Wall Street Journal advises to stock food

[hugolp]

http://online.wsj.com/article/SB120881517227532621.html

Load Up the Pantry

*
By BRETT ARENDS

I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

These are trends that have been in place for some time.

And if you are hoping they will pass, here's the bad news: They may actually accelerate.

The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.

Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.

The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.

A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.

You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.

If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.

The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.

[hugolp]

http://wnd.com/index.php?fa=PAGE.view&pageId=90947

From the article:

Spokesman Bruce Hopkins of Best Prices Storable Foods told WND his company was having trouble obtaining No. 10 cans and other storable foodstuffs, in part, because the federal government was purchasing such large amounts.

"We don't know why," Hopkins said. "The feds then went to freeze dried companies and bought most of their canned stock."



Can you survive economic crisis?
Booming preparedness industry says Americans are stockpiling
Posted: March 08, 2009
8:15 pm Eastern

By Drew Zahn
© 2009 WorldNetDaily

To some, the term "survivalist" conjures images of camouflage-clad men stockpiling freeze-dried food in a mountain cabin, but in the current economic crisis, the people quietly preparing to survive catastrophe may just be your next-door neighbors.

In his column in last month's Financial Times, business and technology expert Ade McCormack writes, "The world is in crisis and with it the world of business. Many of us have two plans. Plan A involves President Barack Obama performing some economic magic. Plan B involves a revolver, a vegetable patch and a subscription to Survivalist Monthly."

And while McCormack was writing with a hint of jest, dissent over the president's trillion-dollar spending approach to the economy has left many average, everyday Americans considering something looking suspiciously like plan B.

Discover the shocking truth about the U.S. economy – and what you can and must do – with "Black Hole," the most recent edition of WND's acclaimed Whistleblower magazine!

Bill Heid of Survival Seeds, a company that sells "banks" of high-yielding vegetable seeds sealed for long-term storage and awaiting a family's need to grow its own food, says business is skyrocketing.

"It's been dramatic, nothing short of dramatic," Heid told WND. "The survivalist mentality used to be considered a fringe element, but now that economic times are such as they are, many more average, regular folks are adopting the same set of preparations."

Heid told WND what's most notable is that his boom in sales isn't coming from just the usual survivalists stocking up for a Y2K-like event.

"Ninety percent of our increase in business is new business," Heid said, "people who have never thought about surviving in case of emergency before."

The Christian Science Monitor reports that Lehman's, an Ohio retailer of home self-sufficiency equipment, has recorded huge sales increases from across the preparedness spectrum, from curious buyers to the stereotypical die-hards, according to Glenda Ervin, the company's vice president of marketing.

Vic Rantala, founder of Minnesota-based Safecastle, which markets home shelters for protection against disasters such as hurricanes and chemical attacks, told the Monitor his company's revenues have more than doubled since 2007.

"If most people think of a survivalist as an armed loner with extreme views – there are folks like that out there, but there are many more in America who are simply involved in preparing for down times, lean times or disaster," Rantala, a former U.S. intelligence analyst, told the Monitor. "It's logical. It's common sense."

Seattle Times Columnist Danny Westneat interviewed Claire Anderson, a 68-year-old woman who was prompted by Obama's call for community organization to host a meeting of neighbors in her apartment. Their discussion of the slumping economy and fears of what lies ahead harkened back to the leaner days of her World War II childhood.

"I think we're headed back to the days of the victory gardens," Anderson said. "We have to figure out how to help ourselves. We can't be isolated. We can't sit around and wait for the government."

(Story continues below)



A New York Times article from last summer suggests last year's elevated fuel and food prices sparked a surge of interest in gardening that hasn't slowed since.

"Seed companies and garden shops say that not since the rampant inflation of the 1970s has there been such an uptick in interest in growing food at home," writes Times reporter Marian Burros. "Space in community gardens across the country has been sold out for several months. In Austin, Texas, some of the gardens have a three-year waiting list."

George C. Ball Jr., owner of the major seed and plant supplier W. Atlee Burpee Company, told the Times sales shot up by 40 percent last year, double the annual growth for the last five years.

Ball said of the surge in business, "You don't see this kind of thing but once in a career."

Anxiety over the economy has generated a spike in other areas of the survival and emergency preparedness industry, too.

Harry Weyandt is president of Nitro-Pak, a company that sells freeze-dried food, survival kits, fuel, camping gear and a variety of emergency preparedness products.

"Since the middle of last September, the demand for our long-storing foods and supplies has been very high," Weyandt writes in a column on his company's website. "We are shipping orders as fast as possible, but the demand for preparedness supplies and long storing foods is gaining steam again."

Last summer, an ABC News report said "there are worrying signs appearing in the United States where some … locals are beginning to hoard supplies." The report said some suppliers were concerned the U.S. government may be competing with consumers for stocks of storable food.

Spokesman Bruce Hopkins of Best Prices Storable Foods told WND his company was having trouble obtaining No. 10 cans and other storable foodstuffs, in part, because the federal government was purchasing such large amounts.

"We don't know why," Hopkins said. "The feds then went to freeze dried companies and bought most of their canned stock."

A statement from one of the world's larger suppliers of food stores, Oregon Freeze Dry, also confirmed that sales of No. 10 cans had increased so significantly, the company couldn't keep up and had to remove the products from their online catalog.

WND also reported a spike in gun sales in the wake of Obama's election that was even more intense than in the days following Y2K and the Sept. 11 terrorist attacks

And since November, the sale of weapons and ammunition hasn't slowed.

The Orlando Sentinel reports months of steady, heavy buying have left gun dealers in Florida facing shortages on ammunition.

"The survivalist in all of us comes out," John Ritz, manager of a Florida shooting range, told the Sentinel. "It's more about protecting what you have."

"People are just stockpiling," said a spokeswoman for Georgia arms, which has seen bullet sales jump 100 percent since the election. "A gun is just like a car. If you can't get gas, you can't use it."

Newspapers from around the world reported last month on people facing the economic crisis with increased preparations for catastrophe.

The Sydney Morning Herald reports the story of Tony, a 44-year-old stockbroker who lives in a Sydney suburb with his wife and three children. Tony has been stockpiling supplies including rice, multivitamins, peanut butter, honey, soap and toilet paper.

Simon Beer, who operates a survivalist website in Australia, told the newspaper he has seen a surge in interest lately.

"Climate change, peak oil, the economic situation," Beer told the Herald, "people are seeing we're headed for catastrophic changes."

The Toronto Star reports the story of Paul, a man in his mid-50s who only three years ago became alarmed over the possibility of fuel shortage and began a plan to prepare for survival should the worst happen.

"When cars stop running? And grocery stores go bare? What do you think is going to happen?" Paul asked the Star. "It's mind boggling once you grasp it."

And while the newspaper did depict Paul as the more kooky kind of survivalist, labeling him "a conspiracy-minded fellow," the reporter nonetheless was surprised to find him "disarmingly self-aware and funny."

As for Paul, he laughed at the reporter for assuming a man who prepares for catastrophe necessarily fits some "survivalist" stereotype.

"What did you expect?" he asked the Star reporter with a smile. "Head-to-toe camouflage?"

[Uncle Emanuel Watkins]

http://online.wsj.com/article/SB120881517227532621.html

Load Up the Pantry

*
By BRETT ARENDS

I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

These are trends that have been in place for some time.

And if you are hoping they will pass, here's the bad news: They may actually accelerate.

The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.

Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.

The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.

A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.

You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.

If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.

The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.

Isn't it normal to have a demand for a commodity at times? Isn't that why food is called a commodity? Why would the Wall Street Journal complain about food being in demand as a commodity? This would seem to be good news for agricultural states that grow food. Isn't the United States an agricultural rich nation? Isn't the free market supposed to work? Isn't that what the Wall Street Journal all about? Sorry, I just don't get it.

[dannno]

Stock food cause prices are rising?

Why not make your own food? That's a lot more sustainable than stocking up just to avoid the high prices. Stocking up should be done for emergencies.

[hugolp]

Sorry, the article is from last year and I did not realize.

Can some admin kill this thread?

Hugo