Food shortages... stage 1

Here we go

Already feeling the pinch from soaring wheat and flour prices, U.S. bakers are now beginning to experience some supply shortages.

Rye flour stocks have been depleted in the United States, and by June or July there will be no more U.S. rye flour to purchase, said Lee Sanders, senior vice president for government relations and public affairs at the American Bakers Association.

"Those that are purchasing it now are having to purchase it from Germany and the Netherlands, and that's very concerning," Sanders said.

She attributed the shortage to high demand for rye flour, which is used to make rye bread, and less acreage devoted to rye grain than in the past.

Grain prices have been soaring worldwide while stocks have been dwindling, causing riots in some poor countries.

In the United States concern is also growing over food costs. The chief executive of Costco Wholesale Corp (COST.O: Quote, Profile, Research), James Sinegal, told Reuters that the company is seeing some unusual buying with consumers stocking up as they fret shortages.

From the WSJ

Food-related protests have been occurring worldwide, and in the U.S. now major discounters are seeing runs on products, particularly rice, as both Sam’s Club, the Wal-Mart Stores Inc. operated discounter, and Costco Wholesale Corp. have seen shelves cleaned out of rice as consumers worry about higher prices. “It is just unreal what can happen when we get fear being spread as it is now, and when the general populace goes out and starts doing idiotic things like lining up at the Sam’s Club and the Costco and not buying one bag but buying 10 bags just because they might run out,” says Neauman Coleman, introducing broker at Neauman Coleman & Co. in Brinkley, Ark. Sam’s Club has decided to put limits (or rations, if you will) on the amount of 20-pound bags customers can purchase every week, and Costco earlier this week said it was considering such limits as well, which in a way is just as panicky a response. Even though July rough rice futures closed up 62 cents to $24.82 per hundredweight on the Chicago Board of Trade, Mr. Coleman says inventory figures show that the U.S. still has plenty of rice (this country exports a good deal of its rice), so the bubble-nature of this grain will recede over time. “It’s fear and panic and pandemonium,” he says.