When you’re going to the grocery store, the last thing on your mind is probably investing. But what if I told you that the food you buy every day can fluctuate in price just like commodities you may be more familiar with, such as oil, natural, has and minerals. Recently, the price of Crops has soared. In fact, Bloomberg reported that this crop rally in the U.S. is making essential food commodities dramatically more expensive, and the costs could soon spill over onto grocery store shelves. Staple ingredients in almost everyone’s daily diet such as: wheat, corn, and soybeans, are all surging to highs not seen since 2013.
This occurred after gains last week caused some analysts to warn that a speculative bubble could be forming. So, what is the culprit behind this? It seems to be the weather. Specifically, dryness around the world. In Canada , France, and the U.S. this weather is hurting wheat plants, and even in South American countries like Brazil and Argentina corn and soy harvests are being disrupted. On top of all of this, there are fears about future weather getting even worse with a drought coming to the American Farm Belt this summer. As these crops are the base for some of our favorite foods and drinks, from bread to pizza and even soda, fears of inflation on food are real. All of this can be seen on the Bloomberg Agriculture Spot Index — which tracks key farm products and happened to soar the most it has risen in the past 9 years just last week.
What do you think about crop inflation? And will this interrupt your snacking plans?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.