We have all been sticker shocked by the recent sharp rise in food prices. It seems that every time we go to the supermarket, prices just keep going up and up.
One wonders, on an aggregate level, just how high food prices have gone compared to historical norms. Furthermore, how will high food prices affect culture not only in the US but around the world? Is a global food crisis coming that could culminate in social conflict? Even food riots?
The FAO Food Price Index (FFPI) is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices weighted by the average export shares of each of the groups over 2014-2016.
A feature article published in the June 2020 edition of the Food Outlook presents the revision of the base period for the calculation of the FFPI and the expansion of its price coverage, to be introduced from July 2020. A November 2013 article contains technical background on the previous construction of the FFPI. Monthly release dates for 2022: 6 January, 3 February, 4 March, 8 April, 6 May, 3 June, 8 July, 5 August, 2 September, 7 October, 4 November, and 2 December.
See the latest June 2022 release in the chart below and learn more here.
The orange line above is the unadjusted inflation price, and the yellow indicates the inflation-adjusted price of this index. A point to be understood here is that the inflation-adjusted index shows that it is at a 62-year high and is about 50% higher than the historical average of 100.
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Statista points out a link between these heightened food prices and potential political unrest. The Russian war in Ukraine has had immediate repercussions on global food markets given the countries’ role as major exporters of essential agricultural products, such as wheat, sunflower oil, barley, and corn, while also affecting perishable foods like fruits and vegetables.
In the past, similar surges in the price of food have led to unrest, mostly in developing countries, and even coincided with the Arab Spring in 2011, when populations in North Africa and the Middle East were cornered by oppressive regimes and feeling the additional squeeze on their livelihoods due to high prices rose up and toppled several regional regimes. The current level of food prices is even surpassing the peaks observed in 2011 and 2008, when food and other prices rose dramatically, causing unrest in several African countries as well as in Bangladesh, Haiti, Indonesia, and Yemen. The onset of the global financial crisis put an end to the price surge that year.
In the current situation, Human Rights Watch has warned that a food crisis could hit North Africa and the Middle East again, as several countries in the region are major importers of Russian or Ukrainian food products. According to Cornell University economics professor Chris Barrett, the potential for unrest is again heightened. As of early June, food prices had already fueled protests all over the world, including in Asia, Africa, the Middle East, Latin America, and Europe. See this linkage in the chart below.
Is a coming food crisis coming? Well, our elite overlords seem to think so. UN Secretary-General António Guterres said the war in Ukraine has added to the disruptions caused by climate change, the COVID-19 pandemic, and inequality to produce an “unprecedented global hunger crisis” already affecting hundreds of millions of people. Former Trump Deputy National Security Adviser KT McFarland says a major food shortage is coming in the next few months – see video below.
But you may believe this only happens in far away third world countries. No doubt that a 50% increase in your food budget is less severe in Western countries than in third world countries, but what happens when you can’t get food at any price – such as we have seen recently with Tampons and baby formula? Remember (see video below) what Americans did when they couldn’t get toilet paper?
Could not only higher food prices and/or food shortages cause food riots in America? What would Americans do if they really got hungry?
Do we have any confidence that our current government leaders could manage a potential situation like this?
By Tom Williams at Right Wire Report
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