But while Americans continue to put focus on consumption, a hidden menace is creeping up and will eventually spill into the mainstream - albeit too late for those who weren’t paying attention. Though not yet reflected in day-to-day retail prices of food, it’s only a matter of weeks or months before consumers start to realize their grocery bills are increasing by 20%, 30% or more.
UK Telegraph commentator Ambrose Evans-Pritchard writes about the growing concerns of food production around the world:
The Moscow bank Uralsib said half of Russia’s potato crop has been lost and the country’s wheat crisis will drag on for a second year, forcing the Kremlin to draw on world stocks.
Wheat prices have risen 70pc since June to $7.30 a bushel as the worst heatwave for half a century ravages crops across the Black Sea region, an area that supplies a quarter of global wheat exports. This has caused knock-on effects through the whole nexus of grains and other foods.
“We had hoped things would calm down by September, but they haven’t: more commodities are joining in,” said Abdolreza Abbassanian, grain chief at the UN’s Food and Agriculture Organisation.
The UN fears a repeat of the price spike in 2008 that set off global food riots. Wheat prices are still far below the $13 peak they reached then, and the global stocks to use ratio is still “safe” at 22pc. However, the outlook is darkening.
“It is not yet a crisis but things are precarious. If there is another bad year in Russia and Ukraine, this will leave us prone to shocks. All it takes then is one piece of bad news,” he said.
In 2008, when energy and food prices sky rocketed to historical highs, Americans were under the impression that things had never been better. No one realized that the added pressure of high food, energy and commodity prices had lead to one of the deepest economic recessions in our history.While Americans were enjoying filet mignon and upper-class dining experiences, billions around the world were on the brink of starvation. Hungry people the world over were protesting in the streets, not because of politics, but because they couldn’t afford to eat..."