Counter Commodity Security
By Kellene Bishop
To be completely forthright, I wanted to write this particular article first in this particular series. However, I knew that it wouldn’t have as much of an impact if the foundation hadn’t been laid out properly with the previous articles. So think of this article as the cymbal clash that follows your drum roll.
As I’ve shared with you previously, preparedness is not about being ready for an “end of the world” type of scenario. It’s about independence of everyday scenarios. I am positive that if we are prepared to handle everyday scenarios head on, then even when such scenarios are compounded into more alarming, widespread scenarios, then we will also be ready for those as well.
I’m going to assume that most of the world would agree that we are reliant on others for our food sources. Very, very few persons in the world nowadays have the skills or the wherewithal to produce all that they and their family consumes in terms of nutrition. As such, we are reliant on the grocery stores to stock what we want, we are reliant on our paychecks clearing the banks in a timely manner so that we can purchase the food we need; we are reliant on the health inspectors to ensure that we don’t die or get violently ill as a result of the food we eat; we are reliant on the Federal Reserve to make sure that the money which we pay for our foods has sufficient value to buy enough of what we need; we are reliant on transportations flowing smoothly so that we can get our food delivery; and we are reliant upon Mother Nature to nurture and grow the foods that are planted and harvested each year. Frankly, an interruption in any of these areas will not only affect our personal food supply, but because such a snag in a constantly tenable situation would be so widespread, it would also bring with it some dire domino consequences. As you can see, food preparedness is very closely tied to many other areas of preparedness including physical, medical, and financial. This is exactly why I’ve attempted to lay a better foundation for you relative to understanding how tenable the financial world in on an international basis. Because you need to understand that are in order to understand why an imminent true-blue food shortage is about to change your financial world as you know it.
No, I don’t say the words “worldwide food shortage” lightly. I don’t believe in fear mongering, inducing panic, or chaos. That kind of emotional manipulation only helps the retailers of “emergency preparedness” supplies. But what I do believe in is education. If you are able to see the scenario we have before us in it’s proper light, then you are able to calmly, deliberately, and strategically prepare for a more serious scenario.
Food Shortages photo c/o www.foodshortageusa.com
FOOD SHORTAGE—the two words that initially bring about distrust, disgust, and denial in most persons who hear them. And yet even our government officials are blatantly sharing food shortage information with us on the USDA website. The disturbing thing is though that the USDA has such food shortage information on the exact same page in which they are predicting a bumper crop scenario this year. In addition to the USDA reports, there is unlimited, credible, and undeniable information that there will indeed be a food shortage for 2010. Even the mainstream media has dared to share information of the 450% increase in pricing on some standard produce such as tomatoes and green beans due to weather related harvest shortages.
So, why are we sure to experience a food shortage this year?
1) Mother nature has wreaked havoc in several key areas of the world—including in the farming capital of the world, our own Midwestern states. Our spring last year was so wet, causing many farmers to plant later in the year. Unfortunately, the water continued to wreak havoc on the farms as they attempted to harvest their crops. Over 30% of all of our key crops in the Midwest went unharvested due to the wet soil conditions (as in the Mid-west and the South), record droughts (as in Texas) or unexpected freezes (as in Florida). Click here to see article. We are already playing things close in our food supplies this last harvest. We really couldn’t afford a 30% hit.
Tie this in to how it plays out in the financial world, it means that there will be less supply of food in spite of increasing demand. Larger demand for something in short supply requires higher prices. At present circumstances, you food budget may purchase as little as 30 percent less food than it did before but as much as 400% less food than it did before—yup, that means you’ll be in the negative.
2) Several key exporting food nations have experienced the same kinds of shortages who have been some of the key exporters of wheat, rice and other grains. Unfortunately, these nations are having to rely on food IMPORTS this year.
The tie in to this problem as it relates to the financial aspect is the same as #1, except that it pinched not just the pricing, but the plain and simple availability of food. In which case, money won’t make a bit of difference if you don’t even have the commodity around to purchase it.
3) 2009’s early financial crisis. Farmers could not get credit to run their farms properly and certainly not in response to the additional help they needed in the face of adverse weather conditions. As a result, there was drastic drop in the number of crops that were planted.
This means that they are, at the very least, behind one harvest season—and that’s assuming that they were able to make it through this past one in spite of a lack of financial aid. This inhibits the farmers from being able to get ahead by planting enough to make up the financial difference. Unfortunately, the further behind one gets financially, the less likely they are to qualify for financial aid. A lack of farmers definitely means a lack of foods. According to David Miller, Director of Research for Iowa Farm Bureau, as of December 2009, the net farm income was down by one third! He predicts that the drop in income will continue during 2010 as well. In other words, once the farming industry gets behind on food production, it’s unlikely that they can catch up. Our population is ever increasing in the U.S., not going down. Thus the need for food will continue to increase as well. We’re in a vicious downward cycle right now.
fusarium head blight or scab, photo c/o www.ars.usda.gov
4) New insect enemies have begun to infiltrate entire wheat and soybean crops that we do not yet have a suitable weapon for. Officially called a fusarium head blight or scab, it’s more commonly known as “tombstone” because of the white tombstone-like appearance it has on the dead crops. It’s a toxin-infecting fungus that attacks the wheat flowers. The cooler and more moist the growing environment, the more the scabs flourish. Unfortunately the cool, wet weather we’ve had in our crops the last two years have been an expensive weather pattern. The way to combat this problem is to develop wheat strains that are resistant to this disease. Obviously, discovering such requires more than one harvest, and historically requires 4 harvests to be sure. With the present food crisis we have in the world, I’m not sure we have the luxury of waiting through four harvests to get back on our feet.
In addition to this, many parts of the country experienced a dearth of grasshoppers consuming their hay reserves for their livestock. (South Dakota and Wyoming, for example) Considering that many farmers only yielded one-sixth of what they typically do, this was a traumatic setback for many.
Again, the financial consequences of this affect the supply and demand in our food market. Wheat, corn and soy are king in nearly everything we consume in one way or another. Meat needs the nutrition of quality feed and plenty of it. Without proper feed, every aspect of our meal get formidably expensive.
food recall photo c/o lunchbox.hospsrvc.ttu.edu
5) The last two years have brought about the largest number of food recalls ever. And merely 4 weeks ago, we experienced the largest food recall in American history with the salmonella discovered in the manufacturing plant in Las Vegas. This plant was the largest producer of hydrolyzed vegetable protein, which is found in nearly every processed food on the market. As a result, our market got hit with a massive food recall, which also impacts profits of grocers and cash flow for them to be able to provide additional food for their shelves.
Can you see the financial consequences on this one?
6) Gas prices are on the rise again. I don’t know about your neck of the woods, but fuel has risen over 30 cents per gallon in the last two weeks where I am. When I see fuel rising I immediately think of food costs. It takes fuel to harvest, transport, clean, and process food, Folks. With unemployment at record high numbers, accompanied by abysmal inflation, that’s a recipe for a lack of access for many folks to purchase food. If food can’t assuredly be sold off of the shelves before it spoils because folks are having to be more cautious in their spending, then grocery stores will pull back on how much they stock on their shelves so that they don’t have to take the financial hit for spoilage.
7) The wheat and other food reserves have already been exhausted or are inaccessible. China has long bragged that they hold an enormous wheat reserve of over 150 to 200 million tons (2009). But news articles over the last 5 years account for China reducing that reserve is far in excess of what they claimed to have stored. No one can verify today that there is any wheat in reserve in China.
India, which has a burgeoning population growth long bragged about their wheat reserves. Unfortunately, such reserves have been completely exhausted due to stark poverty and agriculture problems and replaced with low quality, rotting wheat instead. Under India’s FCI act, the government is required to purchase all of the wheat, regardless of the quality. Thus, in an attempt to keep up with export contracts, India had to raid their stores of quality wheat and replace them with their poor quality, disease-ridden wheat instead for their own people.
As you know, the U.S. no longer has any wheat reserves. The fact that the dollar has been so soft, makes the importing of U.S. wheat by other countries very attractive as their own currencies remain strong against the U.S. dollar. (See, even they understand that “stuff” is more important than money.)
Argentine dock workers going on strike has made worldwide access to the 3rd largest supplier of soy useless as the soy harvests simply sit in the port until concessions can be made. (A particularly uncomfortable problem for Europe, which is already experiencing a soy shortage due to the South American crops yielding less than normal.) Oh, and did I mention that Argentina is experiencing unusually heavy rains so far this year?
And the financial consequences continue…
Food shortages have many financial affects, including triple digit food inflation numbers. But it’s an impact that very few persons can avoid because we all need to eat, right? The evidence shows that not only will food cost substantially more in 2010, but there will plain and simple be the elimination of food in many aspects.
food harvesting photo c/o www.extension.iastate.edu
The production of food is cyclical. We rely on harvests. Much of our food has been destroyed and thus we cannot create more until the next harvest cycle. Since the U.S. and most other nations have eliminated their “just in case” food supplies as a result of the previous year’s weather and economic related problems worldwide, we simply do not have a back-up plan. That’s why some food will simply not even exist, even if someone did have the money to pay a higher price for it. In fact, it’s in part attributed to the USDA’s false prediction of a bumper crop for the past two years that the U.S. chose to walk the edge of the cliff when they got rid of their excess food supplies and sold them or donated them to hurting countries. The USDA told them that the food they were exporting would be easily replaced by the next two year’s harvests. In fact, they even went so far are to claim that we would have the “largest ever soy crop and the second largest corn crop. Well, here we are, two harvests later, and Mother Nature pulled a fast one on the USDA. In direct contrast to the suspicious predictions by the USDA, we experienced some of the WORST harvests of 25 years!
So, why did the USDA come out right and just plain LIE about the bumper crop predictions? Well, our friends, the Chinese have a lot to do with this one. They are the most heavily invested in our debt and they rely heavily on the U.S. for the food supplies. Remember, money is only as good as what it can purchase, right? So if China relies heavily on our ability to export food to them, then it requires them to play nice with us, right? So it’s important to the USDA anyway, that we keep up the pretense that our food supply is just fine and dandy and capable of keeping up with our own supply and demand as well as that of other nations which rely on us to feed them. Oops. We’re about to be discovered real soon folks. Not just by China (which latest numbers indicated that they own 25% of our foreign debt) but also by Japan, which is at 22% ownership of our foreign debt.
Zimbabwe inflation photo c/o stan.uio.no/
Here’s where the real crisis begins, folks. If China does not get their food needs met by their relationships with nations who are willing to export their foods, then China has no other choice but to DUMP their U.S. currency and debt back into the market so that they can reclaim their own currency (yuan or Renminbi) so that they can purchase “stuff” to feed their nation with instead of just having debt or currency sitting around. What happens if China dumps their debt and currency back into the open market? Our existing currency value will drop way, way down, due to an oversupply in our economic system. What that then means is that the money which we rely on to purchase our own food, will simply not purchase as much as it used to. (Think Zimbabwe—in which they had to brings BAGS of cash just to purchase a loaf of bread)
China drought photo c/o physorg.com
To make matters worse, are you aware that China is experiencing the worst drought ever this year? On March 19, 2010 one of the provinces worst hit by the drought , Guizhou Provice, released a statement claiming that the existing drought has affected 84 counties, cities and other areas within China, with a total affected population of 17.28 million persons. Of that 17.28 million, the report claimed that over 3.1 million people are literally starving from a lack of food. This drought has affected the drinking water supply for over 18 million people as well, including the water necessary for about 12.5 million acres of crop and livestock farms. They claim that over 2.9 million acres of land are already completely destroyed and unsalvageable. So far, this drought has caused a loss of $2.85 billion (US). The leader of the Yunnan Province, another province affected by the drought, told the Bejing News that local citizens in this area should “prepare for the worst.” Does this put China in a vulnerable position in which they are likely to do something desperate in order to protect their greatest asset—their man-power? Of course it does.
So, what does all of this mean to you? It means you need to mitigate your risk of exposure to soaring food costs by purchasing smart NOW. Purchase food that has a long shelf-life with plenty of nutrition. (i.e. freeze-dried produce, whole grains, and canned meats). Utilize coupons as much as possible. While a coupon may only be 50 cents off of an item, the items add up to a sizeable savings—as much as 110%! Even the 50 cents savings on a $3 item is a better return than most of Wall Street is experiencing presently. And forget about the couponing stigma! No one would accuse Warren Buffet of being a “hoarder of stocks” would they? Just because he kept buying stocks that he recognized as being valuable didn’t make him some kind of a crazy, right? Well, the same holds true to those of you who take the initiative in purchasing a commodity that will still have it’s value 5, 10, or even 30 years from now—food. Food prices will NOT be going down. They are only going to keep rising. So mitigate your vulnerable position by investing heavily in quality foods now. There’s a big difference between being a crazy food hoarder and stabilizing your grocery budget over the long-term. At least you can ensure that your money works for you today and years from now in that capacity of your life. Remember, that’s what preparedness is about—eliminating your vulnerabilities and establishing independence.
May your dinner table be independent for decades to come in spite of what Mother Nature or foreign nations throw at you.
If you would like to host a preparedness party for your business, community, or church group, please contact Vicky at vicky@preparednesspro.com
For any questions or comments on this article, please leave a comment on the blog site so that everyone can benefit!
Copyright Protected 2010, Preparedness Pro and Kellene Bishop. All Rights Reserved. No portion of any content on this site may be duplicated, transferred, copied, or published without written permission from the author. However, you are welcome to provide a link to the content on your site or in your written works.
I may sound like a snob saying this, but to be frank, I don’t do fear. Nope, I simply refuse to do it. Any decision made out of fear is usually wrong or at the very least, incomplete. Why would I willingly want to knowingly make wrong decisions when I make perfectly innocent wrong decisions without the nasty toxin of fear added to the heap? Seriously. Fear is underrated. There’s a lot of validity in the saying “The only thing to fear is fear itself.” Bottom line, fear has no place in our lives. Every fear we have, we can conquer and counter with actions which smother it with peace.
I’m just plain fed up with folks saying that the boogey man is coming. For crying out loud, the boogey man is already here, he has been here, and he will always be here. It’s called LIFE. Will it get tougher? Yes; but not because of what will happen. Misery, desperation, and despair only come to those who are not prepared. The intensity of the pain and suffering we endure during our trials is solely contingent upon our level of preparation. Think about it. Do you really think that a multi-billionaire gets upset when he wastes a half gallon of milk? No. Of course not. His level of preparedness is such that such a trial wouldn’t make an impact on him. However, to a single mother of 5 kids, living on her disability checks, spilling the last half gallon of milk you’ve got until the next check comes could be a sorrowful moment. How much we suffer during the tougher events on the horizon is completely up to us! We can be arrogant and obtuse and somehow believe we are more powerful than the law of gravity, or we can decide right now that we are going to minimize our misery by being prepared now! To be blunt, a prepared person does not need to worry about the “boiling water” or the “roller coaster” plunging downward. Even better, a truly prepared person would never utter this fecal diatribe because they would not possess the nature to spew such gloom and doom with persons that they care about. That doesn’t mean that specific aspects of imminent trials should be ignored, not mentioned, and foolishly dismissed. But what it does mean is that we will not allow FEAR to motivate us. Any action we make with fear as our fuel will be rife with disappointments and shortcomings. However, making the many decisions throughout our preparedness efforts from a place of peace, love for others, and a earnest desire to be our best selves in any situation is a perfect formula for success.
Sure, I’ve tried to keep folks up on the reality of things which are taking place. I too believe that there will be a serious financial collapse very soon and I also believe we will be accompanied by a food shortage as well. Even more so, I believe that all of that will occur prior to all of the prophecies in the Book of Revelations being realized. Yeah. The scenario won’t be pretty. But our environment of living, thriving, and loving does not need to be contaminated with fear. Understand that although the scriptures depict some pretty awful scenarios, such events are not shared with us so that we can be scared. Rather, it’s the exact opposite. No one needs to fear what they have suitably anticipated. That’s why, I believe, that we have a glimpse into such scenarios. It’s His way of saying “this is going to happen, but don’t worry so long as you are prepared and follow me.” Where is the fear in that approach? Conversely, I find nothing but beautiful promises in such passages to those who will put away their foolish ways and grow up and get prepared. I think to believe otherwise is to alienate ourselves from the Lord. There is no way, no how, that the Lord shares these things with us to make us FEAR. He’s all about love, patience, kindness, tenderness, and mercy. Granted, He has to live the laws of consequences just like we all have to. He wants to make it clear what playing for the other team will be like—because you can bet that team leader won’t be giving us the straight story. But folks, if we want to stay sane and productive in the midst of all that is coming, FEAR is not the way to do it. Preparedness is.
While I was teaching classes in Vegas this weekend, I had a gal come up to me and share some of her personal stories. One of which was about her daughter who lives in “tornado territory.” The woman shared with me that she was happy her daughter had finally started being mindful about being better prepared. She says that her daughter realized how often they hear tornado warnings and decided to “get on the stick.” The thought that came to my mind after hearing her story was how we ALL have tornado warnings going off all of the time. It’s my hope that we’ll learn to pay attention to them. Keep in mind that a tornado warning isn’t an indicator of death and destruction. It is a warning that now is the time for you to put your preparedness into practice. Thus the fact that we’re hearing the tornado warnings all around us in virtually every aspect of our environment, we are essentially being provided with “dress rehearsals” to help us be ready for the “live performance.” 
