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Burning up food prices: More corn going to ethanol production now than food production - (Read Full Article)

The world has a food shortage. This isn't speculative or subjective, and it's not fear-mongering or alarmist. It's a well-documented fact and, what's more, the real experts - those who aren't influenced by government or corporate interests - have been trying to make that case for months.

Moreover, these same experts say, the shortages are causing global food prices to rise - dramatically in some cases - which is only leading to more hunger, more pain and more hardship.

So, what is the United States doing to blunt the effects of this food shortage? What is official U.S. policy regarding, say, the production of corn - the primary ingredient in scores of food products and livestock feed? Well, officially, our policy is to burn up a substantial amount of corn every year in our automobiles - food that could be used to feed Americans and the world.

"In the United States, which harvested 416 million tons of grain in 2009, 119 million tons went to ethanol distilleries to produce fuel for cars," says Lester Brown, writing in Foreign Policy magazine in January. "That's enough to feed 350 million people for a year. The massive U.S. investment in ethanol distilleries sets the stage for direct competition between cars and people for the world grain harvest."

The Real Cost Of Food Inflation In America

Take a look at the chart we’ve constructed from the Bureau of Labor and Statistics 2009 Consumer Expenditure Survey. It conveys a sense of how Egypt’s poverty combined with the sharp rise in food prices sparked the political revolt against the Mubarek government.

The chart illustrates how the lower income groups in the U.S. really get squeezed when food and gas prices rise. In the U.S. the average annual income for the consumer units (households) measured is $62,857, where food expenditures consume a little over 10 percent of income.

But averages distort the true picture of what is really going on as only 15 percent of consumer units fit into this income group. Many have drowned in pools of water where the average depth is only 11 inches deep. Almost one third of the households in the U.S. spend close to or more than 20 percent of their annual income on food.

40 Percent Of Egyptians Live On 2 Dollars A Day Or Less And The Global Elite Like It That Way

After thousands of years of “progress” and “societal evolution”, how is it possible that most of the world is still living in soul crushing poverty? In recent days, it has been reported all over the media that 40 percent of Egyptians live on 2 dollars a day or less. Sadly, there are lots of other countries where even larger percentages of the population live in abject poverty. So how in the world did this happen? We can send men into space, we can send electronic communications to the other side of the globe in an instant and we can destroy entire cities with a single bomb and yet we can’t figure out how to set up an economic system that will provide jobs, food and housing for everyone on the planet? That doesn’t seem right. That doesn’t seem right at all.

Is something else going on here? Well, a clue can be found in what is going on in Egypt. The revolution in Egypt has created a vacuum of power, and look who is ready to step in – the usual suspects.

The head of the International Monetary Fund, Dominique Strauss-Kahn, says that the IMF is prepared and ready to “help” rebuild the Egyptian economy.

Dramatic video as thousands clash with Egypt riot police in Cairo

The Egyptian capital Cairo was the scene of violent chaos on Friday, when tens of thousands of anti-government protesters stoned and confronted police, who fired back with rubber bullets, tear gas and water cannons. It was a major escalation in what was already the biggest challenge to authoritarian President Hosni Mubarak's 30 year-rule. They are demanding Mubarak's ouster and venting their rage at years of government neglect of rampant poverty, unemployment and rising food prices.

Grocery prices skyrocket faster than official inflation

Grocery prices increased at more than 50 percent the rate of inflation in 2010, according to data from the U.S. Bureau of Labor Statistics.

Food prices increased an average of 1.7 percent between November 2009 and November 2010, in comparison with a general inflation rate of only 1.1 percent. The greatest price increases were seen among meat, poultry, fish and eggs, which went up in cost by 5.8 percent. The price of sugar and sweets increased 1.2 percent, the price of fats and oils increased 3 percent and the price of dairy-based products increased 3.8 percent.

The only commodities to go up in price more than food were medical care and transportation.

Food costs serve up trouble

Get ready for a rocky year. From now on, rising prices, powerful storms, severe droughts and floods, and other unexpected events are likely to play havoc with the fabric of global society, producing chaos and political unrest. Start with a simple fact: the prices of basic food staples are already approaching or exceeding their 2008 peaks, that year when deadly riots erupted in dozens of countries around the world.

 

It's not surprising then that food and energy experts are beginning to warn that 2011 could be the year of living dangerously - and so could 2012, 2013, and on into the future. Add to the soaring cost of the grains that keep so many impoverished people alive a comparable rise in oil prices - again nearing levels not seen since the peak months of 2008 - and you can already hear the first rumblings about the tenuous economic recovery being in danger of imminent collapse. Think of those rising energy prices as adding further fuel to global discontent.