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U.S. Food Shortages

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food rationing

An article in the New York Sun last Monday reported food rationing at “big box” warehouse stores like COSTCO and Sam’s Club (‘Food Rationing Confronts Breadbasket of the World‘). A media frenzy has developed about spot shortages of staples such as rice, flour, and cooking oil. Here’s a small sample:

Reuters: ‘Wal-Mart’s Sam’s Club limits rice purchases

Washington Times: ‘Americans hoard food as industry seeks regulations

FOX News: ‘Food Shortage Coming? No Rice For You

Wall Street Journal : ‘Load Up the Pantry’

If the WSJ is getting in on the act, you feel that things may be reaching a tipping point. Typically, the article proposes food stockpiling, not as a survival tactic, but as an investment opportunity, citing food inflation figures considerably higher than rates of return on conventional investments.

Recent shortages and jumps in food prices are global, driven by increased fuel costs, the Ug99 wheat rust threat and drought-hit harvests in Australia. The U.S. has been exporting large quantities of wheat and rice to Asia over the last 6 months to take up the slack. Inevitably, this is having a knock-on effect on consumers at home. The COSTCO and Sam’s Club warehouses where rationing has been reported are the hunting ground of commercial bakeries and restaurants as well as individual ‘cash and carry’ buyers of relatively large quantities of rice and flour. Local shortages may be due to supply problems; failure to keep up with price increases, making ‘big box’ stores cheaper than wholesale; stockpiling as a hedge against inflation.

In the short term, we can see this as a failure of ‘just in time’ supply chains to cope with a spike in demand. The U.S. government will probably move to restrict exports of wheat and rice, or ban them altogether. Once everyone who wants to boost their store cupboard has done so, and the supply chains have caught up, it’ll be back to business as usual. Probably.

That’s the short term. What happens after that is a different kettle of worms.

Culinary note: ‘Properly prepared, worms can be a tasty source of protein

Afterword April 23rd, Sam’s Club issued the following statement:

“We currently have plenty of rice for Sam’s Club Members. However, like our competitors, we’re just taking the precautionary step of limiting sales of the very large 20 pound bags of imported jasmine, basmati and long grain white rices, in our case, to four per member. This temporary restriction does not apply to retail-sized rice for sale in Sam’s or elsewhere at Wal-Mart stores. It also doesn’t apply in New Mexico or Idaho.

“On average, a typical Sam’s Club Business Member does not buy more than 80 pounds of rice in one visit. This temporary cap is intended to ensure there is plenty of rice for all our members. No other items are affected.”


Written by Pete Smith

April 24, 2008 at 10:38 am

One Response

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  1. It’s all kicking off;


    April 24, 2008 at 12:31 pm

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