Wednesday, July 25, 2012

Food Inflation May Rise to 3% to 4% in 2013 After Drought

There a myriad of reasons why we will have food inflation, in addition to the current drought.  There are two other reasons few understand:  the bankruptcies of MF Global and Peregrine--and subsequent theft of client segregated funds.  Many of these clients included farmers hedging their crops and livestock.  With their funds dissipated from the fraud, the crop and feed shortages will become more acute going forward.  It takes money to grow crops:  for seed, fertilizer, labor, machinery, water, and land.  No money, no honey.

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