The era of cheap food is coming to an end!

[Trinity]

Thought this might be of interest to all ye working towards self sufficiency! Published today on the front page of The Independent (UK - for those of you not in the UK - this is a mainstream newspaper)

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The fight for the world's food
Population is growing. Supply is falling. Prices are rising. What will be the cost to the planet's poorest?

Go to: ORIGINAL ARTICLE

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.


By Daniel Howden
Published: 23 June 2007

[Jack]

Gidday

Now that's interesting. But pray tell me why is corn of pivotal importance for the production of milk, cheese butter and beef. Non of those hay anything to do with corn, down here at least as we just use grass.

[Wombat]

Gidday

Now that's interesting. But pray tell me why is corn of pivotal importance for the production of milk, cheese butter and beef. Non of those hay anything to do with corn, down here at least as we just use grass.

Feedlots Jack!

Nev

[Jack]

Gidday

Oh!

Forgot about those sortsa things over there.

[Millymollymandy]

Corn - do they mean maize or wheat? Maize is grown everywhere round here as cattle feed.

I had to Google feedlot as I have never heard of that before.

[Wombat]

Corn - do they mean maize or wheat? Maize is grown everywhere round here as cattle feed.

I had to Google feedlot as I have never heard of that before.

Insert gobsmacked smiley! Wow, they are a no1 environmental nightmare M3. Very big in the US because they are "efficient". If you see anyone advertising "gain fed beef" = feedlot!

Nev

[Millymollymandy]

We only get French beef in France Nev (more's the pity because it's like chewing on a piece of biltong/jerky ). Consequently apart from mince we don't buy the stuff.

Quite what that has to do with me not knowing how beef is farmed in the US, I don't know! but I don't know anything about their farming practices, well apart from GM maize of course!

[madasafish]

Imo it will get worse- a lot worse.

Why?
Simple really. Bigger returns per acre from growing ethanol producing crops.

Agricultural land is limited (in US and Europe).

So food - grain food - output will fall. So the days of cheap cheap chickens and turkey meat will eventually be numbered.

I understand the financials are compelling.

[catalyst]

Imo it will get worse- a lot worse.

Why?
Simple really. Bigger returns per acre from growing ethanol producing crops.

Agricultural land is limited (in US and Europe).

So food - grain food - output will fall. So the days of cheap cheap chickens and turkey meat will eventually be numbered.

I understand the financials are compelling.

i think the days of cheap ANYTHING are numbered. in the last 100 years we have squandered and wasted on an insane scale. instead of sorting out a susatainable future for us all, our wonderful leaders prefer to pay their friends to make submarines that can destroy the planet and bombs that can search out a specific target. crazy world - expect it to get crazier.

[biffvernon]

Wheat prices in UK are now almost back to where they were in 1980 (unadjusted for inflation). Perhaps it will soon be worthwhile for a dairy farmer to keep a cow or two. Food is still far too cheap.

[Karen_D]

The other thing to consider is that two companies control roughly 80% of the world's grain supply.

Cheerful thought, isn't it?

[Cornelian]

Which two companies are those Karen? I am fascinated (and horrified) by the future of food.

[biffvernon]

Nestle, Cargil and Kraft. Hmm, that's three. Not sure which of them is the third biggest.

[Cornelian]

Would Monsanto be in there? I know it controls a great deal of the grain (GM grain) in third world countries, as well the US.

[biffvernon]

Wikipedia is pretty good on the facts for these companies. Cargill is the interesting one as it is still a private family business - the second largest such after Koch Industries, who are more oil than food.