[H2 _counted="undefined"][FONT size=2]Kind of tied in with Peak Oil. Not just food bills in Canada, the global food crisis could wipe out hundreds of millions of people within a decade...and I am worried about what movie I am going to watch?!! We are currently spoiled children in Canada and the USA, but these days are also ending soon. [/FONT][/H2] [P _counted="undefined"]
[H2 _counted="undefined"][A href="http://www.theglobeandmail.com/servlet/story/RTGAM.20080424.wfood25/BNStory/National/home"][FONT size=2]http://www.theglobeandmail.com/servlet/story/RTGAM.20080424.wfood25/BNStory/National/home[/FONT][/A][/H2] [H2 _counted="undefined"]Why grocery bills are set to soar[/H2][/DIV]<=author _counted="undefined"> [P class=byline _counted="undefined"]PAUL WALDIE
[P class=source _counted="undefined"]From Friday's Globe and Mail
[P class=article-date _counted="undefined"]April 25, 2008 at 4:01 AM EDT
<=article style=": 100%" _counted="undefined"> [P _counted="undefined"]Canada's near-free-ride on food inflation is coming to an end and consumers better brace for some steep increases in their grocery bills.
[P _counted="undefined"]Food prices have been largely flat for months, mainly because of the surging Canadian dollar, which has reduced the cost of importing products from the United States such as fruits and vegetables.
[P _counted="undefined"]But with the dollar stabilizing near parity with the U.S. greenback and oil hitting record levels, "Canada's good luck on food prices is likely to run out in 2009," said Avery Shenfeld, a senior economist at Canadian Imperial Bank of Commerce.
[P _counted="undefined"]Mr. Shenfeld estimates food inflation will jump from zero to 3.5 per cent next year, outpacing the overall inflation rate for the first time in years. Another CIBC report forecast that oil prices will almost double by 2012, sending gasoline to $2.25 a litre.
[DIV class=nav id=related _counted="undefined"]<=photo _counted="undefined"> [DIV class=enlargeImageIcon _counted="undefined"][A title="View a larger version of this image" onclick="return viewBigImage('364', '225', this.href, 'wfood25', 'Why grocery bills are set to soar');" href="http://images.theglobeandmail.com/archives/RTGAM/images/20080424/wfood25/0425food364big.jpg" _counted="undefined"][img height=116 alt="Mark Anseeuw, shown Thursday at his Winnipeg-area farm, is two weeks away from planting but says his costs have already jumped by $200,000. John Woods for The Globe and Mail" src="http://images.theglobeandmail.com/archives/RTGAM/images/20080424/wfood25/0425food364.jpg" width=188 _counted="undefined"][/A][/DIV][A id=enlarge title="View a larger version of this image" onclick="return viewBigImage('364', '225', this.href, 'wfood25', 'Why grocery bills are set to soar');" href="http://images.theglobeandmail.com/archives/RTGAM/images/20080424/wfood25/0425food364big.jpg" _counted="undefined"][FONT color=#001f5e]Enlarge Image[/FONT][/A] [P _counted="undefined"]Mark Anseeuw, shown Thursday at his Winnipeg-area farm, is two weeks away from planting but says his costs have already jumped by $200,000. [CITE class=source _counted="undefined"](John Woods for The Globe and Mail)[/CITE]
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[UL id=archived_articles _counted="undefined"] [LI _counted="undefined"][A title="Posted: Monday, Apr 14 2008" href="http://www.theglobeandmail.com/servlet/story/RTGAM.20080414.wregulytalk0414/BNStory/National" _counted="undefined"][FONT color=#001f5e]Famine and starvation looms[/FONT][/A] [!--no_match--] [LI _counted="undefined"][A title="Posted: Thursday, Apr 10 2008" href="http://www.theglobeandmail.com/servlet/story/RTGAM.20080410.wfood0411/BNStory/National" _counted="undefined"][FONT color=#001f5e]Why costs are climbing[/FONT][/A] [!--no_match--][/LI][/UL][img height=39 alt="The Globe and Mail" src="http://images.theglobeandmail.com/v5/images/icon/icon-digital-leaf-small-red.png" width=30 _counted="undefined"] [P _counted="undefined"]"If you take [rising food costs] and energy inflation, we're going to go from a country that had no inflation problem at all to a country where the Bank of Canada might be raising interest rates next year to calm inflation," he said.
[P _counted="undefined"]Prices for bread, pasta and flour have already climbed more than 8 per cent in some stores. "There have already been noticeable price increases at the shelf level," said Dave Wilkes, vice-president of the Canadian Council of Grocery Distributors, which represents major grocery-store chains.
[P _counted="undefined"]Maple Leaf Foods, one of Canada's largest food companies, has jacked up the average price of a loaf of its bread by 40 cents in the past six months. More increases are likely if wheat prices remain high, said Michael McCain, the company's chief executive officer.
[P _counted="undefined"]"I think there's undoubtedly food inflation ahead of us here in Canada," he said yesterday. "These are stunningly, stunningly challenging times."
[P _counted="undefined"]Several forces that have shielded Canadians from serious food inflation are losing their effectiveness.
[P _counted="undefined"]The loonie soared 17 per cent against the U.S. dollar last year, but few experts expect it to rise much more. That means Canadians will start feeling the full impact of record high prices for commodities such as wheat, corn and soybeans, which are priced in U.S. dollars. Rising fuel costs will also pump up shipping costs.
[P _counted="undefined"]Meat prices have been low because of a glut of livestock, particularly hogs, in Canada and the United States. But herds on both sides of the border are starting to come down in size because farmers have been losing so much money. The futures market is indicating that meat prices will rise by next fall.
[P _counted="undefined"]Costs for farmers have also skyrocketed. The price of fertilizer has more than doubled since last fall, while diesel fuel and other chemicals have also gone way up. Meanwhile, commodity markets have gyrated wildly in recent weeks, sending the price of wheat, canola and corn soaring one day and plummeting the next. That has added more risk for farmers and left many wondering if the markets are working at all.
[P _counted="undefined"]"It's been very disruptive," said Eric Fridfinnson, a farmer in Manitoba who has been trying to figure out how much he might get for his crops this year. "I think that there really does need to be an examination of all futures markets."
[P _counted="undefined"]Many farmers blame the growing influence of investment funds for distorting commodity prices. According to figures compiled by Gresham Investment Management, a commodities brokerage in New York, the amount of speculative money in commodities futures - that is, investors such as big funds that don't buy or sell the physical commodity but merely bet on price movements - was less than $5-billion (U.S.) in 2000. Last year, it ballooned to roughly $175-billion.
[P _counted="undefined"]By some estimates, investment funds control 50 per cent of the wheat traded on the Chicago Board of Trade and Chicago Mercantile Exchange, the world's biggest commodity markets.
[P _counted="undefined"]"Even the most plain-Jane investors are being told they have to be in commodities," said Michael Swanson, an agricultural economist with Wells Fargo in Minneapolis.
[P _counted="undefined"]Regulators and fund managers say the funds provide valuable liquidity to the markets. They also point out that the average fund investor is a middle-class worker saving for retirement.
[P _counted="undefined"]Along with investment funds, there has also been growing concern about shrinking global grain supplies - wheat stocks are at a 30-year low - and the impact of biofuels. The U.S. government estimates that more than 30 per cent of next year's corn crop will be used to make ethanol. That compares with 10 per cent five years ago.
[P _counted="undefined"]During a special meeting in Washington this week held to discuss agricultural issues, Tom Buis, head of the U.S. National Farmers Union, had this blunt assessment: "We've got a train wreck coming that's going to be greater than anything we've ever seen in agriculture."
