Phil: So, Sally, let's talk about how this extreme weather can push food prices, even higher. Consumers are complaining now, just about everything in fact, last night on 60 minutes, they pushed President Biden on the price of food. They brought that up and talked about inflation but according to this report from CNN business food prices are gonna continue to go up.
Sally: Yes, Phil, we have extreme weather conditions going on right now that are affecting these major parts of our agricultural system here in the country. We've got drought going on, we've got flooding going on. Our fruits and vegetables and nuts in our supply is affected because of California and Texas being the states that mostly provide those. And they are just under some really bad weather right now, some extreme heat, and it doesn't look like it's going to get much better soon.
Phil: Not at all. And in fact, what we're seeing according to the bureau of labor statistics is that, what's happened in the west as you point out, California, what's happening is they're keeping land empty, they're pulling up orchards, they're reducing livestock herds, and the yields are going down. In fact, the rice acres have dropped by 55% this year. Most of the rice that comes from California, and it's only second to Arkansas, I didn't realize that Arkansas actually was growing rice, and had the rice fields, but that's about 900 million just in California a year. And the problem, this is medium grain rice. So that's found in sushi and risotto and basically what this report is saying is we're gonna see more and more climate-based problems that we've got which really just underscores the fact that we need more indoor farming and controlled environments.
Phil: In fact, Paul Griffin, who's a professor management at UC Davis. One of the best ag schools that we've got in the nation, finds that for every degree over 77 degrees, that translates to an annualized loss of sales of 0.63%. Now I know that doesn't sound like a lot, but it is. And a profit margin decrease of .16%. What that also means is as a result of that, because of a heat spell, the stock prices, you know, the Dow Jones dropped by an average of 22 bases points. Now those are really important and we've gotta understand that whether it's California, Texas, Arizona, I don't care where it is, because of climate change prices are gonna go up. There was another report probably about nine months ago on 60 minutes that talked about the fact that in France, the champagne district of France, they can't grow champagne grapes anymore. It's too hot. So they've had to move that crop up to England, you know, very far away. And, the problem is that you can't call champagne grapes that come from England, champagne. So that becomes the sparkling wine thing. So we've really gotta take a huge look at what's going on.