<H1>"Could we really run out of food?</H1> <DIV class=region8 id=area2> <DIV class=myabstract>Biofuel production, poor harvests and emerging nations' growing appetites are emptying the world's pantry, sending prices soaring. It's a good time to invest in agricultural stocks."<BR></DIV></DIV> <DIV> </DIV> <DIV> </DIV> <DIV>See, you all thought I was fat. But in reality, I was just saving for a future food shortage. Now I need to find that 30 lbs I lost, I know I left in the kitchen some where. : )</DIV> <DIV> </DIV> <DIV>Best Regards,</DIV> <DIV> </DIV> <DIV>Donovan<BR><BR><B><I>donald edwards <donaledwards@hotmail.com></I></B> wrote:</DIV> <BLOCKQUOTE class=replbq style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #1010ff 2px solid"> <STYLE> .hmmessage P { margin:0px; padding:0px } body.hmmessage { FONT-SIZE: 10pt; FONT-FAMILY:Tahoma } </STYLE> <H1><FONT size=2>Now what was it that Garrett was saying here a few days
ago?</FONT></H1> <H1> </H1> <H1>Could we really run out of food?</H1> <DIV class=region8 id=area2> <DIV class=myabstract>Biofuel production, poor harvests and emerging nations' growing appetites are emptying the world's pantry, sending prices soaring. It's a good time to invest in agricultural stocks.<BR></DIV> <DIV class="parent chrome1 single1" id=articleBody> <DIV class="child c1 first"> <DIV class=segment> <DIV class="insert chrome1 right" id=adslot> <DIV class=first id=mktUpdate> <H5>Latest Market Update</H5> <DIV id=briefing_com name="briefing_com">March 06, 2008 -- 15:40 ET [BRIEFING.COM] Stocks recently found new session lows and continue to trade in choppy fashion. The major indices remain well into the red.<BR>Healthcare (-1.9%) has trended lower since the opening bell. The sector has been dragged... <A href="http://moneycentral.msn.com/investor/market/home.asp"><FONT color=#07519a>More</FONT></A><BR></DIV><xml ondatasetcomplete="var bd =
this.firstChild; briefing_com.innerHTML = bd.selectSingleNode( '/cp:headlines/cp:link/cp:text' ).text + ' <a href=' + bd.selectSingleNode('/cp:headlines/cp:link/cp:url').text + '>More</a>';" src="http://articles.moneycentral.msn.com/Feeds/XML/MarketUpdate.aspx"></xml></DIV> <DIV id=adCall> <DIV class=ad> <H6><A onclick=" this.href='http://digg.com/remote-submit?phase=2&url='+ document.location.href +'&title=SuperModels&bodytext=SuperModels&topic=Business_finance'; " href="http://articles.moneycentral.msn.com/Investing/SuperModels/Digg%20This" target=_blank><FONT color=#07519a></FONT></A> </H6></DIV></DIV></DIV> <DIV class=detail><CITE>By <A href="http://articles.moneycentral.msn.com/Commentary/Experts/Markman/Jon_Markman.aspx"><FONT color=#07519a>Jon Markman</FONT></A></CITE> </DIV> <DIV class=detail>As if a bear market, credit crunch, energy crisis and city financing
emergency were not enough for one year, experts say the world is now facing down the barrel of the worst catastrophe of all: famine. </DIV> <DIV class=detail>The very idea that the modern world could run out of food seems ludicrous, but that is the flip side, or cause, of the tremendous recent increase in the cost of raw wheat, corn, rice, oats and soybeans. Food prices are not escalating because speculators have run them up for sport and profit, but because accelerating demand in developing nations, biofuel production and poor harvests in some areas have made basic foodstuffs truly scarce.</DIV> <DIV class=detail>In energy circles, folks who warn about the beginning of the end of cheap fossil fuels talk about "peak oil" as a point we have dangerously and expensively crossed. Likewise, you can now add "peak wheat" to your political and investment lexicon. And it's a lot worse. <H2 class=detail>Food fighting </H2> <DIV class=detail>One can always move closer to work to
cut down on gasoline. But be forced to eat less toast, beer and steak? Them's fightin' words. </DIV> <DIV class=detail></DIV> <DIV class=detail>Wheat futures prices have tripled since 2004, corn prices have almost tripled since 2005, and soybeans have tripled since 2006. Meanwhile, crude oil is up merely 60% in the past three years, which makes it seem very bearable in comparison. U.S. stock prices have barely eked out a 10% advance since 2005, underscoring the diminishment of our buying power. A large pepperoni pizza these days costs about as much as a share of <SPAN class=qlink><STRONG>Citigroup</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=C"><FONT color=#07519a>C</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=C"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=C"><FONT color=#07519a>msgs</FONT></A>)</SPAN>. Citigroup finished Wednesday at
$22.15.</DIV> <DIV class=detail>This is no joke, already, in Asia. Rice prices surged to a 20-year high this week -- more than $18 per hundred pounds -- as countries that have the most are hoarding it for their own people. Vietnam, India and Egypt have restricted exports to keep local markets stocked. Thai, Philippine and Indonesian officials are warning of civil unrest if the flow of rice does not increase.</DIV> <DIV class=detail> </DIV> <DIV class=detail><FONT color=#07519a></FONT></DIV> <DIV class=detail>Russia, Ukraine and Kazakhstan in recent weeks have restricted wheat exports as well, slapping on big tariffs to make sure shelves are stocked in their homelands amid soaring prices. A major Russian grains-company chief told Reuters that his country "is in a condition that has never happened before." Higher prices are not meeting any resistance from desperate buyers.</DIV> <DIV class=detail>Most unusual about this phenomenon, according to BMO Financial Group
strategist Don Coxe, is that until now, food crises in world history were regional concerns that arose from crop failures, war or pests. Once global trade of grains got going in the 19th century in a major way, food shortages in one country were ameliorated by imports, he said. What's happening now is a lack of supply everywhere at once.</DIV> <DIV class=detail style="PADDING-RIGHT: 0in; MARGIN-TOP: 0in; PADDING-LEFT: 0in; MARGIN-BOTTOM: 0pt"><A href="http://moneycentral.msn.com/community/message/thread.asp?board=womeninred&threadid=543106"><FONT color=#07519a></FONT></A> </DIV> <DIV class=detail><FONT color=#07519a></FONT></DIV> <DIV class=detail>Culprits abound, but chief among them is urbanization, which has cut the amount of acreage devoted to farming. The United Nations reports that the total area devoted to crops worldwide had risen by 0.3% annually since 1961, to 3.8 billion acres through the latest survey. But the growth has stalled to 0.1% annually in
the past decade. Unlike energy, you can't drill deeper in the ocean or under Arctic tundra for more food. </DIV> <DIV class="parent chrome5 double1 cf" id=relatedresources> <H2><BR>One key way to increase agricultural supply and reduce prices is by improving seed technology. So if you want to profit from rising prices, notes MSN Money's Jim Jubak, your best bets may be seed companies</H2></DIV> <DIV class=detail></DIV> <DIV class=detail>Also, surging income growth among emerging middle classes in China, India, Southeast Asia and South America has boosted demand for meat protein, and feed for new Asian cattle ranches and pig farms is putting intense pressure on the world's corn supply. Of course, the weather plays a role, too. A terrible drought in the breadbasket of Australia over the past two years has combined with bad harvests in Argentina and Brazil to create some of today's shortfall. <H2 class=detail>Empty global cupboards </H2> <DIV class=detail>Shortages are
real. The Financial Times reports that rice stocks have fallen this year to about 70 million tons, the lowest level in 25 years and less than half the total held in global inventories in 2000. Wheat inventories, called "carry-overs" in the trade, are at 30-year lows even though world wheat production was actually up 1% last year. In the past year, reports show, wheat inventories in the European Union have plunged to 1 million tons from 14 million tons. </DIV> <DIV class=detail></DIV> <DIV class=detail>A leading Canadian fertilizer executive told analysts recently that according to his company's calculations, global grain reserves are "precarious," at just 1.7 months of consumption, down from 3.5 months of reserves as recently as 2000.</DIV> <DIV class=detail> </DIV> <DIV class=detail>Now the really bad news is that we might actually have been lucky in the past few years, as global warming has lengthened growing seasons in the American Plains, sometimes called the
Saudi Arabia of corn. BMO's Coxe notes that the U.S. Midwest has enjoyed 17 straight years without significant crop failure, the longest winning streak on record. If this fortunate run ends soon, we'll likely face a worldwide crisis.</DIV> <DIV class=detail>Some researchers, including climatologist Elwyn Taylor of Iowa State University, believe it could happen this year, as La Niņa conditions are emerging at a time when the Midwest has become vulnerable due to a drought creeping up from the South.</DIV> <DIV class=detail> <UL style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" type=disc> <LI style="PADDING-RIGHT: 0in; MARGIN-TOP: 0in; PADDING-LEFT: 0in; MARGIN-BOTTOM: 0pt"><STRONG>Talk back: </STRONG><A href="http://moneycentral.msn.com/community/message/thread.asp?board=womeninred&threadid=543106"><FONT color=#07519a>How are you keeping your grocery bills down?</FONT></A></LI></UL></DIV><FONT color=#07519a></FONT><BR>Food prices are already way up in America but not as
much as feed prices because manufacturers, processors and retailers such as <SPAN class=qlink><STRONG>Wal-Mart Stores</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=WMT"><FONT color=#07519a>WMT</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=WMT"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=WMT"><FONT color=#07519a>msgs</FONT></A>)</SPAN> have found ways to hold the line by cutting expenses. But they can dam up the flood of food inflation for only so long. Just this week, <SPAN class=qlink><STRONG>Procter & Gamble</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=PG"><FONT color=#07519a>PG</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=PG"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=PG"><FONT color=#07519a>msgs</FONT></A>)</SPAN>
announced it was raising prices on many of its foods products, including Folgers coffee. J&J Snack Foods said it would lift prices by as much as 12% in April to offset costs, and local newspapers have been rife with stories about pizzerias both raising prices and cutting back on crust thickness and cheese quantities.<BR>Joseph R. Dancy, who teaches law at Southern Methodist University and runs a small hedge fund, lays the immediacy of the crisis directly on ethanol-production mandates in an energy bill recently passed by Congress. The bill, intended to boost America's energy independence, is expected to push as much as 31% of the U.S. corn crop into biofuels production, up from 24% last year. In other words, at the exact moment we most need corn on our plates, it is being funneled into cars. A full tank of gas requires the equivalent of a quarter of a ton of raw foodstuffs, enough to feed one person bread for a year.<BR> <DIV class="parent chrome5 double1 cf"
id=relatedresources> <H2> <DIV class="child c2 last"></DIV><FONT color=#07519a></FONT><BR>Coxe's solution: As a first step, shut down all ethanol plants immediately. "It's criminal to burn corn for fuel when we are out of food," he said. In a particularly pernicious development, he noted that a big boost in demand for soybeans for use as biodiesel in Europe has driven up the price of palm oil in Southeast Asia, where it is the main source of protein for the poor. </H2></DIV>If global famine is one bad crop away, then surely there is an investment angle. On dips, the companies to focus on are mostly the same as I described in my year-opening column, "<A href="http://articles.moneycentral.msn.com/Investing/SuperModels/10MarketPredictionsForAGlum08.aspx"><FONT color=#07519a>10 market predictions for a glum '08</FONT></A>:" Seed innovators <SPAN class=qlink><STRONG>Monsanto</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=MON"><FONT
color=#07519a>MON</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=MON"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=MON"><FONT color=#07519a>msgs</FONT></A>)</SPAN> and <SPAN class=qlink><STRONG>Syngenta</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=SYT"><FONT color=#07519a>SYT</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=SYT"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=SYT"><FONT color=#07519a>msgs</FONT></A>)</SPAN>; fertilizer makers <SPAN class=qlink><STRONG>Potash of Saskatchewan</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=POT"><FONT color=#07519a>POT</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=POT"><FONT color=#07519a>news</FONT></A>, <A
href="http://moneycentral.msn.com/community/message/board.asp?Symbol=POT"><FONT color=#07519a>msgs</FONT></A>)</SPAN>, <SPAN class=qlink><STRONG>Mosaic</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=MOS"><FONT color=#07519a>MOS</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=MOS"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=MOS"><FONT color=#07519a>msgs</FONT></A>)</SPAN>, <SPAN class=qlink><STRONG>CF Industries</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=CF"><FONT color=#07519a>CF</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=CF"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=CF"><FONT color=#07519a>msgs</FONT></A>)</SPAN> and <SPAN class=qlink><STRONG>Agrium</STRONG> (<A
href="http://moneycentral.msn.com/detail/stock_quote?Symbol=AGU"><FONT color=#07519a>AGU</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=AGU"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=AGU"><FONT color=#07519a>msgs</FONT></A>)</SPAN>; tractor maker <SPAN class=qlink><STRONG>Deere</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=DE"><FONT color=#07519a>DE</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=DE"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=DE"><FONT color=#07519a>msgs</FONT></A>)</SPAN>; and, for exposure to the food futures themselves, the exchange-traded funds <SPAN class=qlink><STRONG>PowerShares DB Agriculture</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=DBA"><FONT color=#07519a>DBA</FONT></A>, <A
href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=DBA"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=DBA"><FONT color=#07519a>msgs</FONT></A>)</SPAN>, <SPAN class=qlink><STRONG>iPath AIG Agriculture</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=JJA"><FONT color=#07519a>JJA</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=JJA"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=JJA"><FONT color=#07519a>msgs</FONT></A>)</SPAN> and <SPAN class=qlink><STRONG>iPath AIG Grains</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=JJG"><FONT color=#07519a>JJG</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=JJG"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=JJG"><FONT
color=#07519a>msgs</FONT></A>)</SPAN>. <BR>Some additional small caps to consider are equipment retailer <SPAN class=qlink><STRONG>Titan Machinery</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=TITN"><FONT color=#07519a>TITN</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=TITN"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=TITN"><FONT color=#07519a>msgs</FONT></A>)</SPAN>, irrigation-equipment maker <SPAN class=qlink><STRONG>Lindsay</STRONG> (<A href="http://moneycentral.msn.com/detail/stock_quote?Symbol=LNN"><FONT color=#07519a>LNN</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=LNN"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=LNN"><FONT color=#07519a>msgs</FONT></A>)</SPAN> and processing-machine maker <SPAN class=qlink><STRONG>Key Technology</STRONG> (<A
href="http://moneycentral.msn.com/detail/stock_quote?Symbol=KTEC"><FONT color=#07519a>KTEC</FONT></A>, <A href="http://news.moneycentral.msn.com/ticker/rcnews.asp?Symbol=KTEC"><FONT color=#07519a>news</FONT></A>, <A href="http://moneycentral.msn.com/community/message/board.asp?Symbol=KTEC"><FONT color=#07519a>msgs</FONT></A>)</SPAN>. <BR>I guess this gives a new meaning to the term "seed capital."<BR> <DIV class="parent chrome5 double1 cf" id=relatedresources> <H2><BR>One key way to increase agricultural supply and reduce prices is by improving seed technology. So if you want to profit from rising prices, notes MSN Money's Jim Jubak, your best bets may be seed companies</H2></DIV> <H2>Fine print </H2>Coxe has published a book summarizing his view of investment bubbles and declines called "<A href="http://shopping.msn.com/prodlink.aspx?ptnrid=18&ptnrdata=24001&AltType=ISBN&AltValue=0071450912"><FONT color=#07519a>The New Reality of Wall Street</FONT></A>." .
. . To learn more about law professor Dancy, visit his <A onclick="return Msn.Navigation.OpenNew(this)" href="http://www.financialsense.com/fsu/editorials/dancy/archive.html"><FONT color=#07519a>Web site</FONT></A>. . . . To keep an eye on commodity futures prices, visit <A onclick="return Msn.Navigation.OpenNew(this)" href="http://www.bloomberg.com/markets/commodities/cfutures.html"><FONT color=#07519a>here</FONT></A> or <A onclick="return Msn.Navigation.OpenNew(this)" href="http://www2.barchart.com/mktcom.asp?code=BSTK"><FONT color=#07519a>here</FONT></A>. The Chicago Board of Trade has a great <A onclick="return Msn.Navigation.OpenNew(this)" href="http://www.cbot.com/cbot/pub/page/0,3181,963,00.html"><FONT color=#07519a>page summarizing the action</FONT></A>. <A onclick="return Msn.Navigation.OpenNew(this)" href="http://www.usda.gov/wps/portal/usdahome"><FONT color=#07519a>The U.S. Department of Agriculture Web site</FONT></A> has pages and pages of material to help you
get up to speed, such as <A onclick="return Msn.Navigation.OpenNew(this)" href="http://www.ers.usda.gov/Briefing/Wheat/"><FONT color=#07519a>this one</FONT></A> on wheat. . . . <BR><BR>I previously wrote about ethanol as bad public policy on Feb. 10 in a <A href="http://blogs.moneycentral.msn.com/topstocks/archive/2008/02/10/ethanol-myth-blasted-in-new-science-mag.aspx"><FONT color=#07519a>blog item</FONT></A> and on Oct. 11, 2007, in a column, "<A href="http://articles.moneycentral.msn.com/Investing/SuperModels/ShuckTheEthanolAndLetSolarShine.aspx"><FONT color=#07519a>Shuck the ethanol and let solar shine</FONT></A>." I wrote about the corn boom last April 5 in "<A href="http://articles.moneycentral.msn.com/Investing/SuperModels/InvestorsBiteIntoTheCornRush.aspx"><FONT color=#07519a>Investors bite into the corn rush</FONT></A>." <BR> <DIV class="parent chrome3 cf" id=newsletterinsert> <DIV class="child c1 first"></FORM> <FORM name=newsletter method=get> </FORM>
<FORM id=aspnetForm onkeydown=blockEnter(event); name=aspnetForm action=EditMessageLight.aspx?n=506336886 method=post encType=multipart/form-data></DIV></DIV><BR><EM>At the time of publication, Jon Markman owned shares of Monsanto, Potash of Saskatchewan, Mosaic, CF Industries, Agrium, Lindsay, Powershares DB Agriculture, iPath AIG Agriculture and iPath AIG Grains.</EM><BR><BR></DIV></DIV></DIV></DIV><BR> <HR> Shed those extra pounds with MSN and The Biggest Loser! <A href="http://biggestloser.msn.com/" target=_new>Learn more.</A> =======================================================<BR>List services made available by First Step Internet, <BR>serving the communities of the Palouse since 1994. <BR>http://www.fsr.net <BR>mailto:Vision2020@moscow.com<BR>=======================================================</DIV></DIV></BLOCKQUOTE><BR></FORM><p> 
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