New term will enter daily Vocabulary

by Laura Ehrenberg-Chesler on October 5, 2012

in Commodities,Geopolitical,inflation/deflation

The term “food unrest” will soon become part of our daily vocabulary.  It reflects the imbalance between food supply and food demand globally.  Currently, there are no riots occurring because of this imbalance, but there may be in the future similar to what occurred during 2008.

There are several shifts that have created this challenge:

1.  A growing global population, that is also rising in affluence, so they can afford more/better food.

2.  In this country, about 1/3 of the corn crop is being used for producing ethanol.  This means we are using more grain to fuel cars, than to feed livestock and poultry.

3.  On the supply side, which is somewhat unpredictable, there are weather issues.  These do not necessarily occur every year, but when they do like this year in the U.S. and Eastern Europe, it can be devastating to crops.

These factors, separately or together, set the stage for potential food unrest in the near future.

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