so high, few would buy it. We’ve noticed if we order 12 “units” (which a case held) of NFDM that the order arrives exactly as it did in the past–in the very same case box. Yes, prices are up on almost everything but I’ve not done any analysis to see amounts.
The only reason gold, silver or platinum, but especially gold, looks good as investment would be for eventual barter for something absolutely essential that you don’t have.
An antique dealer friend told me that when buying gold, it might be wise to stick with something recognizable such as coins because there’s so much imitation stuff out there. She said the Chinese have dramatically hurt the genuine antique businesses because they are now manufacturing an incredible array of things and making them look so much like the original that even the experts are often fooled, for example things like high-button shoes, but the list is nearly endless.
When buying gold, whether coin, jewelry or other, buyer beware if its source is unknown. If its source IS known, check how long that source has held it. Was it in the same hands prior to the massive influx of chinese “goods”?
Who knows? Someday when the dollar has plummeted to nothingness, we might be trading bags of wheat back and forth.
February 16th, 2008 at 2:32 pm
So, I sent THIS link to friends … no one replied about storage food, but I got replies to the nature of “ho! this fellow on your survival acres is a babe!”
February 16th, 2008 at 4:09 pm
LOL!
February 17th, 2008 at 10:09 am
reuters.com/article/ousiv/idUSN1759650320080217?sp=true
February 17th, 2008 at 1:04 pm
No kidding, Prisoner. I’m at a loss to understand Warren Buffet’s thinking in buying a large share in Kraft, another ‘food re-packager’. Lousy fundamentals, lousy technicals (not that Buffet uses technical analysis), and it doesn’t GROW the food.
I understood him shorting the dollar, but a value investor buying Kraft? (or Hormel, or any of the ‘repackagers’)? This I don’t get.
February 17th, 2008 at 8:12 pm
Once again, another fine article.
Fernwise, buying a repackager makes all the sense. Farmers do not make a lot of profit and are dependant upon those in power on prices. Notice that there are few family farms left, few have small ads, none have large ads, and even fewer build nice new buildings.
As far as gold goes, it may be a nice leverager to those that have, but it is not a need, it’s a want. Like babies, we will again judge the worth of everything by it’s ability to fill a need, ie: food, clothing, ammo, etc…
Needs are accessed by the person, cost controlled by the level of need. Gold, being a want, is accessed by those who already have it and wish to control it.
Better save the seeds too.