Marc Faber on Food Commodity Prices
Recently Marc Faber was talking food commodities and stated as a whole they are at their lowest levels when measured by real time dollars.
Faber said: “Food commodities are at 200 year lows in real time dollars.”
The question for the majority of food commodities is whether the supply of food will increase at a rate the demand is through a growing population.
Right now it seems there is a huge supply because, in fact there is. But that supply has come from a number of countries increasing their domestic acreage to grow a variety of commodities, especially major ones like wheat, corn and soybeans.
Once this come to fruition, the question then will be answered as to how the price of food commodities will react in the years ahead.
Even droughts and other events which bring down crop production hasn't dented the larger agricultural commodities because of the enormous amount being planted.
Eventually all of this will come to a head, but for now it seems a lot of the major food commodities will have downward pressure on prices.
One other major factor is the cost of inputs, which have seemed to rise in price some lately, but that can be offset by genetically modified plants which largely reduce the needs of those inputs, depending on which particular crop you're talking about.
The bottom won't hit with food commodities as a whole in my opinion, but they will be hit on a crop by crop basis, even more so the further you move from the major foods we eat.
Marc Faber on Food Commodity Prices
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