Battlefield for "The Next War", perhaps?

Forget oil, the new global crisis is food
By Alia McMullen, Financial Post Published: Friday, January 04, 2008

BMO strategist Donald Coxe warns credit crunch and soaring oil prices will pale in comparison to looming catastrophe

A new crisis is emerging, a global food catastrophe that will reach further and be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire, Donald Coxe, global portfolio strategist at BMO Financial Group said at the Empire Club's 14th annual investment outlook in Toronto on Thursday.

"It's not a matter of if, but when," he warned investors. "It's going to hit this year hard."

Mr. Coxe said the sharp rise in raw food prices in the past year will intensify in the next few years amid increased demand for meat and dairy products from the growing middle classes of countries such as China and India as well as heavy demand from the biofuels industry.

"The greatest challenge to the world is not US$100 oil; it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically," he said.

The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.
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Wheat at $9.45 a Bu.; Beans (Jan., 2008 Contract) at around $11.50 a Bu.; and Corn at $4.66 a Bu. in January is more than a little bit scary.

The thought/principle of using food supplies as a weapon by the US has always been firmly denounced by politicians of all stripes here in the US in the past (as far back as I can remember). Occasionally, some pol would slip up, and then would get firmly, but throughly trashed from all quarters for echoing the unthinkable. And deservedly so.

But do those same rules still apply in today's world? - particularly with oil pricing where it is, where there's more than a little feeling in the general public that OPEC member nations are not only gouging us for oil, but are also baiting us at every turn.

I'm in no way advocating this approach, but I could see rapidly growing support for economic warfare through restrictions on food supplies (particularly exports) developing here in the US.

Thoughts and Comments appreciated.