The Consumer Price Index remained unchanged in July, a sign that we’re heading into a disinflationary period. Year-over-year inflation is still missing the 2.0% target, topping out at 1.4%. This is another sign of central bank failure.
But decreases in energy were offset by increases in food. This is a residual effect from the drought conditions that have plagued the US this summer. We’re finally starting to see the expected price spike. For the moment it’s more concentrated in the Producer Price Index, but before long producers will push those increases onto consumers. Raw foodstuffs are getting more expensive.
The fact that this hasn’t been even more pronounced, according to this Big Media article in the Washington Post, can be attributed to genetic modifications in corn crops:
This year, the worst U.S. drought in half a century could cause $18 billion in damage to corn, soybean and other key crops. On the heels of a Texas drought last year that cost nearly $8 billion, farmers are more interested than ever in innovations that could make crops more resilient. That includes improved farming practices, better plant-breeding techniques and even — most controversially — genetic engineering [...]
“I’ve been surprised so far. The plants are responding well,” said Clay Scott, a Kansas farmer who planted two plots of Monsanto’s genetically engineered DroughtGard Hybrids among his 3,000 acres of corn. The experimental strain, which carries a gene that helps it draw water more gradually from the soil, is slated for wider release in 2013. “The ear size, kernel counts, the ear weights look good,” Scott said. But, he cautioned, “pretty corn doesn’t always result in yield.”
If this all reads like an advertisement for Monsanto, don’t worry, there are quotes from Monsanto marketing officials (!) later in the article. The drought offers the world’s largest hoarder of seeds to make the case that their genetically modified organisms will help us adapt to climate change and withstand extreme weather and resource scarcity. What won’t go mentioned is how Monsanto forces a constant stream of profits by creating seeds that cannot be saved by farmers, even criminalizing efforts to do so.
The theory that GMOs can save us from drought only works if drought is the only problem that farmers face. A drought year could be followed by a flood year in our new world of global weirdness. So you could need new seeds every season. Which actually suits Monsanto just fine, but it could take so long to test and implement these products that they will simply come too late to help salvage crop yields. Traditional methods and improvements in farming give us a better chance in the near-term. But ultimately, drought conditions are hard for farmers to sidestep. Plants need water.
But if our burned planet forces us to use GMOs because only those crops will stand up to the heat and lack of water, the least that we can do is to inform the public of what they’re eating. California will have a ballot measure in November that would force mandatory labeling of GMOs on all food product that use them.