Tuesday, February 23, 2010

Food: shortage or just too expensive to buy?


Thank you for such an informative and honest blog.

I would like to ask you about the food situation during the economic collapse in Argentina in relation to what's to the situation here in the US. Due to the subpar farming seasons (in the US) this past year, there have been produce shortages to an extent in which many are saying that a major food shortage is coming. Prices obviously have went up.

However, some recent economic forecast articles I've come across have stated that there will be no food shortage, people just won't be able to afford it. I think it will be a combination of both.

What can we expect?



Hi Pers, thanks for your email.

That’s correct, Argentina produces food for 300.000.000 people (Maybe half of that these days, after the Farmers Crisis), and we have a population of 44.000.000. Why do 10 to 20 kids die of starvation each day then? As you well say, people can’t afford food, or they can only afford food of poor nutrition quality.
People need to understand that for every complex problem, there is an answer that is clear, simple... and wrong.

Go to any of these countries where there’s children dropping dead of starvation like flies, there’s always an elite that lives a good fat life. There’s restaurants where you can drop by and eat nicely… and cheap too!

Pick you favorite dirt poor African country and when you visit the capital district you’ll find a different reality. The dumb tourist may ask himself, “Dear God, why do people starve to death in this wonderful place when you can eat a fancy dinner in a restaurant for 5 dollars? I wish New York had joints like these!”

Some people are extremely poor. Argentina is of course not the worst example, but you still have to keep in mind that 50% o the population is still poor and 20% is BELOW the poverty line, meaning they cant afford to purchase the necessary calories do develop the daily activities. These are the ones that are seen begging on the fancy avenues, eating out of the trash of the McDonalds in the Capital and sububs, and yes, slowly dieing in provinces like Tucuman, Santiago del Estero or Salta.

There are cases in history where simply no food was to be found, but in most cases your other assumption is correct: People just cant afford the food. That’s the problem.
This is why having a food stock of 6-12 months is so important. It gives you enough time to evaluate your situation and take action instead of desperately trying to find food to feed your children.
Your food stock covers that primal, immediate need.

After having that basic need covered, your finances are of mayor importance as well. Finances and smart financial strategies and investments will ensure you have more resources and yes food on the table as well.
My grandparents where farmers in Spain, they lives there as farmers for generations, yet their main concern after escaping the Spanish Civil War and coming to Argentina wasn't finding a lot of land to farm: Their priority was starting their own business. That bakery store was a big success and covered all their needs 10x better than any farm would.

The modern equivalent of giving a man a fishing rod and teaching him how to fish in comparison to just giving him a basket full of fish.
While some people starved, other poor people that started out just as bad ended up starting their transportation companies, or even had the idea of buying a warehouse and providing a place to rent and start a market, commonly known here as “Ferias”.
So you see, you have people that starve, and you had poor people with no education that just using their heads, they made a fortune, having two of the latest Mercedes Benz parked on the front of their market/warehose (one of each color, exact same model that costs about 40.000 Euros each)

Your savings come into play as well. You precious metals can buy lots of food… today and 50 years from now! Probably even more than what they buy today. Gold and sliver has unlimited shelf life and can be used to compensate for any mistakes you may have made when planning your food stock.

Regarding your question, I think that there will be food. Its just going to be more expensive as you say, just like everything else, in the end it means that ex middle class people become poor and have lower standards of living.

I sincerely don’t think it will be as bad as it got here. We almost lost our middle class, at least half of them became poor. No, they are not starving, but they ARE poor and not USA poor with fancy cars and wide screen TVs. I’m talking about struggling to reach the end of the month and carefully planning what food they can or cannot afford to put on the table.

Food is still cheap in USA and Europe, do yourself a favor and write down exactly how much of each your family needs for a week, then put aside a 6-12 month supply just in case. You’ll end up eating it anyway, just remember the two most important Rs of food stockpiling: Rotate and Restock.

Do that, and you wont end up throwing a single cent away (you always eat food no matter what) and you’ll have a supply in case something bad occurs.



Don Williams said...

A sizable chunk of the middle class here in the USA is slowly falling into poverty as well.

From http://www.nytimes.com/2010/02/21/business/economy/21unemployed.html?bl

"BUENA PARK, Calif. — Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits. ...
...Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.

Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.

Yet the social safety net is already showing severe strains. "

David said...

Ireland exported food throughout the entire Irish Potato Famine. English landlords owned most of the farms and guess where their priorities were?

Wherever starvation occurs, you can bet that if you dig deeply enough you'll discover that some government regulation, law, or program is responsible for preventing free people from fulfilling the need. The best example is in Africa, where excess food grown under political subsidy in the US and Europe is dumped (donated), destroying the market for locally-grown food. The only people with food are the buddies of the kleptocrats in power. US and European people think they're "feeding the starving" but in fact they're just paying a bunch of fat cat local agri-businesses to crush poverty-stricken African farmers. It's pretty sickening, and the "AID organizations" are a bunch of leftist economic ignoramuses.

Twinedog said...

@ David

Funny you talked about the Potato famine. I once heard that the potato is relatively easy to grow in large quantities and a good staple food in terms of nutrition. I plan to start learning how to grow them soon. Some survivalist swear by them.

David said...

@ Don Williams:
No one knows the future, but my forecast is for a debt-deflation collapse to reveal many, many IOU's (including bank deposits) are illusions. Banks lent out depositors' savings at >10:1 (actually infinite, recently) leverage thanks to fractional reserve banking. Anyone who has speculated on margin knows that if you buy a stock on 90% margin, a decline in value of 10% entirely wipes out your equity. Where in America has this NOT been the case? The banking system in the USA is *empty*.

So what we can expect is that even as food, gas, etc. decline in price, people's ability to pay for them will decline even faster, meaning they will rise in *real* terms.

This is the mechanism whereby people who thought they had wealth wake up one day and discover it's not so. Enron's stock declined 95% before anyone was able to see that it was headed for collapse. We're still in the denial phase, but if the stock market is able to keep falling now, denial will turn to recognition, then to ANGER.

Of course, I could be wrong. I find the case for deflation made at www.elliottwave.com quite persuasive.

Loquisimo said...

Twinedog, my grandfather swore by potatoes, and especially the Red Pontiac variety, they are very tough and won't sprout in two weeks like russets. You can store them in an old broken freezer or in a ratproof bin of any kind, no refrigeration needed. My grandpa also grew yellow corn and tomatoes (which I'm allergic to), and any number of green veggies. He had chickens in the 1980s. If you just had chickens and potatoes and corn, you'd live.

Agri-dumping is a huge problem for the third world, the US produces so much food that local farmers can't compete. That may be changing.

I personally think that the problem in the USA won't be that food is expensive per se, but that people have no money due to having no jobs and therefore are unable to buy food. If you have no income, and suddenly there's no food at the church giveaway programs, you're at the bottom of the totem pole and you are gonna die. People who manage to hold on to their jobs will be able to afford SOME kind of food in the USA, it may be cheap food laced with drugs that make you sick, but they will have food.

Anonymous said...

Uniculture is a bad bet (putting all your eggs in one basket). One blight and you're out (see Ireland). Diversify; always have a backup and a backup for that.

Don Williams said...

1) The problem with self-sufficient farming that I see is obtaining enough supply of fertilizers. People don't realize that Real Food (grains like corn or wheat, legumes like beans, and potatoes for carbohydrates ) take an enormous amount of nutrients out of the ground --which have to be replaced somehow.
2) I realize that if you have a horse or cow, you can use their manure --but then you have to feed THEM over winter somehow. And if they die for disease or are killed by looters, you are up the creek. Plus its hard to keep livestock in suburbs.

Anonymous said...

I’m talking about struggling to reach the end of the month and carefully planning what food they can or cannot afford to put on the table.

There are already millions of people in the US in this situation, unfortunately. The rate of people on food stamps has risen dramatically and food banks are running low on food. As much as people would like to blame this increase on stereotypes like welfare queens and people who can't manage their finances, as someone who works with welfare recipients, I can assure you that there are a lot of desperate and recently unemployed people who otherwise don't have any other options.

Anonymous said...

"If you have no income, and suddenly there's no food at the church giveaway programs, you're at the bottom of the totem pole and you are gonna die."

That does seem to skip over or gloss over one step, why would there be no food at the church giveaway programs? Has this been the case anywhere that government hasn't gotten in the way and obstructed food distribution?

- Something's up with this starving kids story,... are these the children of the indigenous people of Argentina or people who shun religion and perhaps either cling to government instead, or are street criminal kids? For many of them, not all, it just seems like there's a piece missing from this puzzle of human tragedy.
A lack of a cultural social net separate from government, or is this some of what is missing in Argentinean culture, the gutting FerFal mentioned?

Ferfal says, "I sincerely don’t think it will be as bad as it got here."

You're obviously not reading the same economic papers many of us are. I hope/wish you're right, but the numbers don't add up.

Joseph said...

Food can be found here in the US, I think one of the biggest problems is affordable housing. If you are poor with no family to help, you are going to have a hard time.

Anonymous said...

A lot of places aren't fit to grow food in USA. Cities in the desert (Phoenix, Vegas, LA, San Diego) and some other areas aren't going to make it when the food trucks don't come. And other places have short growing seasons. There are just way too many people in way too many big cities. They won't all survive but don't expect them to sit quietly and starve. Expect serious violence.

Sinful Soul said...

Hi Ferfal,

Great blog,as for food well you just can not have enough stored or growing can you,protecting it is the one that will most likely get you killed I rekon.

O/T If our respective countries go to war over the Falklands/Malvina`s lets not you and I fall out eh!

David said...

One key point of Fernando's blog/book is to highlight that when the SHTF, it's not TEOTWAWKI. A lot of prepper hand-wringing is very apocalyptic, rendering it just as fantastical as notions that what has gone on for the past 4 decades can continue.

I do see a sudden recognition that most people are a lot poorer than they thought they were. The credit bubble allowed consumers to consume savers' savings. This made the consumers feel wealthy due to their high lifestyles and savers feel wealthy because they, well, saved. These were opposite sides of the same illusory coin.

What apocalyptic viewpoints miss is that people are quite adaptable and while there will likely be a rise in hardship, most people will soldier on. There is unlikely to be mass starvation in Phoenix AZ, for instance, or Mad Max-style rioting in LA, Chicago, and the City of NY.

For a better idea of how people operate in (and how to prepare for) very challenging conditions, http://www.theplacewithnoname.com/blogs/klessons/howto.html is a fantastic site to pair with FerFAL's.

Loquisimo said...

David, what will happen is that people will just LEAVE the desert cities and go where there IS food. Las Vegas has lost maybe half its population in the last four years. Where are they going? Likely anywhere where food grows.

One of the big unreported stories of this depression is how people are leaving those huge desert cities in droves. I'm surprised that the Sacramento Valley hasn't seen a huge increase in homeless, looking for some of our plentiful food supply.

Just like the first depression, people will return to the land. Phoenix may not starve, but it's not all that difficult to feed 50,000 people (the population in 1950). Nevada, the fastest growing state for 20 years, is now losing most of them.

Anonymous said...

health insurance monthly costs in California going up 45 percent and this product is needed by everyone who could even contemplate health care costs yet there is no inflation thye government numbers state, tho some cite housing prices falling as why there is no inflation, but those prices were excluded from the inflation calculation when they gained double digit gains yearly...all in all bogus numbers to rip off savers..

Anonymous said...

david is correct,,,swinedog ..keep some potatoes in a cool, dark place and wait for them to sprout for those sprouts get put in the ground and are the potatoe plant which grows very well and multiples in most of the cooler climates of the USA, try the little ones and the large ones...ditto to garlic..onions and a few other crop plants..

Anonymous said...



You weren't kidding about http://www.theplacewithnoname.com, aka, LISTENING TO KATRINA. I have no association with the site, but it is a tightly organized, thorough info site for what to do BEFORE and when TSHTF.

Check it out people, well worth the visit.

gaga said...

"I once heard that the potato is relatively easy to grow in large quantities and a good staple food in terms of nutrition. "

You get maximum yields of 50tons per Ha, versus 7tons for wheat. Blight is a problem though; you can lose entire crops on a regular basis. You need fertilizers and pesticides to get yield anything like this. Pigshit maybe good but it has an incredibly small amount of nitrogen compared to chemicals.

During the Irish famine and pretty much all famines food is available - buying it is always the problem for the people who starve.