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Welcome to Call to Decision
Food
Crisis May Threaten Your Portfolio
by
Sean
Brodrick
Dear
David,
The
United Nations' Food and
Agriculture Organization (FAO)
said that world cereal production
may jump a record 2.6% this year
as farmers boost plantings.
In
other words, supply is fine.
Except
... wait a minute ... what's that
other report I read last month?
The one that said world cereal demand
is growing at 3% a year.
Today,
I'll explain why this seemingly
insignificant gap between supply
and demand scares the bejeezus out
of me, and how you can protect
yourself.
The
gap is only four-tenths of a
percent. What could possibly go
wrong, you ask?
Well,
for starters ...
The
World's Food Supplies Have Collapsed
...
Worldwide
stockpiles of cereals (wheat,
corn, etc.) are expected to fall
to a 25-year-low of 405 million
tonnes in 2008. That's down 21
million tonnes, or 5%, from their
already reduced level last year.
U.S.
wheat stockpiles are at a 62-year
low, even though farmers are
planting from fence-to-fence. And
with the U.S. dollar falling fast,
foreign buyers are lining up to
scoop up as much of Uncle Sam's
grain as they can carry away.
Wheat recently soared to the
highest price in 28 years.
Meanwhile
rice, a staple food for
three billion people, is
becoming increasingly
scarce. World stores of
rice have shrunk from
130 million tons eight
years ago to today's
stockpile of 72 million
tons — enough for only
17% of annual global
demand. Result — the
price of rice is up 70%
in the past year.
And
as for corn — well,
more and more of that is
used for ethanol. The
price of corn is up over
70% in the past year and
has more than doubled in
the past two years.
So
to summarize —
stockpiles are at record
lows. The supply on hand
can be measured in days!
And growth in production
can't keep up with
growth demand.
Now,
let me ask you this
question ...
What
If Something Goes Wrong?
What
if the increasingly
freaky weather the world
has been enduring causes
droughts on one side of
the world and floods on
the other? What if
there's blight or some
other major crop
failure?
You
can see why I
believe we are
one bad
harvest away
from a serious
global food
crisis!
People
will put up
with a lot,
but they won't
put up with
going hungry
... not when
they have
guns. In fact,
blood is already
being spilled
over food ...
 Egypt
— food
riots!
In the time of
Julius Caesar
and Cleopatra,
Egypt was the
bread basket
of the
Mediterranean.
Boy, how times
have changed.
Food inflation
is so bad in
Egypt that
people are
rioting over
sky-high
prices. The
government-owned
Egyptian
Gazette newspaper
says that
seven people
have died
since the
beginning of
the year in
brawls in
bread lines.
And
it's not just
Egypt. The
World Bank
says 33
countries from
Mexico to
Yemen have
already
experienced
unrest because
of spiraling
food costs,
and 37
countries may
face more
social
upheavals if
food prices
continue to
rise.
China
says
"no"
to hungry
Filipinos. The
Philippine
government
recently asked
China to
provide
200,000 metric
tons of
milling wheat,
equivalent to
about 10% of
annual
consumption.
Beijing
declined,
leaving the
Philippines
scrambling to
find more
wheat.
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| Internal
Sponsorship |
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Surging
Natural
Resource
Prices
Mean
Monumental
Profits
for
Latin
American
Companies
You've
seen
oil
zoom
past
$100
per
barrel.
You
know
that
metals
like
copper
and
iron
are
going
through
the
roof.
And
you've
seen
the
price
explosion
in
wheat,
soybeans,
and
corn.
Even
water
—
the
most
basic
commodity
known
to
man
—
is
rapidly
gaining
value
as
developing
nations
struggle
to
provide
their
populations
with
potable
supplies.
And
in
my
opinion,
no
region
is
better
positioned
to
capitalize
on
soaring
commodity
prices
than
Latin
America
...
Click
here
for
more
information
...
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Trouble
in
Uncle
Sam's
breadbasket.
Cold
weather
is
chilling
the
fields
in
the
Midwest,
and
too
much
rain
is
sending
rivers
near
their
flood
levels.
Farmers
who
try
to
till
or
plant
in
soils
that
are
too
wet
will
risk
compacting
their
crops
and
other
problems
that
result
in
lower
yields.
On
my
blog
last
week,
I
published
a
note
from
a
farmer
who
complained
that
he
STILL
can't
get
a
crop
in
the
ground:
"In
2006,
we
finished
planting
my
crops
on
April
23.
In
2007,
we
were
done
on
April
18.
I
don't
want
to
be
the
first
guy
planting,
but
I
don't
like
being
third,
either.
Early
(timely)
planting
won't
happen
this
year
if
the
weather
forecast
for
the
coming
weekend
proves
accurate.
Soils
are
completely
saturated
to
the
point
of
that
erosion
has
already
occurred
and
will
get
worse
with
additional
heavy
rains,
and
are
COLD.
I
can't
tell
you
how
cold
because
I've
not
even
checked
temps
yet.
If
planting
is
not
done
by
May
1,
there
will
be
some
nervous
farmers
in
LaSalle
County
and
I'll
be
one
of
them."
Now
sure,
that's
a
local
story,
but
it's
not
the
only
one.
In
fact,
just
this
week,
the
USDA
reported
that
corn
and
rice
plantings
are
being
delayed
by
excessive
rain.
A
hungry
world
is
depending
on
a
good
U.S.
crop
—
if
we
don't
get
one,
those
37
countries
the
World
Bank
is
talking
about
could
erupt
in
food
riots.
How
We
Got
Here
...
Global
food
prices
surged
57%
last
month
from
a
year
earlier,
according
to
the
FAO.
There
are
a
number
of
forces
driving
that
price
explosion
...
Weather:
Part
of
it
is
weather.
Too
much
rain
in
the
U.S.
in
2007,
flooding
in
Indonesia
and
Bangladesh
and
drought
in
Canada
and
Australia
curbed
world
stockpiles.
As
a
result,
the
poorest
countries
may
spend
56%
more
on
grains
this
year
than
a
year
ago.
Global
warming
will
affect
crop
yields,
and
mostly
not
in
a
good
way.
Food
or
fuel?
Ethanol
production
is
on
course
to
account
for
some
30%
of
the
U.S.
corn
crop
by
2010.
The
International
Monetary
Fund
estimates
that
corn
ethanol
production
in
the
U.S.
fueled
at
least
half
the
rise
in
world
corn
demand
in
each
of
the
past
three
years.
As
corn
prices
go
up,
animal
feed
goes
up,
and
prices
of
other
crops
rise
as
farmers
switch
their
fields
over
to
government-supported
corn.
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| As
the
economic
boom
in
China
raises
the
standard
of
living,
1.3
billion
people
have
drastically
increased
their
consumption
of
meat. |
Rising
Demand:
World
Bank
President
Robert
Zoellick
recently
told
a
conference:
"As
the
Indian
commerce
minister
said
to
me,
going
from
one
meal
a
day
to
two
meals
a
day
for
300
million
people
increases
demand
a
lot."
And
he's
only
talking
about
the
poorest
of
the
poor.
There
are
1.1
billion
people
in
India,
and
they're
all
improving
their
diets
and
eating
more
Western
foods.
Meanwhile,
1.3
billion
people
in
China
are
eating
a
lot
better
and
eating
a
lot
more
meat
—
and
it
takes
7
pounds
of
grain
to
make
one
pound
of
meat!
It's
no
wonder
why
food
prices
in
China
jumped
28%
in
February.
Political
pressures:
China
isn't
the
only
large,
populous
country
that
is
curbing
exports
to
ease
prices
—
and
internal
unrest
—
at
home.
- Vietnam,
one
of
the
world's
three
biggest
rice
exporters,
will
reduce
shipments
by
a
million
tons
this
year
to
3.5
million
tons
to
ensure
supplies
domestically
and
curb
its
highest
inflation
in
more
than
a
decade
(20%
year
over
year
—
ouch!).
The
government
also
said
it's
considering
a
tax
on
rice
exports.
Egypt,
Cambodia
and
Guyana
have
all
also
put
export
bans
on
rice
in
place.
- Kazakhstan
just
suspended
its
wheat
exports
to
tame
domestic
inflation.
Kazakhstan
is
the
breadbasket
of
Central
Asia,
and
the
only
state
in
the
region
that
exports
grain,
about
50%
of
the
21
million
tons
it
says
it
harvested
last
year.
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| External
Sponsorship |
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"It
was
so
easy
..."
That's
what
32-year-old
Erin
Herrera
—
a
graphic
designer
from
Chicago
—
told
the
Chicago
Tribune
after
staking
a
small
$200
investment.
Since
then,
she's
had
the
chance
to
collect
20
dividend
checks
boosting
her
tiny
stake
to
an
estimated
$5,099.24.
How
did
she
do
it?
Herrera
is
among
the
thousands
of
smart
Americans
who
have
been
collecting
surprisingly
large
sums
of
income
because
of
a
unique
British
Gov't
initiative
my
colleagues
and
I
call
"Commonwealth
Shares."
Click
here
to
read
my
full
report
...
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