Help me out here. I know I wrote a few days ago about how the recent emphasis on bio-fuels had pushed the commodity prices of corn, wheat, and rice to skyrocket. At least that is what I intended to write about on April 15. It seems that I quickly digressed and wrote about everything but that it seems. I quipped in the post that I didn't have GPS to give me direction. Well, now I'm trying to see if I have found that direction yet.
Now I see in the headlines that there is a shortage of rice, yes I said shortage of rice. Sam's Club and Costco are going to ration rice. Sam's Club will limit sales of imported jasmine, basmati and long grain white rices in the 20 lb. bag size.
Now rice is a staple in many countries. Rice is also the food that you always seemed to get a lot of at Mexican and Oriental food restaurants. It was always the item that filled up the plate so that it looked like you were getting your "money's worth".
Now why is this happening? I don't know, I'm not an economist. I didn't even stay at a Holiday Inn Express last night. I'm sure that part of the reason is the burgeoning population in countries like India and China. But, don't you think that one of the biggest reasons is the recent emphasis on bio-fuels? I sure do. Think about it. Governments are now trying to push the development of bio-fuels. In order to make many bio-fuels the various grains that were destined to the various levels of the food chain are now being diverted to bio-fuel processors. This doesn't leave enough for livestock and poultry so producers pay more. This cost is passed along to you and I at the store and restaurants. There is not enough grain for the food processors to make the various food products. Producers then pay more for the grain. And yes, this cost is passed on along too. All because the government thinks the answer to more fuel is in the bio-fuel area. The answer is in more drilling and more refining capacity, not suddenly diverting our precious food resources from the food chain into fuel tanks.
Another mistaken answer is the government sticking it's finger into the auto industry by setting mileage per gallon quotas hoping to conserve gasoline. This is a topic for another blog on another day. But briefly, studies have shown that when the mileage per gallon goes up the nation ends up using about the same amount of gasoline because people decide they can now drive more. Also, auto crash death rates go up because auto makers make the cars smaller to meet the guidelines. But as I said, his is a topic for another blog on another day.© 2008 Barry T Horst
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