Economy in Crisis: Rice Shortages in the U.S.

While the press is talking about Rev.Wright America is experiencing unprecedented food shortages:

Reports of India and Thailand cutting exports of high-priced and fragrant gourmet rice have sent Asian families and restaurant owners in North Texas scurrying to buy what they can.

"When people see the prices, they say, 'Something is wrong,'" said Surinder Singh, owner of southwest Fort Worth's India Bazar, which specializes in South Asian and East European groceries. "Then they shop all around, even go to Arlington. When they come back, they're angry but they'll buy three 20-pound bags instead of their usual one."

Singh still has supplies, but they're getting tighter.

Costco and Sam's Club now allow a maximum of two to four institutional-size bags per customer, depending on supply.

On Saturday, Costco's Fort Worth store was sold out of both Indian basmati and Thai jasmine. And a Sam's nearby on Bryant Irvin Road has been out of basmati rice "for months," an employee said. Its Westworth store still had 20-pound bags at $15.42.

Richard Galanti, Costco's chief financial officer, said panic buying at his chain began about eight days ago in the San Francisco Bay area when a store manager limited sales to a single bag in response to a run on supplies. A local reporter who happened to be shopping wrote a story that got picked up around the region, then nationwide, spreading panic buying, he said.

For the week ending Sunday, Costco sold four times its typical volume of rice in that region, which includes Washington, Oregon, Montana, Alaska and Hawaii, Galanti told the Star-Telegram.

If that weren't bad enough, there's still the mortgage crisis:

The number of U.S. homes heading toward foreclosure more than doubled in the first quarter from a year earlier, as weakening property values and tighter lending left many homeowners powerless to prevent homes from being auctioned to the highest bidder, a research firm said Monday.

Among the hardest hit states were Nevada, Florida and, in particular, California, where Stockton led the nation with a foreclosure rate that was 6.6 times the national average, Irvine, Calif.-based RealtyTrac Inc. said.

Nationwide, 649,917 homes received at least one foreclosure-related filing in the first three months of the year, up 112 percent from 306,722 during the same period last year, RealtyTrac said.

The latest tally also represents an increase of 23 percent from the fourth quarter of last year.

RealtyTrac monitors default notices, auction sale notices and bank repossessions.

All told, one in every 194 households received a foreclosure filing during the quarter. Foreclosure filings increased in all but four states.

The most recent quarter marked the seventh consecutive quarter of rising foreclosure activity, RealtyTrac noted.
[...]The surge in foreclosure filings also suggests that much-touted campaigns by lawmakers and the mortgage lending industry aimed at helping at-risk homeowners aren't paying off.

Hope Now, a Bush administration-organized mortgage industry group, said nearly 503,000 homeowners had received mortgage aid in the first quarter. Most of the aid was temporary, however.

Pennsylvania was a notable standout in the latest foreclosure data. The number of homes in the state to receive a foreclosure-related filing plunged 24.4 percent from a year earlier.

Sharga credited the decline to the state's foreclosure relief measures, noting that cities such as Philadelphia put in place a moratorium on all foreclosure auctions for April and implemented other measures aimed at helping slow foreclosures.

Wheat prices have doubled in only a few months:

Breaking the dollar barrier "scares me," said the Bronx-born owner of Bethesda Bagels. But with 100-pound bags of North Dakota flour now above $50 -- more than double what they were a few months ago -- he sees no alternative to a hefty increase in the price of his signature product, a bagel made by hand in the back of the store.

"I've never seen anything like this in 20 years," he said. "It's a nightmare."

What's a big part of the problem:

But underlying this food inflation are changes that are transforming U.S. agriculture and making a return to the long era of cheap wheat products doubtful at best.

Half a continent away, in the North Dakota country that grows the high-quality wheats used in Fleishman's bagels, many farmers are cutting back on growing wheat in favor of more profitable, less disease-prone corn and soybeans for ethanol refineries and Asian consumers.

"Wheat was king once," said David Braaten, whose Norwegian immigrant grandparents built their Kindred, N.D., farm around wheat a century ago. "Now I just don't want to grow it. It's not a consistent crop."

Shoved aside by other crops
In the 1980s, more than half the farm's acres were wheat. This year only one in 10 will be, and 40 percent will go to soybeans. Braaten and other farmers are considering investing in a $180 million plant to turn the beans into animal feed and cooking oil, both now in strong demand in China. And to stress his hopes for ethanol, his business card shows a sketch of a fuel pump.