Your morning meal is about to get a lot more expensive. Prices for such breakfast staples as coffee, bacon, orange juice and cereal grains have soared this year as the forces of nature threaten to limit supplies while large investors gamble markets have more room to climb.
The El Nino weather system can bring floods or drought. Lately, it’s been threatening the coffee crop in Brazil with heavy rains.
Prices for Arabica beans, the most popular coffee, are up by 60 per cent this year amid fears the world’s biggest grower of everyone’s favourite morning buzz will face flooded fields and ruined crops.
Brazil, which grows a third of the coffee drunk around the world, was until recently in a drought that started the bean’s jump to a two-year high.
The piglet-killing virus that has been ripping through U.S. hog farms for a year has made its way into Canada and Mexico. Prices for lean hogs in Chicago have soared by 47 per cent in 2014 as the U.S. herd size has fallen by 3 per cent to the lowest head count in seven years.
Retail bacon prices tracked by the U.S. Department of Agriculture are up 11 per cent. Farmers have fewer hogs to sell, and at the same time meat processors such as Hormel and Smithfield are trying to boost production as warm weather and barbecue season approaches.
The incurable disease, which does not affect humans or food safety, has been in Canada since January. But it will take six to eight months before the Canadian farms that are affected begin to show a drop in the number of pigs they send for slaughter.
Orange juice futures have risen by 12 per cent this year as traders bet on smaller supplies from Brazil and Florida. Brazil’s drought has stressed trees and reduced the expected crop size in the country that supplies more than half of the world’s orange juice.
Florida, which is the world’s second-biggest orange grower, has seen its groves invaded by a bug, the Asian citrus psyllid. The tiny creatures carry citrus greening disease, which hinders tree-root growth and makes fruit fall off trees prematurely.
Little rain in Florida is also adding to fears the harvest will be much smaller than usual. The U.S. Department of Agriculture has said the next harvest, which begins in the fall and lasts for several months, will be 15-per-cent smaller than that of last year. If the grapefruits at the supermarket seem hard to tell from large oranges, it’s because citrus greening is causing them to drop early, making this year’s grapefruit the smallest since 1969, the USDA says.
Good weather helped farmers grow and harvest about 40 per cent more wheat, oats and other grains that are used to make breakfast cereal, but the bumper crop has not led to lower prices. Much of the grain crop has been stuck at elevators and farmers’ storage bins during a severe winter that has snarled rail transportation.
Prices for such cereal grains as oats and wheat have risen by 22 per cent and 14 per cent, respectively, in Chicago.
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