Sunday, February 13, 2011

Food prices

Food prices to rise as Sysco invokes 'Act of God' clause for food supply

Americans can expect food prices to rise massively over the next few weeks to months as the harsh weather effectively destroyed the Mexican winter crops.

In a report from the USDA late last week, crated tomatoes alone have risen 3.5 times their normal cost, going from $6.95 per crate to $22.95.

On Feb. 8, the U.S. Department of Agriculture reported prices of $22.95-24.95 for two-layer cartons of 4×4, 5×5 and 5×6 vine-ripe field-grown tomatoes from Mexico, up from $6.95-9.95 the week before and $5.95-7.95 the year before.

Also in a report from February 4th, the publication The reported that from 80 to 100% of produce in the Mexican fields was destroyed.

“The early reports are still coming in but most are showing losses of crops in the range of 80 to 100%. Even shade house product was hit by the extremely cold temps. It will take 7-10 days to have a clearer picture from growers and field supervisors, but these growing regions haven’t had cold like this in over half a century.”

Sysco, which is one of the largest companies that purchases and supplies Mexican winter produce to restaurants and grocery chains through the country, wrote a letter this last week specifying that suppliers are invoking the 'act of God' clause in their contracts, and will be raising the prices on whatever can be harvested from their fields.

The bottom line to all of this is, food supplies, as well as this year's harvests, will be down to critical levels, if not dire ones. Last week we discussed the destruction of sugar and banana crops in Australia due to the cyclone that tore through that continent, and previously we spoke on corn and cotton shortages. Less than a week later we got another act of God, or act of nature, which did the same to produce on the North American continent.

Corn futures skyrocket as supply dwindles and the UN reports shortages

Banana prices set to skyrocket as cyclone destroys Australian crops

Sugar shortage leads to renewal of GMO Beet planting in the US

The revolts we just saw in Tunisia and Egypt by starving people could occur quickly all around the world, including in the United States, as food becomes scarce, and harvests become meager. Prepare now in any way you can, otherwise the recent price hikes in the futures market and on your grocery shelves will simply be a prelude to the prices yet to come very soon.

Missing from most of the rising food prices is a discussion of the devastation occurring to farmers throughout the world.

Most dairy farmers in the U.S. as facing massive rises in input costs with little or no access to credit.


  1. I was very encouraged to find this site. I wanted to thank you for this special read. I definitely savored every little bit of it and I have you bookmarked to check out new stuff you post.

  2. John, if one understands the potential devastation of your post tonight, how would supply management have a place in a very hungry world? I mean no disrespect to the farmers who are grasping for a fair profit, just pointing out a game with no rules can change very fast.