You may recall that I posted something last month about how we couldn’t find any bread flour at our local Sam’s Club. I found it odd, and wondered if it had anything to do with the economic/oil/food crisis we are slip-sliding into, or if it was just a hiccup in the supply chain.
It appears that shortages may, in fact, be to blame:
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.”
[snip]
An employee at the Costco store in Queens said there were no restrictions on rice buying, but limits were being imposed on purchases of oil and flour. Internet postings attributed some of the shortage at the retail level to bakery owners who flocked to warehouse stores when the price of flour from commercial suppliers doubled.
The curbs and shortages are being tracked with concern by survivalists who view the phenomenon as a harbinger of more serious trouble to come.
“It’s sporadic. It’s not every store, but it’s becoming more commonplace,” the editor of SurvivalBlog.com, James Rawles, said. “The number of reports I’ve been getting from readers who have seen signs posted with limits has increased almost exponentially, I’d say in the last three to five weeks.”
[snip]
Spiking food prices have led to riots in recent weeks in Haiti, Indonesia, and several African nations. India recently banned export of all but the highest quality rice, and Vietnam blocked the signing of a new contract for foreign rice sales.
“I’m surprised the Bush administration hasn’t slapped export controls on wheat,” Mr. Rawles said. “The Asian countries are here buying every kind of wheat.” Mr. Rawles said it is hard to know how much of the shortages are due to lagging supply and how much is caused by consumers hedging against future price hikes or a total lack of product.
“There have been so many stories about worldwide shortages that it encourages people to stock up. What most people don’t realize is that supply chains have changed, so inventories are very short,” Mr. Rawles, a former Army intelligence officer, said. “Even if people increased their purchasing by 20%, all the store shelves would be wiped out.”
This is a complex situation that involves problems stemming from drought, production, fuel prices, exports, the rush to produce corn for ethanol (in lieu of other crops) and more.
Where we end up, however, is difficult to predict. In a global economy without limits, we face real problems when our oil and tech imports are suffering rising prices, but we have no controls on our agricultural exports. Americans are getting the shaft while places like China - which is benefitting from the weak dollar on the goods exported to the U.S., but is also benefitting by buying up massive quantities of American wheat - are prospering.
Whether the trend is short-term or not remains to be seen. All the same, it’s something worth keeping an eye on.
