Tag Archives: Food Prices

Fertilizer shortage may lead to spring scramble on North America’s farms

By Rod Nickel

(Reuters) – A global shortage of nitrogen fertilizer is driving prices to record levels, prompting North America’s farmers to delay purchases and raising the risk of a spring scramble to apply the crop nutrient before planting season.

Farmers apply nitrogen to boost yields of corn, canola and wheat, and higher fertilizer costs could translate into higher meat and bread prices.

World food prices hit a 10-year high in October, according to the United Nations food agency, led by increases in cereal crops like wheat and vegetable oils.

The Texas Arctic Blast in February and Hurricane Ida in August disrupted U.S. fertilizer production. Then, prices of natural gas, a key input in producing nitrogen, soared in Europe due to high demand and low supplies. Global urea prices this month topped $1,000 per tonne for the first time, according to BMO Capital Markets. Russia and China have curbed exports.

In the United States, nitrogen fertilizer supplies are adequate for applications before winter, said Daren Coppock, CEO at U.S.-based Agricultural Retailers Association. Applying fertilizer before winter reduces farmers’ spring workload.

But with prices so high, some farmers are delaying purchases, risking a scramble for supplies during their busiest time of year, Coppock said.

Global nitrogen fertilizer sales were worth $53 billion in 2020, and prices are at least 80% higher so far this year, according to Argus Media.

Normally, MKC, a Kansas farm cooperative, sells fertilizer to farmers for payment up front with delivery months down the road, giving growers certainty about a key expense.

With prices soaring, MKC has scaled back its pre-paid sales out of caution.

“You just don’t know what the price is going to be. It has put a lot of retailers in a tough spot,” said Troy Walker, MKC’s director of retail fertilizer.

Delaying fertilizer purchases until spring runs the risk of further supply chain congestion as farmers rush to apply fertilizer and plant seed during a tight window.

“There’s going to be a lot of people who wait and see,” Coppock said. “(But) if everybody’s scrambling in the spring to get enough, somebody’s corn isn’t going to get covered.”

Wisconsin farmer Jim Zimmerman decided to bite the bullet and secure all his fertilizer for spring, this year.

“It’s next year’s prices I’m worried about,” Zimmerman said. “It could get worse.”

Nutrien Ltd, the largest U.S. farm supplier, has secured less nitrogen fertilizer than usual for spring delivery because manufacturers are making less available, said Jeff Tarsi, the company’s senior vice president of retail. Sales to farmers are likely to occur closer to spring than usual, he said.

The one nitrogen product that is running short in North America is urea ammonium nitrate (UAN), said Kreg Ruhl, crop nutrients manager at Illinois-based farm cooperative Growmark. UAN is a liquid form that is convenient for farmers to apply.

The U.S. International Trade Commission is conducting an anti-dumping investigation into UAN from Russia and Trinidad and Tobago, at the request of U.S. producer CF Industries.

Importers are reluctant to book shipments into 2022, because they may have to pay retroactive duties if CF wins its case, Ruhl said.

Farmers could reduce their fertilizer needs by planting more soybeans and less corn, but there is little evidence many plan to do so.

The U.S. Department of Agriculture forecast U.S. corn plantings would decline to 92 million acres in 2022, from 93.3 million in 2021.

Waiting until spring to buy fertilizer could disappoint some farmers, said Matt Conacher, senior fertilizer manager at Federated Cooperatives Limited, a Canadian wholesale seller.

“My advice is, if you can get your fertilizer now, do so.”

(Reporting by Rod Nickel in Winnipeg; Additional reporting by Julie Ingwersen in Chicago; Editing by Caroline Stauffer and Lisa Shumaker)

Gasoline, auto retailing boost U.S. producer prices

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. producer prices increased solidly in October, driven by surging costs for gasoline and motor vehicle retailing, suggesting that high inflation could persist for a while amid tight global supply chains related to the pandemic.

The Federal Reserve last week restated its belief that current high inflation is “expected to be transitory.” A tightening labor market as millions remain at home is adding to price pressures, which together with shortages of goods sharply restrained economic growth in the third quarter.

The Fed this month started reducing the amount of money it is injecting into the economy through monthly bond purchases.

“The acceleration in inflation may not fade as quickly as previously thought, particularly for businesses because of the global supply-chain issues,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “Elevated inflation is turning up the heat on the Fed but they haven’t shown signs of buckling as they will stomach higher inflation to get the labor market back to full employment quickly.”

The producer price index for final demand rose 0.6% last month after climbing 0.5% in September, the Labor Department said on Tuesday. That reversed the slowing trend in the monthly PPI since spring. In the 12 months through October, the PPI increased 8.6% after a similar gain in September.

Economists polled by Reuters had forecast the PPI advancing 0.6% on a monthly basis and rising 8.7% year-on-year.

More than 60% of the increase in the PPI last month was due to a 1.2% rise in the prices of goods, which followed a 1.3% jump in September. A 6.7% surge in gasoline prices accounted for a third of the rise in goods prices. There were increases in the prices of diesel, gas and jet fuel as well as plastic resins.

Wholesale food prices dipped 0.1% as the cost of beef and veal tumbled 10.3%. Prices for light motor trucks fell as the government introduced new-model-year passenger cars and light motor trucks into the PPI.

Exorbitant motor vehicle prices have accounted for much of the surge in inflation as a global semiconductor shortage linked to the nearly two-year long COVID-19 pandemic has forced manufactures to cut production, leaving virtually no inventory.

Services gained 0.2% last month after a similar rise in September. An 8.9% jump in margins for automobiles and parts retailing accounted for more than 80% of the increase in services. The cost of transportation and warehousing services jumped 1.7%, also reflecting snarled supply chains.

Surveys from the Institute for Supply Management this month showed measures of prices paid by manufacturers and services industries accelerating in October. Manufacturers complained about “record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products.”

Data on Wednesday is expected to showed strong gains in consumer prices in October, according to a Reuters survey of economists. Stocks on Wall Street retreated from record highs. The dollar was steady against a basket of currencies. U.S. Treasury prices rose.

PORT CONGESTION

There is congestion at ports and widespread shortages of workers at docks and warehouses. There were 10.4 million job openings as of the end of August. The workforce is down 3 million from its pre-pandemic level.

Worker shortages were underscored by a report from the NFIB on Tuesday showing almost 50% of small businesses reported job openings they could not fill in October.

Also on Tuesday, Fed Chair Jerome Powell emphasized the U.S. central bank’s commitment to maximum employment, telling a virtual conference on diversity and inclusion in economics, finance and central banking that “an economy is healthier and stronger when as many people as possible are able to work.”

Wholesale prices of apparel, footwear and truck transportation of freight also rose last month as did the costs of food and alcohol retailing, hospital outpatient care as well as machinery, equipment parts and supplies.

Excluding the volatile food, energy and trade services components, producer prices shot up 0.4%. The so-called core PPI gained 0.1% in September. In the 12 months through October, the core PPI rose 6.2%. That followed a 5.9% advance in September.

Construction prices surged 6.6%, the largest gain since the series was incorporated into the PPI data in 2009.

“As companies feel the squeeze from higher energy and labor costs, as well as persistent logistics issues, producer price increases should be robust in the coming months,” said Will Compernolle, a senior economist at FHN Financial in New York.

Details of the PPI components, which feed into the personal consumption expenditures (PCE) price index, excluding the volatile food and energy component, were mixed. The core PCE price index is the Fed’s preferred measure for its flexible 2% target. Healthcare costs increased 0.4%. Airline tickets rebounded 0.3%, but portfolio management fees dropped 2.2%.

Though the October CPI data is still pending, economists believed that the core PCE price index moved higher last month after increasing 3.6% year-on-year in September.

“For now, we think the core PCE price index will be up 3.8% year-on-year in October,” said Daniel Silver, an economist at JPMorgan in New York.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

World Bank sees ‘significant’ inflation risk from high energy prices

By Andrea Shalal

WASHINGTON (Reuters) -Energy prices are expected to inch up in 2022 after surging more than 80% in 2021, fueling significant near-term risks to global inflation in many developing countries, the World Bank said in its latest Commodity Markets Outlook on Thursday.

The multilateral development bank said energy prices should start to decline in the second half of 2022 as supply constraints ease, with non-energy prices such as agriculture and metals also expected to ease after strong gains in 2021.

“The surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries,” said Ayhan Kose, chief economist and director of the World Bank’s Prospects Group, which produces the Outlook report.

“The sharp rebound in commodity prices is turning out to be more pronounced than previously projected. Recent volatility in prices may complicate policy choices as countries recover from last year’s global recession.”

The International Monetary Fund, in a separate blog, said it expected energy prices to revert to “more normal levels” early next year when heating demand ebbs and supplies adjust. But it warned that uncertainty remained high and small demand shocks could trigger fresh price spikes.

The World Bank noted that some commodity prices rose to or exceeded levels in 2021 not seen since a spike a decade earlier.

Natural gas and coal prices, for instance, reached record highs amid supply constraints and rebounding demand for electricity, although they are expected to decline in 2022 as demand eases and supply improves, the bank said.

It warned that further price spikes could occur in the near-term given current low inventories and persistent supply bottlenecks. Other risk factors included extreme weather events, the uneven COVID-19 recovery and the threat of more outbreaks, along with supply-chain disruptions and environmental policies.

Higher food prices were also driving up food-price inflation and raising questions about food security in several developing countries, it said.

The bank projected crude oil prices would reach $74/bbl in 2022, buoyed by strengthening demand from a projected $70/bbl in 2021, before easing to $65/bbl in 2023.

The use of crude oil as a substitute for natural gas presented a major upside risk to the demand outlook, although higher energy prices may start to weigh on global growth.

The bank forecast a 5% drop in metals prices in 2022 after a 48% increase in 2021. It said agricultural prices were expected to decline modestly next year after jumping 22% this year.

It warned that changing weather patterns due to climate change also posed a growing risk to energy markets, potentially affecting both demand and supply.

It said countries could benefit by accelerating installation of renewable energy sources and by cutting their dependency on fossil fuels.

(Reporting by Andrea Shalal; editing by Diane Craft)

NOAA expects U.S. Southwest drought to continue or worsen this winter

By Karl Plume

(Reuters) – A harsh drought is expected to continue or worsen across parts of the U.S. West and northern Plains this winter, including in central and southern California, according to the National Oceanic and Atmospheric Administration’s (NOAA) winter outlook.

NOAA, however, expects the drought to lessen in the U.S. Pacific Northwest and northern California amid an emerging La Nina phenomenon, NOAA’s Climate Prediction Center said on Thursday.

A drought spanning much of western North America has damaged crops from apples to wheat, and has cooked cattle grazing pastures, weakened bee colonies and fueled concerns about rising food prices.

Nearly the entire U.S. West is in some level of drought, according to the National Drought Mitigation Center, with almost half of major agricultural state California under exceptional drought, the most severe category.

“A major region of concern this winter remains the Southwest, where drought conditions remain persistent in most areas,” said Jon Gottschalck, chief of the Operational Prediction Branch of NOAA’s Climate Prediction Center.

“The Pacific Northwest, northern California, the upper Midwest and Hawaii are likely to experience drought improvement,” he said during a webinar highlighting NOAA’s December-to-February outlook.

The conditions are expected to be fueled by an emerging La Nina pattern and its colder-than-normal Pacific Ocean surface water temperatures for a second straight winter.

(Reporting by Karl Plume in Chicago; Editing by David Gregorio)

Analysis: From chips to ships, shortages are making inflation stick

By Dhara Ranasinghe and Sujata Rao

LONDON (Reuters) – Soaring gas prices, staff shortages, a lack of ships — price pressures globally may be picking up faster than anticipated, challenging the view that inflation will prove transitory.

Central bankers, while adamant inflation will subside, are starting to concede it may stay higher for longer as a range of issues push up the prices of goods and services and lift future inflation expectations.

Their conclusions will ultimately determine how quickly policymakers unwind the trillions of dollars of monetary stimulus unleashed to ease the COVID-19 crisis.

“Will central bankers be more focused on growth and be a “bit behind the curve”? Or will they be more concerned about inflation and take the punchbowl away quickly?,” said Charles Diebel, head of fixed income at asset manager Mediolanum International Funds.

Here are five key elements in the inflation debate:

1/ GASFLATION

European and U.S. gas prices have soared more than 350% and more than 120% respectively this year. Oil is up around 50% and Goldman Sachs expects Brent crude to hit $90 a barrel by end-2021 from around $80 currently.

Gas and electricity make up 4.8% of the euro area harmonized-inflation (HICP) basket used by the European Central Bank. Rabobank reckons the price surge is a separate ‘shock’ that could add 0.15 percentage points (ppts) to its 2.2% euro zone inflation forecast for 2021 and another 0.25 ppts to 2022’s 1.8% projection.

Many economists see higher gas prices as here to stay, due to slowing U.S. output, rising costs of carbon emissions permits for polluters and curbs on the usage of dirtier fuels.

In China, where factory inflation hit 9.5% in August, power cuts have slashed output of goods from cement to aluminum.

These outages are a risk to end-users such as those in auto supply chains, Morgan Stanley said, noting “cost-push inflation and tightening upstream supply that could affect downstream production and profits.”

2/ CHIPFLATION

Semiconductors, or chips as they are known, are tiny but are having an outsized impact on global factories. At General Motors alone, chip shortages are seen cutting Q3 vehicle deliveries by 200,000, while falling output has sent used-car prices spiraling.

Chip prices have risen and semiconductor giant Taiwan’s TSMC is mulling further hikes of up to 20%. That will ripple across everything from electronics to cars and phones to washing machines. But chipmakers themselves face higher input costs from commodities to power.

“It does seem likely that these semiconductor shortages are going to persist into next year,” said Jack Allen-Reynolds, senior European economist at Capital Economics.

Or beyond. Intel’s CEO predicts chips will comprise a fifth of a car’s cost by 2030, from 4% in 2019 as vehicles become self-driving or electric.

3/ FOODFLATION

Global food prices rose 30% year-on-year in August, an index compiled by the UN Food and Agriculture Organization shows — a sign of broadening price pressures.

While higher agricultural commodity prices are behind the jump, JPMorgan analysts also attribute food price inflation to pandemic-related pressures such as logistics disruptions and transport costs.

In emerging markets, where food makes up a large chunk of inflation baskets, there is more pressure to tighten monetary policy. It is less of a problem for developed nations but price rises look inevitable for items such as soft drinks and snacks.

4/GREENFLATION

Stringent rules to guide the transition to a greener future are blamed for stoking ‘greenflation,’ for instance by shutting out polluting factories, vehicles, ships and mines, in turn reducing the supply of key goods and services.

Prices for European carbon emission allowances, have doubled this year to 65 euros a tonne. A price of 100 euros would lift European retail power prices 12%, adding 35 bps to headline euro zone inflation, Morgan Stanley estimated in June.

There are other examples. Falling ship orders due to upcoming rule changes on fuels may be a tailwind for shipping rates that have already surged 280% this year.

NatWest attributes the commodity rally at least partly to the shift to greener technologies raising mining and production costs.

All this may not fully have seeped into inflation calculations. For instance, markets see euro area inflation hitting 2% only after a decade, Danske Bank sees “upside risks to inflation expectations…once implementation of the green transition gathers momentum”.

5/ WAGEFLATION

As prices rise, so do expectations of future inflation among consumers, who accordingly demand pay hikes.

The carbon emission allowances picture is mixed. U.S average hourly earnings jumped 0.6% in August and U.S. five-year inflation expectations are running around 3%, surveys show.

In some UK sectors, earnings have risen as much as 30% this year. Euro area labor costs fell in Q2 but inflation as well as inflation expectations are rising.

“Maybe markets are a little bit extreme in their pricing, but I’m not recommending investors should fade that move,” Societe Generale senior rates strategist Jorge Garayo said.

“When we go into next year, that will be the big test.”

(Reporting by Dhara Ranasinghe and Sujata Rao; Additional reporting by Stefano Rebaudo ; Editing by Kirsten Donovan)

U.S. consumer prices post biggest gain in 8-1/2 years as economy reopens

By Lucia Mutikani

WASHINGTON (Reuters) -U.S. consumer prices rose by the most in more than 8-1/2 years in March as increased vaccinations and massive fiscal stimulus unleashed pent-up demand, kicking off what most economists expect will be a brief period of higher inflation.

The report from the Labor Department on Tuesday also showed a firming in underlying prices last month as the broader reopening of the economy bumps against bottlenecks in the supply chain, capacity constraints and higher commodity prices.

Federal Reserve Chair Jerome Powell and many economists view higher inflation as transitory, with supply chains expected to adapt and become more efficient. The supply constraints mostly reflect a shift in demand towards goods and away from services during the pandemic, now in its second year.

“Inflation is a process and not a one-time event,” said Chris Low, chief economist at FHN Financial in New York. “These bottlenecks are one offs. The Fed will not consider action until it views price levels changes as permanent rather than temporary, something it does not consider possible until the economy is at full employment.”

The consumer price index jumped 0.6% last month, the largest gain since August 2012, after rising 0.4% in February. A 9.1% surge in gasoline prices accounted for nearly half of the increase in the CPI. Gasoline prices rose 6.4% in February.

Food prices edged up 0.1%. The cost of food consumed at and away from home also rose 0.1%.

Economists polled by Reuters had forecast the CPI advancing 0.5%. In the 12 months through March, the CPI surged 2.6%. That was the largest gain since August 2018 and followed a 1.7% increase in February.

The jump mostly reflected the dropping of last spring’s weak readings from the calculation. Those so-called base effects are expected to push up annual inflation even higher in the coming months before subsiding later this year.

Stocks on Wall Street were mostly higher. The dollar slipped against a basket of currencies. U.S. Treasury prices rose slightly.

UNDERLYING INFLATION FIRMING

Excluding the volatile food and energy components, the CPI increased 0.3% after nudging up 0.1% in February. The largest gain in seven months in the so-called core CPI was driven by a rise in rents as well as hotel and motel accommodation prices, which rebounded 4.4% after falling 2.7% in February.

The cost of hospital services increased 0.6%. But prescription medication prices were unchanged leading to overall healthcare costs edging up 0.1%. Used cars and trucks prices increased a solid 0.5%, but the cost new cars was unchanged for a second straight month. Motor vehicle production has been hampered by a global shortage of semiconductors.

Consumers also paid more for motor vehicle insurance as well as recreation and household furnishings. But apparel prices fell as did costs related to education.

The core CPI increased 1.6% on a year-on-year basis after rising 1.3% in February. The Fed tracks the core personal consumption expenditures (PCE) price index for its 2% inflation target, a flexible average. The core PCE price index is at 1.5%.

The cost of services advanced 0.4% after rising 0.3% in February. The government reported last week that producer prices surged in March. With the CPI and PPI data in hand, economists at JPMorgan forecast the core PCE price index gained 0.4% in March after nudging up 0.1% in February. That would lift the year-on-year increase to 1.9% from 1.4% in February.

March’s strong inflation readings are in sync with several business surveys showing an acceleration in cost pressures.

Manufacturers are grappling with acute shortages of basic materials, rising commodities prices and difficulties in transporting finished goods.

Some economists argue the fractured supply chains, together with nearly $6 trillion in government relief since the COVID-19 pandemic barreled through the United States in March 2020 could fan inflation for a sustained period. The Fed has also slashed its benchmark overnight interest rate to near zero and is pumping money into the economy through monthly bond purchases.

These economists also point to the business surveys, which have indicated that customer inventories are at record lows and order books are full. A survey from the NFIB on Tuesday showed just over a third of small businesses planned raising prices in March, noting that “low inventories and solid sales will create more opportunities to raise prices.”

“This suggests companies have strong pricing power that could allow them to expand profit margins after several years of margin compression, which could keep inflation higher for longer,” said James Knightley, chief international economist at ING in New York.

But labor market slack could make it harder for inflation to continue spiraling higher. Employment remains 8.4 million below its peak in February 2020. The extremely accommodative fiscal and monetary policy are also unlikely to keep inflation uncomfortably high, if history is a good predictor.

“Neither rapid money growth and record federal budget deficits have had any correlation with inflation over the past 40 years,” said David Berson, chief economist at Nationwide in Columbus, Ohio. “Additionally, the factors that have acted to keep inflation in check in recent decades – stable inflation expectations, increased use of technology, production movements to low-cost areas – all remain in place.”

(Reporting by Lucia Mutikani, Editing by Andrea Ricci)

$400 for a plate of rice and beans? U.N. counts cost of ‘man-made’ famines

By Michelle Nichols

NEW YORK (Reuters) – Nearly 30 years ago a malnourished two-year-old girl died in front of U.S. Ambassador to the United Nations Linda Thomas-Greenfield at a refugee camp in northern Uganda. Two days ago U.N. food chief David Beasley met a starving five-month-old girl at a hospital in Yemen – she died on Thursday.

“What’s the difference today?” Thomas-Greenfield said. “Today we should have better information … We can save lives if we know where to go and if we put the funding toward it.”

Thomas-Greenfield and Beasley both recounted these stories during a U.N. Security Council meeting on food security, where U.N. Secretary-General Antonio Guterres warned that more than 30 million people in over three dozen countries are “just one step away from a declaration of famine.”

“Famine and hunger are no longer about lack of food. They are now largely man-made – and I use the term deliberately. They are concentrated in countries affected by large-scale, protracted conflict,” Guterres told the 15-member body.

He announced the creation of a high-level U.N. task force on preventing famine led by U.N. aid chief Mark Lowcock.

“Parts of Yemen, South Sudan and Burkina Faso are in the grip of famine or conditions akin to famine,” Guterres said. “The Democratic Republic of the Congo experienced the world’s largest food crisis last year, with nearly 21.8 million people facing acute hunger between July and December.”

Guterres, Beasley and Thomas-Greenfield also raised particular concern about food shortages in Ethiopia’s northern Tigray region, where Ethiopian government troops began an offensive against Tigray’s former ruling party after regional forces attacked federal army bases in the region in November.

“Food stocks are depleted. Acute malnutrition is rising. The ongoing violence has prevented humanitarians from helping desperately hungry people,” Thomas-Greenfield said.

In war-torn South Sudan, Guterres said 60% of people are increasingly hungry: “Food prices are so high that just one plate of rice and beans costs more than 180% of the average daily salary – the equivalent of about $400 here in New York.”

(Reporting by Michelle Nichols; Editing by Daniel Wallis)

U.S. farmers face devastation following Midwest floods

U.S. farmers face devastation following Midwest floods

By Humeyra Pamuk, P.J. Huffstutter and Tom Polansek

WINSLOW, Neb./CHICAGO (Reuters) – Midwestern farmers have been gambling they could ride out the U.S.-China trade war by storing their corn and soybeans anywhere they could – in bins, plastic tubes, in barns or even outside.

Now, the unthinkable has happened. Record floods have devastated a wide swath of the Farm Belt across Iowa, Nebraska, South Dakota and several other states. Early estimates of lost crops and livestock are approaching $1 billion in Nebraska alone. With more flooding expected, damages are expected to climb much higher for the region.

As river levels rose, spilling over levees and swallowing up townships, farmers watched helplessly as the waters consumed not only their fields but their stockpiles of grain, the one thing that can stand between them and financial ruin.

“I’ve never seen anything like this in my life,” said Tom Geisler, a farmer in Winslow, Nebraska, who said he lost two full storage bins of corn. “We had been depending on the income from our livestock, but now all of our feed is gone, so that is going to be even more difficult. We haven’t been making any money from our grain farming because of trade issues and low prices.”

The pain does not end there. As the waters began to recede in parts of Nebraska, the damage to the rural roads, bridges and rail lines was just beginning to emerge. This infrastructure is critical for the U.S. agricultural sector to move products from farms to processing plants and shipping hubs.

The damage to roads means it will be harder for trucks to deliver seed to farmers for the coming planting season, but in some areas, the flooding on fields will render them all-but-impossible to use.

The deluge is the latest blow for the Farm Belt, which has faced several crises in the last five years, as farm incomes have fallen by more than 50 percent due to a global grain glut. President Donald Trump’s trade policies cut off exports of soybeans and other products, making the situation worse.

Soybeans were the single most valuable U.S. agricultural export crop and until the trade war, China bought $12 billion worth a year from American farmers. But Chinese tariffs have almost halted the trade, leaving farmers with crops they are struggling to sell for a profit.

CORN AND SOYBEANS DESTROYED

As prices plummeted last year amid the ongoing trade fight, growers, faced with selling crops at a loss, stuffed a historic volume of grain into winding plastic tubes and steel bins. Some cash-strapped families piled crops inside their barns or outside on the ground.

Farmers say they are now finding storage bags torn and bins burst open, grain washed away or contaminated. Jeff Jorgenson, a farmer and regional director for the Iowa Soybean Association, said he has seen at least a dozen bins that burst after grains swelled when they became wet.

Under U.S. Food and Drug Administration policy, flood-soaked grain is considered adulterated and must be destroyed, according to Iowa State University.

Some farmers had been waiting for corn prices to rise just 10 cents a bushel more before making sales, which would earn them a few extra thousand dollars, Jorgenson said.

“That’s the toughest pill to swallow,” Jorgenson said. “This could end their career of farming and the legacy of the family farm.”

As of Dec. 1, producers in states with flooding – including South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, Wisconsin and Illinois – had 6.75 billion bushels of corn, soybeans and wheat stored on their farms – 38 percent of the total U.S. supplies available at that time, according to U.S. Department of Agriculture data.

Iowa suffered at least $150 million in damage to agricultural buildings and machinery, and 100,000 acres of farmland are under water, said Keely Coppess, a spokeswoman for the Iowa Department of Agriculture and Land Stewardship.

Jorgenson surveyed more than two dozen local farmers to assess the damage and tallied about 1.25 million bushels of corn and 390,000 bushels of soybeans lost just in Fremont County, Iowa, worth an estimated $7.3 million.

EXTENT OF DAMAGE UNCLEAR

The record flooding has killed at least four people in the Midwest and left one person missing. The extent of damage is unknown as meteorologists expect more flooding in the coming weeks.

Early estimates put flood damage at $400 million in losses for Nebraska’s cow-calf industry and another $440 million in crop losses, Nebraska Governor Pete Ricketts told a news conference on Wednesday.

“The water came so fast,” said John Hansen, president of the Nebraska Farmers Union. “We know our farmers didn’t have enough time to move all the cattle or empty all their grain bins.”

Multiple washouts and high water on BNSF Railway Co’s main lines have caused major disruption across parts of the Midwest, the company warned on its website. The flooding also has disrupted part of Hormel Foods Corp’s supply chain, the company told Reuters.

The roads are so bad that Nebraska’s National Guard on Wednesday will push hay out of a military helicopter to feed cattle in Colfax County stranded by floodwaters, Major General Daryl Bohac said. It is the first time in at least half a century that such an airdrop has been conducted, he said.

Cattle carcasses have been found tangled in debris or rotting in trees, while tractors and other expensive machinery are stuck in mud, unable to be moved. At Geisler’s farm in Winslow, Nebraska, two trucks and a tractor were seen buried in mud in wooden barns where water pooled.

“We should have been getting into planting for next season, but now all of our equipment is flooded and it’s going to take at least three to four weeks to bring back that equipment into shape,” said Geisler.

(Reporting by P.J. Huffstutter and Tom Polansek in Chicago and Humeyra Pamuk in Winslow, Nebraska; Additional reporting by Julie Ingwersen and Mark Weinraub in Chicago; Editing by David Gaffen and Matthew Lewis)

Japan’s heat wave drives up food prices, prison inmate dies

A woman uses a parasol on the street during a heatwave in Tokyo, Japan July 25, 2018. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) – Vegetable prices in Japan are spiking as much as 65 percent in the grip of a grueling heat wave, which drove temperatures on Wednesday to records in some areas hit by flooding and landslides, hampering clean-up and recovery efforts.

As many as 65 people died in the week to July 22, up from 12 the previous week, government figures show, while a prisoner in his forties died of a heat stroke in central Miyoshi city, amid what medical experts called an “unprecedented” heat wave.

An agriculture ministry official in Tokyo, the capital, warned against “pretty severe price moves” for vegetables if predictions of more weeks of hot weather held up, resulting in less rain than usual.

“It’s up to the weather how prices will move from here,” the official said. “But the Japan Meteorological Agency has predicted it will remain hot for a few more weeks, and that we will have less rain than the average.”

The most recent data showed the wholesale price of cabbage was 129 yen ($1.16) per kg in Tokyo on Monday, the ministry said, for example, an increase of 65 percent over the average late-July price of the past five years.

Temperatures in Japan’s western cities of Yamaguchi and Akiotacho reached record highs of 38.8 Celsius (101.8 Fahrenheit) and 38.6 C (101.5 F), respectively, on Wednesday afternoon.

In Takahashi, another western city and one of the areas hit hardest by this month’s flooding, the mercury reached 38.7 C (101.7 F), just 0.3 degrees off an all-time high.

In Miyoshi, where the prisoner died after a heat stroke, the temperature on the floor of his cell was 34 degrees C (93 F) shortly before 7 a.m. on Tuesday. The room had no air-conditioning, like most in the prison.

Authorities who found him unresponsive in his cell sent him to a hospital outside the prison, but he was soon pronounced dead, a prison official said.

“It is truly regrettable that an inmate lost his life,” Kiyoshi Kageyama, head of the prison, said in a statement. “We will do our utmost in maintaining (prisoners’) health, including taking anti-heat stroke steps.”

On the Tokyo stock market, shares in companies expected to benefit from a hot summer, such as ice-cream makers, have risen in recent trade.

Shares in Imuraya Group, whose subsidiary sells popular vanilla and red-bean ice cream, were up nearly 10 percent on the month, while Ishigaki Foods, which sells barley tea, surged 50 percent over the same period.

Kimono-clad women using sun umbrellas pause on a street during a heatwave in Tokyo, Japan July 25, 2018. REUTERS/Issei Kato

Kimono-clad women using sun umbrellas pause on a street during a heatwave in Tokyo, Japan July 25, 2018. REUTERS/Issei Kato

In neighboring South Korea, the unremitting heat has killed at least 14 people this year, the Korea Centers for Diseases Control and Prevention said.

The heat wave was at the level of a “special disaster”, South Korean President Moon Jae-in said on Tuesday, as electricity use surged and vegetable prices rose.

(Reporting by Kiyoshi Takenaka in Tokyo and Jeongmin Kim in SEOUL; Additional reporting by Ritsuko Ando and Aaron Sheldrick in TOKYO; Editing by Clarence Fernandez)

Venezuela’s monthly inflation rises to 34 percent: National Assembly

Venezuela's monthly inflation rises to 34 percent: National Assembly

By Girish Gupta and Corina Pons

CARACAS (Reuters) – Venezuela’s monthly inflation rate jumped to 33.8 percent in August, with food price rises reaching hyper-inflationary levels above 50 percent, the opposition-controlled National Assembly said on Thursday.

The government stopped releasing the data more than a year ago amid a deep economic crisis, but the National Assembly has published its own figures since January. They are generally in line with private economists’ estimates.

The latest month-on-month inflation figure was a jump from the 26 percent rise in prices reported in July.

In the first eight months of 2017, prices rose a cumulative 366.4 percent, according to the legislative body.

“Food is now in hyperinflation,” said opposition lawmaker Angel Alvarado, adding that the food sector had seen price rises of 51 percent in August.

Economists usually define hyperinflation as occurring when monthly rates exceed 50 percent.

Millions of Venezuelans are suffering from food and medicine shortages as the oil producer struggles with an economic crisis that spurred months of nationwide unrest earlier this year.

However, the protests have died down in recent weeks, with many in the opposition viewing them as fruitless after socialist President Nicolas Maduro’s government sidelined the National Assembly and created its own legislative superbody.

‘ECONOMIC WAR’

The country’s bolivar currency also weakened past 20,000 per dollar on the widely-used black market on Thursday for the first time. It has lost 95 percent of its value against the U.S. currency in the past year.

The value of $1,000 in local currency purchased when Maduro came to power in April 2013 would now be worth $1.20.

Maduro blames the crisis on the country’s opposition and the United States, whom he says are waging an “economic war” against his government.

Critics blame Maduro’s economic policies including a currency policy that pegs the bolivar at 10 per dollar at the strongest rate and the strict price controls which they say disincentivize production.

Opponents also point to a rapidly rising money supply. The country’s M2 figure is up 431 percent in the last year alone.

The exponential rise in M2 – the sum of cash, together with checking, savings, and other deposits – means an exponential rise in the amount of currency circulating.

Coupled with a decline in the output of goods and services, that has accelerated inflation.

(Writing by Girish Gupta; Editing by Paul Simao)