Much has been made about the run up in global food prices.  In some countries unrest has broken out in response to higher food prices.  Investors have clearly taken note.  The prices of the underlying commodities and the companies in the production chain have been on a tear of late.  There are two factors at play here.  One is the longer term ability of the world to feed itself.  These concerns have been around for a long time.  The second shorter term factor is the weather.  Weather has been wreaking havoc on some crops and the existence of a strong La Nina portends additional weather volatility.  For the Farm Belt higher prices lead to higher incomes.  For the masses of consumers higher crop prices lead to higher inflation, and in some parts of the world actual deprivation.  The challenge for investors is to disentangle to the two effect.  In today’s screencast we take a look at the knock-on effects of the run-up in food prices.

Items mentioned in the above screencast:

Times are good in the Farm Belt.  (Real Time Economics)

Corn pops again.  (Fortune Finance)

Soros+Farmland+South America=Hot IPO.  (Dealbook)

NASA satellites show a stronger La Nina.  (NASA)

“Simply put, a glance at [super] La Niña’s previous appearances shows up a pattern of dramatic climactic risk, especially at a time when food and fuel are already commanding high prices.”   (Houses and Holes)

Jeff Carter, “The inflationary pressures on the world economies will hinge more on the weather this year than anything else. ”  (Points and Figures)

Stocks to play higher food prices.  (Jubak Picks)

Daily chart of the PowerShares DB Agriculture ETF (DBA).  (Finviz)

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