Globally grain stocks have shrunk to levels not seen since the early 1970s. Now to most this may seem like a seemingly unimportant fact. But this reality needs to be put into perspective.
In 1970 when the world was feeding itself out of the same sized grain inventories there were 3.7 billion people. Today there are over 6.5 billion people meaning the world is carrying near an extra 3 billion hungry mouths to 1970. We also now have a significant portion of the global crop being turned into biofuels – cereals and sugars for ethanol and oilseeds and tallows for biodiesel.
Once these biofuel plants are built they generally do not stop consuming feedstock. Shareholders do not make money from plants sitting idle. Other end users that have emerged are combustible stoves and water heaters in grain producing areas where low prices have encouraged feedstock substitution away from fossil fuels.
There are over 2 million corn stoves in North America alone that consume close to 25kg each per day in the cooler months – a total loss of 50,000 tonnes a day. What this serves to highlight is that grain prices have been too slow to appreciate to discourage waste in non food sectors. Once end using infrastructure is in place and consuming it generally will take significant grain price inflation to stop this consumption. Grain values in effect need to reach and in fact surplus energy parity values to prevent loss to biofuel end uses.
On the other end of the grain chain are the producers who are facing severe limitations in their ability to actually increase let alone maintain production. Depleting water aquifers, drought affected irrigation sources, competition for water and reduced rainfall are issues that are real and impacting on production output today.
And with an anticipated ‘grain boom’ there are also some such as myself who are predicting capacity constraints. For example, an inability for the fertilizer supply chain to be able to cope with demand from an agricultural sector keen to capitalise on rising prices. Potash fertilizer may be especially short moving forward. Hyperinflation in such inputs in itself is damaging to the output potential of third world cropping systems. Competition for land resources by staple food crops will be fierce and ‘illogical’ crop choices of the past (eg fruit crops) will be swept aside for fields of wheat, rice, corn and soybeans.
Output driven technologies such as transgenics will need to be embraced worldwide and embraced with fervour. Most would argue it is better to be fed than dead and anyone disagreeing with this is likely unwilling to be the first to go without as shortages unfold.
Environmentalism has failed for there is not one so called green group with a truly sustainable model of food production to promote today.
2007 will be a critical year for the world’s staple food supply. Because a willingness to try and produce our way out of an approaching deficiency in grain supplies may be overriden by constraints out of everyones hands – weather and water. There are already early signs that China’s 06-07 winter wheat areas are showing the effects of drought and areas within the Midwestern wheatbelt of the US have inadequate soil moisture levels. Here in Australia our summer crop plantings are well down from previous years. This developing crisis should concern everyone who eats food.
2002 Nuffield Scholar
President Australian Sandalwood Network