Or, how long does it take the Street to identify an elephant in the room? Apparently the answer to that question is a time period longer than should be the case. As portrayed in the chart below, Agri-Food prices have been rising fairly dramatically thus far this year. With an average gain of about 10% since the beginning of the year, eating is becoming far more expensive. Rather than a short-term phenomenon, higher prices for Agri-Foods over time are part of the future, an unavoidable one.

Prices rise for Agri-Foods when demand grows faster than supply. The world wants to eat more dairy products, butter included, and broilers, or table chicken. Supply simply does not respond in short-term to that increased demand. Response to higher demand by the marketplace is simply to raise prices for the commodity. A milk cow does not check the internet each morning for wholesale price of butter, and decide to produce more milk fat in response to higher quotes. And you can be assured that laying hens to do not try to lay more eggs when chicken prices are rising.

As chart to right portrays, prices for Agri-Commodities have been rising for quite some time, and recently reached a record high. That history suggests that something different has been happening with Agri-Commodity prices. That something different is that world demand for food is beginning to bump up against the world’s long-term ability to supply food. Higher prices for beef will not change the reality that it takes about nine months for a calf to be born. The internet cannot change that fact. Higher prices for Agri-Commodities will not create another acre of arable land in either China or the U.S.

In top chart prices per pound for U.S. broilers, table chicken, are plotted. Those prices recently hit another new high. Chicken is both a price bargain relative to beef for consumers and an economic bargain to the world. To produce a kilogram of chicken requires slightly more than two kilograms of grain while with beef thirteen kilograms are required. (Agrimoney(2013), p. 150) Higher demand for chickens means that demand for feed grains should rise. As the price of soybeans shows in the second chart, strong global demand for animal feed has pushed up the prices of soybeans. Regardless of growth rate of China’s GDP, the chickens in that country still eat every day. More than half of soybean harvest is destined to become chicken feed. Soybeans

And we can assure you that the internet cannot produce a single soybean. Still requires a farmer in the field using equipment, fertilizer, and seed. Still requires someone to gather, process and move those soybeans around the world in order to feed global consumers. In that process money, our real interest, flows from consumers to farmers. Agri-Equities are the ultimate benefit of this flow of money, and they remain largely ignored by the investment community.

Ned W. Schmidt,CFA is publisher of The Agri-Food Value View, a monthly exploration of the Agri-Food Super Cycle, and The Value View Gold Report, a monthly analysis of the real alternative currency. To contract Ned or to learn more, use either of these links: www.agrifoodvalueview.com or www.valueviewgoldreport.com

The news on uranium mine closures seems to be coming regularly now.

Last week, I wrote about major producer Cameco delaying its Millennium mine in Saskatchewan. And this week we got news of another high-profile producer that’s being lost to the market.

That’s the Imouraren mine in Niger. Being developed by French nuclear major Areva.

Imouraren had been scheduled to open this year, alongside Areva’s two existing mines in Niger. But sources in Niger’s mining ministry were quoted as saying that development of the project will now be suspended–as part of a new production agreement Areva is signing in the country.

Once again, the reason for the deferral is reportedly simple economics. With Reuters noting that Imouraren won’t proceed “until uranium prices improve.”

This is another significant loss for global uranium supply. The Imouraren mine had been slated to be a sizeable one–with a total resource of more than 100 million pounds. Production capacity had been announced at over 11 million pounds of uranium yearly.

None of that will now see the light of day. At least not for the foreseeable future.

It’s possible that some of the delay is a result of politics. With Areva lately having been locking in a disagreement with Niger’s government about fiscal terms for uranium production in the country.

But it’s also completely plausible the delay is simply a matter of low prices. Fitting with the pattern we’ve seen lately of almost every major uranium development globally being shelved. From Canada to Africa to Kazakhstan, there just doesn’t seem to be any appetite for new projects in current market environment.

That’s not surprising at today’s prices. Which see uranium oxide sitting at an ultra-low $28 per pound on the spot market.

Few producers new or old are making money at these rates. We’ll see how long supply can hold out if mining developments keep disappearing.

Here’s to a shrinking market,

dforest@piercepoints.com / @piercepoints / Facebook