food stockpilling in the us

Influx Insights — 2008-04-28T17:07:12Z

The Daily Show puts the idea that Americans are now hoarding and stockpilling basic supplies like rice, into very sharp focus.

Sam's Club now restricts rice purchases to four bags per visit.

Of course, we know The Daily Show's stock in trade is satire, but the WSJ?

"I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax."

Could Americans be so scared and fearful of rising prices that this Summer we will see mile long lines at gas stations and riots in the grocery aisles over bread, pasta and rice?

Posted by Ed Cotton

Influx Insights Tag Feed: foodinflation

food stockpilling in the us