Rapid food price inflation in 2008 sparked riots in a number of countries. At that time, the World Bank estimated 125 million people were in extreme poverty. The World Bank says prices are not quite back at those levels - just 3% below - although they are 27% higher than a year ago. A separate report earlier this month from the UN's Food and Agricultural Organization said that world food prices had hit a RECORD HIGH in January. Finance ministers and central bankers from the G20 group of developed and developing nations are meeting later this week in Paris.
Companies Warn That Higher Prices Are Looming - Cotton prices are near their HIGHEST LEVEL IN MORE THAN A DECADE, after adjusting for inflation, and leather and polyester costs are jumping as well. Copper recently hit its HIGHEST LEVEL IN ABOUT 40 YEARS, and iron ore, used for steel, is fetching extremely high prices. Prices for corn, sugar, wheat, beef, pork and coffee are soaring. Labor overseas is becoming more expensive, meanwhile, and so are the utility bills to keep a factory running. “There are cost pressures from virtually everywhere."
When commodity prices started to rise last summer, many manufacturers and retailers absorbed the costs, worried that shoppers would not pay higher prices during the competitive holiday season or while the economy was still fragile. Many big companies, including Kraft, Polo Ralph Lauren and Hanes, say they cannot hold off any longer and must raise prices to protect some profits. Whether shoppers will pay is unclear. “Consumers are not exactly in the frame of mind or economic circumstances to say ‘Oh, pay whatever they ask. There’s going to be pushback.”
Economists say the increases may eventually show up as inflation, though they are not yet projecting rates that would set off alarms. Despite some fears, inflation has been extremely low, at a rate of just 1.4 percent annually in December. Data for January will be released Thursday, but economists expect inflation will run about 2.5 percent this year. Some do see the creeping signs of higher inflation, and warn that the Federal Reserve will need to raise interest rates or at least stop pumping more money into the economy. Others argue that such moves would choke off economic growth sorely needed to get companies hiring again.
Given that the price of a gallon of gas is now well over $3 on average, Americans may feel that they are already dealing with higher prices. Adding to the cost of food won’t greatly distort most household budgets. Food, gas, clothing, personal care products and cleaning and laundry supplies make up less than a quarter of household spending in the United States. People at the bottom of the income scale struggle more as these prices rise, of course, because a larger share of their spending is on such essentials. The sharp rise in commodity prices since last year has not translated into all new records. Food commodity prices are about 8 percent below the high in the summer of 2008, while energy prices are less than half their zenith. Prices of a basket of other commodities are about 4 percent below the heights of mid-2008. The cost of raw materials accounts for a small portion of the cost of most consumer goods, as labor, processing and packaging tend to make up a larger share of the price at the cash register. Foods like coffee, meat and milk, which are closer to raw materials, will probably show some of the biggest price jumps.
step one is stop digging.**
Will Rogers
LARGEST QUAKES -
This morning -
5.1 NEW BRITAIN REGION, P.N.G
Yesterday -
2/15/11 -
6.1 SULAWESI, INDONESIA
5.2 NORTH OF ASCENSION ISLAND
5.1 NEAR EAST COAST OF HONSHU, JAPAN
5.3 OFF EAST COAST OF HONSHU, JAPAN
5.4 RYUKYU ISLANDS, JAPAN
5.0 BANDA SEA
5.1 ALAMAGAN REG, N. MARIANA ISLANDS
5.4 TAIWAN REGION
VOLCANOES -
WASHINGTON - 4.3-magnitude earthquake near Mount St. Helens on Valentine's Day is BIGGEST IN 30 YEARS. The 4.3-magnitude earthquake occurred 6 miles north of Mount St. Helens on Monday morning — exactly 30 years to the day after an even bigger earthquake occurred at nearly the exact same spot. Monday’s quake was followed by more than a half-dozen much smaller aftershocks, all in the same general area. Scientists said the seismic activity does not indicate magma rising at Mount St. Helens. They’ve detected none of the shallow quakes or gas typically associated with an imminent volcanic eruption. But they said Monday’s quake — just like the one 30 years ago — is at least indirectly related to the volcano.
Felt as far away as south Puget Sound and Astoria, Ore., Monday’s first temblor was the BIGGEST IN THE PACIFIC NORTHWEST IN TWO YEARS. Scientists suspect the quake, at 10:35 a.m., may have occurred in a bit of post-eruption settling in the landscape surrounding Mount St. Helens, which last erupted between 2004 and 2008. The quake generated a specific kind of shear wave felt over a wide area. In a curious twist of timing and fate, this type of surface wave is named for the scientist who discovered it: early 20th-century British geophysicist Augustus Love. “It was very rich in Love waves. Those Love waves coming out were probably what people were feeling.” If so, it’s not the first Valentine’s Day that the volcano has been massaged by waves of Love. Post-eruptive settling likely triggered a 5.5-magnitude quake in the vicinity of Johnston Ridge on Feb. 14, 1981. The massive and sudden expulsion of magma during the catastrophic eruption of May 18, 1980, probably increased stress in a well-documented seismic zone that runs north-to-south underneath Mount St. Helens. In effect, the earth shifted nine months after the eruption. “That was a fairly significant adjustment. You had a cubic kilometer of material removed from depth.”
The earthquake and aftershocks on Monday were not as large as the ones in 1981. However, the location and depth — roughly 3 miles below the Johnston Ridge Observatory — bears striking similarities to the 1981 temblor. The volcano spurted a new lava dome between 2004 and 2008, which may have created new strain in the seismic zone below Johnston Ridge. Seismometers detected a swarm of smaller earthquakes in the general area about three weeks ago. “We’re about three years removed from the end of the last eruption, in January of 2008. Perhaps these earthquakes are in response to the end of that eruption.”
TROPICAL STORMS -
Cyclone 15S was 599 nmi ENE of Broome, Australia.
Cyclone 16S was 628 nmi W of Broome, Australia.
Cyclone BINGIZA was 719 nmi WNW of Saint Pierre, Reunion.
AUSTRALIA - Cyclone Carlos on top of Darwin. Dozens of homes have been damaged as category 1 cyclone Carlos bears down on the Top End. While conditions look like they are easing right now, they're in the middle of the low, and it is likely that rain and wind will pick up dramatically this afternoon and evening. "These events are very unpredictable. This is going to evolve over the next couple of days." Four people have been rescued from flood waters, while Top End schools have been closed in preparation for the low-level cyclone on the Northern Territory coast. Grocery store shelves were all but empty of bottled water and tinned food by 6pm (CST) yesterday. Many properties sustained damage from fallen trees and water inundation last night. Residents in the low-lying Darwin suburb of Rapid Creek were evacuated.
Police endured a frustrating night on Northern Territory roads, as RECORD RAINFALL and winds of up to 100 km/h took down tree branches and powerlines. Some Darwin suburbs continue to be without power, as police warn residents to beware fallen power lines that may still be active. "Authorities are currently working to clear roadways of debris, and a number of vehicles that are currently stranded on Bagot Rd." A record 425mm of rain fell at Marrara, near the airport, overnight.
A cyclone watch is in place for coastal communities between Onslow and Coral Bay in Western Australia's northwest as a tropical low develops off the coast. .
The damage bill from Tropical Cyclone Yasi is now expected to reach $800 million.
SPACE WEATHER -
STRONGEST SOLAR FLARE IN 4 YEARS has erupted. - Aurora expected, along with satellite disruption. NASA's Solar Dynamics Observatory captured an intense eruption of ultraviolet radiation last evening. This comes from Sunspot 1158. Last August a solar storm was so large, it was seen from Earth with the naked eye. In addition to the ultraviolet surge, the storm released a huge coronal mass ejection (CME). This could reach earth within 36-48 hours. If you hear of any potential satellite disruptions, this would be why.
The solar cycle is now ramping back up in activity. There is an 11 year cycle, but the past few years had seen the lowest solar activity in more than a century.
