Steve McDonald (who edits The Bond Trader) says the last food price jump will pale compared to the one that’s coming.

The food price spike that ended in 2008 was a doozy – rice up over 200%, wheat up 130%, and soybeans up as much as 100%.

That’s saying something.

The next food price jump will last 2-3 decades, and it’ll look a lot different from the food price spikes we’re used to. It won’t depend as much on high fuel prices and a spike in grain speculation. There are other factors at work...

* Drought in the U.S. Reservoirs in California, for example, are at 50% capacity.

* The worst drought in northern China in 50 years. As a result, China’s wheat harvest is down 63%.

* Farmers holding back on spending because of low food prices and the difficulty in getting loans
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But the mother of all trends pushing up food prices is the growth of the middle class in developing countries. China has to build the equivalent of two Detroits every year just to keep up with its growing urban population.

Steve spells out how this affects global food consumption: "The emerging middle classes are eating more meat. But it takes seven pounds of grain to raise a pound of beef. And now 40% of the world’s production of grains goes to feedstock."

It makes more sense to take the seven pounds of grain that go toward raising a pound of beef and turn it into whole grain products to feed the people who will otherwise starve.

-- Fred Pulver

www.macrobiotic.org