Food Prices Will Rise

I have repeatedly argued that - even if deflation continues - food prices might rise dramatically. See this, this and this.

In March:

Wholesale food prices ... rose 2.4%, matching the biggest gain in 26 years. Prices of fresh and dried vegetables soared 49.3%, the most in 16 years. Prices of seafood, meat and dairy goods also rose.

In addition, the oil spill will cause higher food prices. Initially, there is the loss of substantial portions of the fisheries and shrimping in the Gulf Coast. See this and this.

Moreover, the disruption of shipping lanes will drive up prices.

As AP notes:

Besides the immediate impact on Gulf industries, shipping along the Mississippi River could soon be limited. Ships carrying food, oil, rubber and much more come through the Southwest Pass to enter the vital waterway.

Shipment delays — either because oil-splattered ships need to be cleaned off at sea before docking or because water lanes are shut down for a time — would raise the cost of transporting those goods.

"We saw that during Hurricane Katrina for a period of time — we saw some prices go up for food and other goods because they couldn't move some fruit down the shipping channels and it got spoiled," PFGBest analyst Phil Flynn said.

The oil spill is not the only environment catastrophe which could increase prices.

Bee colonies are also collapsing worldwide. As the Guardian notes:

Disturbing evidence that honeybees are in terminal decline has emerged from the United States where, for the fourth year in a row, more than a third of colonies have failed to survive the winter.

The decline of the country's estimated 2.4 million beehives began in 2006, when a phenomenon dubbed colony collapse disorder (CCD) led to the disappearance of hundreds of thousands of colonies. Since then more than three million colonies in the US and billions of honeybees worldwide have died and scientists are no nearer to knowing what is causing the catastrophic fall in numbers.

The number of managed honeybee colonies in the US fell by 33.8% last winter, according to the annual survey by the Apiary Inspectors of America and the US government's Agricultural Research Service (ARS).

The collapse in the global honeybee population is a major threat to crops. It is estimated that a third of everything we eat depends upon honeybee pollination, which means that bees contribute some £26bn to the global economy.

As the Guardian notes, the problem might be a combination of pesticides and nutrition:

US scientists have found 121 different pesticides in samples of bees, wax and pollen, lending credence to the notion that pesticides are a key problem. "We believe that some subtle interactions between nutrition, pesticide exposure and other stressors are converging to kill colonies," said Jeffery Pettis, of the ARS's bee research laboratory.

Indeed:

• Bees spend most of their lives being trucked all around the country in boxes
  

• While being trucked around, bees are fed a diet of high-fructose corn syrup (and soy protein), not real pollen (see also this).

To recap: bees are fed junk food totally different from what bees naturally eat with very little nutritional content, taken out of their normal natural environment and shoved into trucks, and then driven all over the nation.

The poor nutrition, exposure to numerous pesticides (and genetically modified foods), and stressful condition of being constantly trucked all over the country are hurting the bees. Why do beekeepers do it? Because high-fructose corn syrup and soy protein are cheap junk, and because the widespread use of pesticides coupled with trucking bees around the country is the low-cost industrial farming business model.

The bottom line is that raising and using bees to pollinate crops in a way that won't kill so many bees will be more expensive ... thus driving up food prices.

Update: See this.