According to Graham Summer’s of Phoenix Capital, Europe is small potatoes to the REAL crisis which lies closer to home. The U.S. is facing it’s worse drought since 1956 and this means that corn and soy will be in short supply. Recall that when food prices skyrocketed the result was riots in Mexico and Africa. This lead to regime changes in Egypt and Libya. But now the food crisis is beginning to hit closer to home. Corn is used through out our food chain. We consume it directly and we use it to feed chickens, cows and pigs. Almost all of the food we eat has some corn in it. And people are already struggling to put food on the table as evidenced by the S.N.A.P. numbers.
According to Michael Pollan, author of The Omnivore’s Dilemma, corn is in roughly 25% of all items located in your average grocery store. So a corn shortage means BIG TROUBLE for the US when it comes to food.
The situation is equally gloomy for soybeans, the second largest produced crop in the US: today inventories are at their lowest levels in 32 years. And the current drought has resulted in 39% of this year’s soybean crop being in poor to very poor condition.
What does this all mean? That we’re likely heading into a food crisis in the US regarding corn and soybeans.