“The United States Department of Agriculture (USDA) released its first projections of world grain supply and demand for the coming crop year: 2007/08. USDA predicts supplies will plunge to a 53-day equivalent-their lowest level in the 47-year period for which data exists.
“The USDA projects global grain supplies will drop to their lowest levels on record. Further, it is likely that, outside of wartime, global grain supplies have not been this low in a century, perhaps longer,” said National Farmers Union Director of Research Darrin Qualman .
from http://www.organicconsumers.org/articles/article_5660.cfm
Most important, 2007/08 will mark the seventh year out of the past eight in which global grain production has fallen short of demand. This consistent shortfall has cut supplies in half-down from a 115-day supply in 1999/00 to the current level of 53 days. “The world is consistently failing to produce as much grain as it uses,” said Qualman. He continued: “The current low supply levels are not the result of a transient weather event or an isolated production problem: low supplies are the result of a persistent drawdown trend.”
In addition to falling grain supplies, global fisheries are faltering. Reports in respected journals Science and Nature state that 1/3 of ocean fisheries are in collapse, 2/3 will be in collapse by 2025, and our ocean fisheries may be virtually gone by 2048. “Aquatic food systems are collapsing, and terrestrial food systems are under tremendous stress,” said Qualman.
Demand for food is rising rapidly. There is a worldwide push to proliferate a North American-style meat-based diet based on intensive livestock production-turning feedgrains into meat in this way means exchanging 3 to 7 kilos of grain protein for one kilo of meat protein. Population is rising-2.5 billion people will join the global population in the coming decades.
“Every six years, we’re adding to the world the equivalent of a North American population. We’re trying to feed those extra people, feed a growing livestock herd, and now, feed our cars, all from a static farmland base. No one should be surprised that food production can’t keep up,” said Qualman.
Qualman said that the converging problems of natural gas and fertilizer constraints, intensifying water shortages, climate change, farmland loss and degradation, population increases, the proliferation of livestock feeding, and an increasing push to divert food supplies into biofuels means that we are in the opening phase of an intensifying food shortage.
End of media release.
Thanks to Aaron Edmonds for this link.
Jennifer Marohasy BSc PhD is a critical thinker with expertise in the scientific method.
Why should we encourage a change away from growing plants for food to growning plants for fuel and clothing? Is this the best way to use scarce land, water and human resources ? Or will the problem be temporary as the demand for food pushes up grain prices to change priorities?
Eight years ago, when I was at a conference, one of the speakers opined that Europe would drop its constraints on engineered crops if there were a substantial crop failure.
That was before countries like Zambia jumped on the anti-GM bandwagon. What’s cooler than an African kleptocrat bouncing in the lap of European trade protectionists?
Europe is facing animal feed costs of $600 a ton if it insists on non-engineered soy and maize. When they feel a twinge of Africa’s misery, they’ll like modern crop production just fine.
If they don’t? Well, Europeans are breeding themselves out of existence, and meanwhile have made their farmers “hired gardeners.” They measure the success of agriculture by the number of bugs per acre.
People wonder why various populations of species go extinct, in spite of having food and a niche. The story of the Europeans may explain that, after they’re gone–they just weren’t interested in adapting any more.
Such a shame. Europe has invested so much of its culture, and billions of taxpayer dollars, in funding greenie groups around the globe to oppose the technology which could feed it.
With the collapse and discreditation of the Euro-funded greenies, Europe will find its culture in disarray. It’s what you get when you’re a greenie xenophobic culture and all you know is what you’re against, and not what you’re in favor of.
Goodbye, Old Europe, home of warfare and starvation. You have to learn all over again.
GM isn’t going to send curve shooting up, at best it’s just going to make more biofuel available.
GM will increase production … anyone thinking otherwise is deluded and likely had NO experience growing crops with and without weeds. Probably never grown themselves a vegetable garden.
Car engines are less irrational than humans SJT so you may well be correct in saying any production increases may go to biofuel production. Farmers won’t care who they sell to … nobody has genuinely cared for their plight since memory of the Second World War faded. There’s a calamity ahead and very few realise that. Its a shame because the economic fortunes of Australia post the mineral boom will once again be on the back of farmers.
Thank you for this post Aaron.
As a wheat grower, looking at projected grain prices this year, I can see there is something serious happening.
The last time nominal prices were near this level, our exchange rate was about 70% of what it is currently. So world grain prices are very high, due to weather in some northern hemisphere countries, and also to the fashionable shift to biofuel production, particularly corn and palm oil.
I have serious reservations about subsidised biofuel production – subsidies distort markets. They take land out of food (or fodder) production, or trigger forest clearing for said production. Biofuel production should not be subsidised. It is already impacting on the amount of grain available on the world food market, and on the price. The poorest will be hit the hardest.
If this short sighted subsidy madness continues, the world will have little option than to go all out for GM farming to grow a lot more food on less land. Or clear a lot more native vegetation.
Helen Mahar.
Helen, I have a slightly different view on the bio-fuel industry. I think farmers should be paid on an energy basis, and the only reason crops could be considered a fuel source is because they have been cheap.
Now we have competiton for agricultural output creating a stimulus for production in the present. In the future this production may well be required for food but at least the capabilities will exist to meet those demands. Without the bio-fuel spark farming was being taken for granted, and endusers have been living hand to mouth keeping prices low by running down stockpiles. Low prices don’t encourage production.
Suddenly now stockpile depletion is a real concern, and we haven’t had bumper years to restock. Whether the bio-fuel industry deserves subsidy or not, the boost in production capability and profitability to agriculture is sorely neded.
By volume ethanol only produces about 70% of the energy of petrol. Include into the equation fuel used to grow and harvest and distortion of cereal markets and you have a loss making exercise.
Rojo you have hit the nail on the head. Thankyou for giving me faith in the fact that there are others that can actually see why this mess has been created in the first place. Society has undervalued grains hence it is being wasted being turned into fuel and indeed meat for that matter. Given this has gone on for decades and we now realise we have to completely change the way we view agriculture, the ability to ramp up production is going To be SEVERELY restricted by underinvestment in the fertilizer sector, water infrastructure,new plant varieties (not one listed plant breeding biotech company on the ASX – that is a crime!), degraded lands, SHORTAGES OF ENERGY and the biggest crime of all, society overseeing the removal of the next generation of farmers from farms being forced to centralise in cities (big human resource drain, so where is the next generation of farmers given the average age of farmers is 58?) etc etc. Biofuels really were just the straw on the camels back. This story is far more complex and tragic.
Rog tell us something we don’t already know … its easy to stop. Ascribe energy par value to grains and prices will ration ‘wasteful’end using!
Society doesn’t undervalue grains, market manipulation does. Companies like Safeway have been doing very well out grains for years, but playing off suppliers against each other, and consumers. It’s too clever by half. Wesfarmers is the latest company to jump on the bandwagon of dominating a market.
No retailer will dominate food markets SJT. They have to pay market prices and the way all food markets are depleting if one commodity doesn’t pay adequately you simply shift to the next bull soft commodity. Unless food retailers want to vertically integrate and start producing they will have absolutely no power. Vegetable/fruit producers can simply move to grain production and cash in on the staple grains boom that is likely to never end. We are already seeing grapes being replaced by wheat here in the southwest of WA …
Anyone who follows the world markets for grain, food, feed and fuel will have early on noticed that converting crops to fuel doesn’t make sense.
On the other hand, anyone who follows what the Greenies have been begging for realize that this is what they have been begging for.
“Renewable fuels.” The mantra. Repeat that a thousand times and you’ll be close to what they’ve been saying for the last decade or so.
Well, okay, now they got what they’ve been begging for.
Will that mean high food prices? Be real. They want everyone to pay double for ‘organic’ food, so that’s not a serious complaint.
Will that mean people go hungry? Yeah, right. The greens have never cared about hunger in Africa, so what’s the big deal?
The big deal is, the greens will protest against anything at all.
Does it seem goofy to turn crops into fuel?
If you wonder about that, find a greenie and ask for an explanation. It won’t make sense, but there you go.
The fight for the world’s food
Published on 23 Jun 2007 by The Independent (UK).
by Daniel Howden
Most people in Britain won’t have noticed. On the supermarket shelves the signs are still subtle. But the onset of a major change will be sitting in front of many people this morning in their breakfast bowl. The price of cereals in this country has jumped by 12 per cent in the past year. And the cost of milk on the global market has leapt by nearly 60 per cent. In short we may be reaching the end of cheap food.
For those of us who have grown up in post-war Britain food prices have gone only one way, and that is down. Sixty years ago an average British family spent more than one-third of its income on food. Today, that figure has dropped to one-tenth. But for the first time in generations agricultural commodity prices are surging with what analysts warn will be unpredictable consequences.
Like any other self-respecting trend this one now has its own name: agflation. Beneath this harmless-sounding piece of jargon – the conflation of agriculture and inflation – lie two main drivers that suggest that cheap food is about to become a thing of the past. Agflation, to those that believe that it is really happening, is an increase in the price of food that occurs as a result of increased demand from human consumption and the diversion of crops into usage as an alternative energy resource.
On the one hand the growing affluence of millions of people in China and India is creating a surge in demand for food – the rising populations are not content with their parents’ diet and demand more meat. On the other, is the use of food crops as a source of energy in place of oil, the so-called bio-fuels boom.
As these two forces combine they are setting off warning bells around the world.
Rice prices are climbing worldwide. Butter prices in Europe have spiked by 40 per cent in the past year. Wheat futures are trading at their highest level for a decade. Global soybean prices have risen by a half. Pork prices in China are up 20 per cent on last year and the food price index in India was up by 11 per cent year on year. In Mexico there have been riots in response to a 60 per cent rise in the cost of tortillas.
It has even revived discussion of the work of the 18th-century British thinker Robert Malthus. He predicted that the growth of the world’s population would outstrip its ability to produce food, leading to mass starvation.
So far in Britain we have been insulated from the early effects of these price rises by the competitive nature of our retail system. But the supermarkets cannot shield us for long. The European Commission no longer has reserves to help cushion its citizens. Its mountains of unsold butter and meat and its lake of powdered milk have disappeared after reforms to the Common Agricultural Policy.
Then there is corn. While relatively little corn is eaten directly it is of pivotal importance to the food economy as so much of it is consumed indirectly. The milk, eggs, cheese, butter, chicken, beef, ice cream and yoghurt in the average fridge is all produced using corn and the price of every one of these is influenced by the price of corn. In effect, our fridges are full of corn.
In the past 12 months the global corn price has doubled. The constant aim of agriculture is to produce enough food to carry us over to the next harvest. In six of the past seven years, we have used more grain worldwide than we have produced. As a result world grain reserves – or carryover stocks – have dwindled to 57 days. This is the lowest level of grain reserves in 34 years.
The reason for the price surge is the wholesale diversion of grain crops into the production of ethanol. Thirty per cent of next year’s grain harvest in the US will go straight to an ethanol distillery. As the US supplies more than two-thirds of the world’s grain imports this unprecedented move will affect food prices everywhere. In Europe farmers are switching en masse to fuel crops to meet the EU requirement that bio-fuels account for 20 per cent of the energy mix.
Ethanol is almost universally popular with politicians as it allows them to tell voters to keep on motoring, while bio-fuels will fix the problem of harmful greenhouse gas emissions. But bio-fuels are not a green panacea, as the influential economist Lester Brown from the Earth Policy Institute explained in a briefing to the US Senate last week. He said: “The stage is now set for direct competition for grain between the 800 million people who own automobiles, and the world’s 2 billion poorest people.”
Already there are signs that the food economy is merging with the fuel economy. The ethanol boom has seen sugar prices track oil prices and now the same is set to happen with grain, Mr Brown argues. “As the price of oil climbs so will the price of food,” he says. “If oil jumps from $60 a barrel to $80, you can bet that your supermarket bills will also go up.”
In the developed world this could mean a change of lifestyle. Elsewhere it could cost lives. Soaring food prices have already sparked riots in poor countries that depend on grain imports. More will follow. After decades of decline in the number of starving people worldwide the numbers are starting to rise. The UN lists 34 countries as needing food aid. Since feeding programmes tend to have fixed budgets, a doubling in the price of grain halves food aid.
Anger boiled over this week as Jean Ziegler, the UN special rapporteur on the right to food, accused the US and EU of “total hypocrisy” for promoting ethanol production in order to reduce their dependence on imported oil. He said producing ethanol instead of food would condemn hundreds of thousands of people to death from hunger.
Population and starvation
* Robert Thomas Malthus was a political economist who shot to prominence in late 18th century Britain. His Essay on the Principle of Population influenced generations of thinkers with its prediction that the world’s population would outgrow its food supply, prompting starvation on an epic scale. “The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race,” he wrote. “Gigantic inevitable famine stalks in the rear.” But Malthus predicted disaster to strike in the mid-19th century.
http://www.energybulletin.net/31263.html
Malthus is outdated.
We now have a situation where those with enough disposable income to hire greenies to stomp on competitive markets will cast them into eternal poverty and misery.
Malthus never considered an economy with so much excess wealth that it could be turned as a weapon against emerging economies.
Greenpeace has this worked out though. And it’s profitable for them.
Schiller
that “invisible hand” seems to have turned into some kind of cargo cult figure. The person who invented it only said it was as if there was an invisible hand, it doesn’t really exist. The market place hasn’t necessarily got an answer to anything.
SJT,
Well, we got a dose of the “Visible Hand,” and it died on its own. The Soviet Union is now an historical artifact.
You don’t really have much to say about this, do you? Talking about cargo cults is rather shabby and misplaced.
The invisible hand is about to give us all a quick uppercut when increase in money supply (M3)is truly accounted for in correctly reported inflation figures .Increases in M3 worldwide of in excess of 10% is diluting the current pool of cash by something of that order.This is inflation,not some butchered seasonally adjusted figure of 2.5%. Check the back page of The Econonmist and have a look at articles by Jim Willie and Richard Daughty at Kitco.com
Schiller
false dichotomy. There are many more variations of political systems out than the US vs USSR, many of them very successful. The invisible hand only works to the extent that trade between people produces an outcome favourable to both. It cannot cope with problems that occur outside that paradigm.
SJT,
You’re creeping me out totally, dude. You mean there’s something wrong with the paradigm where people work out things they like?
Man, oh, jeez… are you talking about the Hand of Gaia, or what?
Wait! I see it! The Hand is in my pants, and it’s not the Hand of Gaia, it’s the Hand of Greenpeace! And the Hand is taking my wallet!
SJT, your ‘outside paradigm’ is nasty! (whack, whack) Dammit, get this thing offa me! Help!
Decrease in production is due to less intrest of farmers in farming the reason that farmer’s are getting enough return from farming so they are divering towords other source of income.So we all farmers must unit to gether to demand some regural fix income other than farm income e.g farmers pension etc.