Updated november 2, 2011 - SCARY IT IS !
French people KNOW food is getting extremely expensive. Anybody doing some shopping also knows. $ 1 for one Tomato is no exception and when the price for a food item goes up from $ 1 to $ 1.20 this is in fact a 20% increase.
Volcanic activity and eruptions are an predominant factor for bad crops. This will add fire to food prices going up as a consequence of Monetary inflation.
+ 150% year to year or FOOD has become VERY EXPENSIVE and will become even more expensive in 2011 ! Since 2004 agricultural prices have gone up by 267% when expressed in Dollars and 215% when expressed in Euro.
Agricultural commodities traditionally suffer during depressions - until Hyperinflation starts....Agricultural products are Low Order Consumer Goods! - and the dramatic rise we have now is an indicator we're going to see a lot more inflation soon.
Agricultural products are LOCG (low order consumer goods). 2009 proofs the price action of 2008 was a Bear Trap. September 3, 2010 we have a CLEAR fresh breakout! There is no doubt this will have a serious impact on the cooked official inflation figures. The price of Agricultural products fluctuates in a different way compared to the price of other commodities as a shortage in supply can and is adjusted a lot faster. Farmers automatically plant more crops when prices go up. Miners most of the time need 5 to 7 years to adjust production. The price of crude oil is also important for farming as it affects the exploitation price (fertilizers are also oil derivatives).
Over the last year, a large number of food commodities have broken long-term inflation adjusted downtrends. This suggests that while characteristically volatile and subject to weather events, most food commodity prices can be expected to sustain levels above their historical norms during corrective phases.
The FOOD factor is very important for Society. A shortage of food or expensive food has historically always resulted in major shifts of society. Belgian became independent in 1830 (there was a depression at that time) and the driving forces behind the French Revolution were the agricultural disasters of 1770-90. [ remember the people standing at the gates of the King's palace in Versailles complaining there was no food for the children...and Marie-Antoinette telling them that in this case, they should eat Cake. Today is not different]
The situation in North-Africa and the Middle-East is a direct consequence of expensive food. Those countries feel the pain more as their fiat currencies have been traditionally weak ones because of the mismanagement by their Rulers.