As Food Prices Soar, Some Shortages Appear

A growing global shortage of food staples such as rice has led the head of the World Food Program to say a "silent tsunami" of hunger is sweeping through some of the world's poorest nations.

What's more, "Global food stocks for basic commodities like rice, wheat, other basic commodities have fallen so low that we're actually starting to see shortages here in the U.S.," Scott Faber of the Grocery Manufacturers Association observed to Early Show co-anchor Maggie Rodriguez Monday. "This is a significant problem not just here, but especially in parts of the world where people are living on less than $1 a day."

CBS News correspondent Bianca Solorzano reports actual and feared shortages, which accompany skyrocketing prices, have led some stores to start rationing the hardest-hit staples.

In a warehouse store in Mountain View, Calif., manager Stephanie Gordon told CBS News she's "been with Costco for 21 years and I haven't seen it like this before," with many consumers stocking up on staples such as rice out of growing concern over availability. It's limiting amounts shoppers can scoop up.

The hottest seller at that Costco at the moment? Fifty-pound bags of jasmine rice -- even though rice's price has gone through the roof. A 20 pound bag that sold for $9 just two months ago now goes for $16.

Other groceries are also way up over this time last year: flour by 13 percent, milk by 10 percent and eggs by 30 percent.

The short supplies contribute to rising prices of food, along with zooming costs of the fuel to transport it.

What's behind the dwindling stocks?

Grocers say it boils down to increased global demand for protein, particularly in Asia; increased demand for grains to feed the livestock to produce the protein; and increased demand for grains to make ethanol to meet new fuel demands.

Faber pointed out to Rodriguez that, "The price of dairy products has risen by about 20 percent over the last three years, especially as the price of corn, which is the primary ingredient in a cow and ultimately in milk and cheese, has skyrocketed over the last few years. The price of eggs has also grown by about 70 percent over the last three years, again, because of the rising cost of feeding corn to chickens.

"There are lots of reasons that these products are going up, but by far the biggest one is our decision to divert about 30 percent of our corn into our fuel supplies in the form of corn ethanol."

Another factor, Faber says, is "that more people, especially in Asia, have more money and they're buying more food -- especially proteins, meat. That's increasing global demand generally. Obviously, weather is a factor. There's been poor weather in places like Australia.

"But by far the biggest factor, and the one factor Congress has under its control, is the decision to make so much of our food into fuel, and at a time when fuel prices are rising so much, it doesn't seem to make much sense to do that."