These are some of the stories, referred to in my previous post, that have confirmed in my mind that the precautions my family has taken against hard economic times are warranted.
MOUNTAIN VIEW, Calif. — Many parts of America, long considered the breadbasket of the world, are now confronting a once unthinkable phenomenon: food rationing. Major retailers in New York, in areas of New England, and on the West Coast are limiting purchases of flour, rice, and cooking oil as demand outstrips supply. There are also anecdotal reports that some consumers are hoarding grain stocks.
At a Costco Warehouse in Mountain View, Calif., yesterday, shoppers grew frustrated and occasionally uttered expletives as they searched in vain for the large sacks of rice they usually buy.
"Where's the rice?" an engineer from Palo Alto, Calif., Yajun Liu, said. "You should be able to buy something like rice. This is ridiculous."
The bustling store in the heart of Silicon Valley usually sells four or five varieties of rice to a clientele largely of Asian immigrants, but only about half a pallet of Indian-grown Basmati rice was left in stock. A 20-pound bag was selling for $15.99.
PALO ALTO, Calif. — Rationing of rice by retail stores has spread as far as Israel since The New York Sun reported on the phenomenon in Northern California last week. The Blue Square and Supersol supermarket chains have begun limiting purchases of rice, Israeli newspapers said yesterday. Supersol is restricting each customer to "three bags per type of grain product," the Jerusalem Post reported.
Meanwhile, Asian grocery stores seem to be joining their larger wholesale-style competitors in curbing purchases. A supermarket chain which caters to Chinese Americans, 99 Ranch, is imposing two-bag-per-customer limits on most of its 20-pound and 50-pound sacks of rice, according to signs at its store in Cupertino, Calif. That store and others in the chain were selling rice without limitation a week ago.
Last week, Sam's Club announced it was limiting customers to four bags of imported Jasmine, Basmati, and long grain white rice. Costco had imposed such limits earlier, though they were not widely known until the Sun's report.
Trade associations for rice farmers and processors in America contend there is no shortage here, though prices for the grain have risen two to three times in recent months.
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."
A fast-unfolding food shortage is engulfing the entire world, driving food prices to record highs. Over the past half-century grain prices have spiked from time to time because of weather-related events, such as the 1972 Soviet crop failure that led to a doubling of world wheat, rice, and corn prices. The situation today is entirely different, however. The current doubling of grain prices is trend-driven, the cumulative effect of some trends that are accelerating growth in demand and other trends that are slowing the growth in supply.
The world has not experienced anything quite like this before. In the face of rising food prices and spreading hunger, the social order is beginning to break down in some countries.
