People can understand that commodities such as grains are bought and sold, with prices going up and down based on factors such as harvests. It’s not as easy to tolerate high prices when the reason is a big fat bonus and games by traders. We’ve seen this story play out in recent years thanks to the ethanol and it has to stop. Food is food, so let the gamblers take their games somewhere else. The Guardian:

“My contacts in the City tell me the price of wheat is soaring because of financial speculation,” he said. “It’s not good for farmers or consumers. What is happening is fundamentally wrong and obscene.”

The boss of Kelly Turkey Farms in Essex warns that consumers can expect to pay up to £3 extra for their birds while Waitrose confirmed that its turkeys will cost 5% or 6% more than last year.

The increase in feed prices comes despite strong commodity supplies. Wildfires destroyed some Russian wheat during the summer, but the US and other grain producing regions have had good harvests.

Since the financial crisis began, market analysts have watched speculative money pouring into commodity derivative markets, including food. Many experts link this activity by banks and hedge funds to recent volatility and sudden inflation in the retail costs of food and energy.