Number Cruncher: An Economic Lab On Food Inflation

Why bees are important to your wallet

Interest rates around the world are on the rise, in a bid to keep inflation under control. This week alone, we saw the European Central Bank hike, and the U.S. Federal Reserve rule out rate cuts. The Bank of Canada has said interest rates may rise soon too.

It’s a sign of things to come, says Bank of Montreal’s investment guru Don Coxe. He sees global interest rates rising another 200 basis points in the next two years, mainly because of … bees.


Bees have been dying in huge numbers in Canada and the United States since last fall, and the so-called die-back has spread to Europe. That’s sad if you’re a bee, but it’s also sad if you produce crops that depend on bee pollination. Mr. Coxe calculates that $15-billion (U.S.) worth of American crops are at risk. Alfalfa is in particular trouble, and alfalfa is a main component of hay, which feeds livestock.

Already, dairy is feeling the squeeze from soaring grain prices, which are swinging upwards not just because of ethanol production but also because of rising demand from increasingly discerning Asian palates. And a shortage of hay could prompt dairy and meat prices to spike.

The Globe and Mail