USA Today Wakes Up, Smells Coffee

A day late and a dollar short. That's the only way to describe the headline in USA Today ...

Global demand lifts grain prices, gobbles supplies

Some excerpts ...

Soaring energy costs may be roiling the financial markets, but world governments are also being rattled by a more basic form of inflation: sky-high food prices.

• Spiraling oil prices. Food needs fertilizer, and to make fertilizer, you need energy. The cost of natural gas, for example, is one of the biggest components in the price of ammonia and potash. While natural gas prices have tumbled from their 2005 highs, the price is still nearly double its 2001 levels. And to get food to market, you need trucks, trains and barges, all of which consume oil and gasoline, which have soared nearly 70% in the past 12 months.

• Government mandates for biofuels. In a bid to reduce oil dependence, many countries are requiring additional use of biofuels, such as ethanol and biodiesel. That, in turn, competes with food destined for the table — and increases the prices of what consumers eat.

XX Sean's note -- I'm actually looking for a short-term pullback in grain prices. Don't worry -- the long-term trend remains intact. But it should give us a great opportunity to buy again.

Check out my new gold and energy blog at MoneyAndMarkets.com