Another Depressing Sift On Inflation:Food Crisis Spawns Riot

April 14, 2008, CNN's Wolf Blitzer goes into depth on how the poorest countries, and in particular, the urban poor, increasingly cannot afford to eat.
Farhad2000says...

Prices are rising because:

- Transportation and production costs of food items are higher.


At the Al-Mara farm in Midland, Va., Jeff and Patty Leonard run a large dairy operation where about 600 cows produce 19,000 pounds of milk each day. They plant about 1,000 acres of corn, so they don't face all of the rising feed costs like some farmers. But they sympathize with consumers because the costs of nitrogen fertilizers and diesel fuel have all gone up sharply, raising production costs by nearly 30 percent.

- Climate changes over the last year, meant that there have been crop failures over the world.

- There has been a substitutionary effect of switching from food items to growing biofuels.

"It's partly because of corn prices, driven up by congressional mandates for ethanol production, which have reduced the amount of corn available for animal feed. It's also because of tougher immigration enforcement and a late spring freeze, which have made farm laborers scarcer and damaged fruit and vegetable crops, respectively. And it's because of higher diesel fuel costs to run tractors and attractive foreign markets that take U.S. production."

- Demand is increasing because of population growth and globalization.

Globalization also explains higher milk prices. Australia, a leading milk exporter, is struggling through a drought, and European governments are pulling back dairy subsidies. So U.S. farmers, aided by a weak dollar, are stepping in to meet growing demand for milk products in China and India. That's pinched supply at home and abroad, driving up prices.


The Financial Times has a excellent slideshow Why are food prices rising?

NetRunnersays...

^ Agreed. Now we just need CNN to spend at least 1 minute out of 4 telling people about the causes.

On the other hand, I can see why they didn't. It might lead people to think about how they vote, and we simply cannot have that.

NetRunnersays...

You're right, I missed it, they do have bullets in there on the cause.

CNN is okay sometimes, atrocious others. I thought this was one of those atrocious times where it was all fear & no information besides "this is really bad, and now back to lapel-pin-gate..."

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