Tom Purcell, 5/5/2008 [Archive]

Banking On Food

Banking on Food

By Tom Purcell

"I was upset about the rising cost of food, too. But then I got smart."


"Look, when food costs began soaring, I complained as much as the next guy. I complained about fuel costs driving up shipping expenses, which drove up the cost of produce and meat. I complained about the emerging middle class in India and China."

"What's wrong with an emerging middle class?"

"Nothing, except that middle class folks have the means to eat well. They're driving up the demand for decent grub, which is also driving up costs. I spent a lot of time complaining about Congress."

"What does Congress have to do with rising food costs?"

"Our esteemed politicians are pumping big subsidies into ethanol production. Ethanol is made from things such as corn. Today, nearly a quarter of our corn production is being used to make fuel. That has increased the demand for corn, which has driven up its cost. It's driven up the cost of beef, too -- cows eat corn."

"That's no good."

"But the thing that really got my goat is the speculators. According to The Washington Post, they've pulled their money out of the housing market and pumped it into grain futures. On top of all the other food woes we've been having, there is a drought in Australia, which means there is a wheat shortage, too."

"Let me get this straight: The same investors who helped create a housing bubble are now driving up the cost of grain futures?"

"That's right. And if Americans think they have it bad, imagine how hard it is for the world's poor to afford dinner nowadays. Riots are breaking out all over the world as frustrated folks struggle to feed themselves."

"That is terrible. Could you explain what you mean when you say you got smart?"

"Oh, that's easy. You see, I'm just an average Joe trying to feed my family. I concluded there is no way I can beat the conditions that are driving up food costs, so I may as well join them."

"Join them?"

"I read an article by Brett Arends in The Wall Street Journal. He encouraged folks to load up their pantries with food -- that with food inflation running at 4.5 percent a year, food was a better investment than keeping your money in money-market funds. That gave me a great idea."

"Go on."

"Well, I pulled all my money out of the bank and bought food -- lots and lots of food. I built a giant refrigeration unit in my back yard and packed it full of ground beef and chicken. With ground beef and chicken up more than 5 percent, I sold it for a nice little profit."

"You are buying and selling meat?"

"For starters, I took my profit and invested in cereal. With grain costs skyrocketing, I got an 8 percent return on a few thousand boxes of Lucky Charms. And then I poured those profits into milk, cheese, bananas and peanut butter. Those investments are growing 10 percent a year."

"You're a regular General Mills."

"I was rolling now and used my profits to invest in flour and rice. Both are shooting up more than 13 percent a year, and I found myself sitting on a pile of cash. It was about then that I struck the mother lode."

"The mother lode?"

"Eggs. The wife and I built a barn out back and stocked it with hundreds of chickens. The cash began really rolling in then. The cost of eggs has shot up more than 30 percent this year."

"Didn't your neighbors complain about all those chicken in your backyard?"

"My neighbors are my biggest investors. The point is the sky is the limit. Arends says the trend is for food costs to get even worse. That will be good for business."

"I have to praise you for your ingenuity. What do you plan to do with your profits?"

"Invest in gasoline. The wife and I are clearing just enough to fill our tank once a week."

Tom Purcell is a humor columnist nationally syndicated exclusively by Cagle Cartoons. For more info call Sales at (805) 969-2829 or email Visit Tom on the web at or e-mail him at

RESTRICTIONS: 'Tom Purcell's column may not be reprinted in general circulation print media in Pennsylvania's Allegheny, Beaver, Butler, and Westmoreland Counties. It may appear only in the Pittsburgh Tribune-Review and its sister publications."

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