Food Prices Hover at Historic Highs

[WIP]

The problem I have with a lot of news and political discussion is how subjects are compartmentalized as if they have no effect beyond their narrow topic boundaries. We can thank the mainstream news media for this, as they prefer to jump to the story of the day, or story of the hour as if it is something totally disconnected from everything else around it....and then it's totally ignored when they run off and chase the next story!

Well, here is an example of how environmental issues of climate change and overpopulation affect us directly in the pocket book: Extreme Weather and Asian Demand are Poised to Boost Prices Even Higher

Food prices are climbing back to historic levels, the UN Food and Agriculture Organisation (FAO) reports. Prices increased by 1.3% in June due to worries over bad sugar harvests from “a spell of two months without rain.”

Food prices are poised to increase:

Goldman Sachs said it expected further increases in a wide range of commodity prices this year and into 2012 – in food, as well as energy and metals – on the back of strong demand from Asia.

However, Goldman is confident that now is a good time to get back into commodities. “We expect this [Asian] demand growth will be sufficient to tighten key commodity markets over the next six to 12 months, particularly for those markets where supply constraints will become binding even on slower economic growth,” said Jeffrey Currie, Goldman’s global head of commodities research.

Joe Romm points out the unsettling analysis that for Goldman, food shortages and famines...all forms of suffering and misery are just another business opportunity for investors. And the extremely poor, who spend upwards of three quarters of their income on food, are competing with the West and the new burgeoning middle classes in the third world who want more meat and exotic foods:

Growing global wealth, especially in China in India, is driving demand for more luxury foods, contributing to ballooning prices. But FAO warns that “potentially catastrophic” climate change will be the dominant driver of prices into the future.

One thing that Climate Progress and the primary source - a recent FAO Report on food commodity prices doesn't cover is that rising food prices and scarcity is the likely catalyst behind growing unrest in many regions of the world. There will be fights over food, and the worst disaster scenario I can see is 'what happens if two nuclear-armed third world nations go to war over water rights and food scarcity...I'm thinking Pakistan and India here! This is probably the most likely scenario for a nuclear war in the near future.

[TimG]

Extreme Weather and Asian Demand are Poised to Boost Prices Even Higher

Of course the premise is complete nonsense. We have always had good years and bad due to weather variations and there is no evidence that the recent bad weather events are any worse than those experienced in the past.

The real driver behind food prices is economic growth in Asia which increases demand.

That said, even if climate had an on food production, the statistics show that human ingenuity is still increasing agricultural productivity:

http://1.bp.blogspot.com/-XJxevK4SmGo/TeuPiXHAc1I/AAAAAAAAA-0/AwUVyZ1D8WY/s1600/nyt.food1.jpg

Your insistance that farmers are unable to adapt to climate changes is not supported by any evidence.

As for the impact on the poor: higher food prices make the poor, who often produce food, much richer.

http://rogerpielkejr.blogspot.com/2011/06/uncertainty-in-food-insecurity-what-do.html

[August1991]

As for the impact on the poor: higher food prices make the poor, who often produce food, much richer.

That's a very good point.

In the short time span of about 20 years, several hundred million people in India and China (as much as 20% of the world's population) leave dire poverty and reach a standard of living where they are free to make some choices.

And what does the World Bank do? Complain about food prices.

----

I think the problem is that the World Bank (and Leftists in general) can take no credit for this phenomenal change in living standards among ordinary people in China, India and around the world. (The poster child of the World Bank and the Left is Haiti: ever dependent on another do-good project, bridge-loan or other multilateral development scheme.)

Instead, Leftists complain about how the divide in America between rich and poor is growing. They don't talk about how the divide in the world is in fact closing. Ordinary people in China and India, for example, are better off now than 20 years ago. The world's poor are becoming richer, and gaining the freedom to choose of ordinary Americans. The world is more egalitarian, a supposed Leftist goal, but parochial western Leftists don't see the change.

The Soviet Union collapsed, Russians now travel the world but there are many Soviet, State-control, market-bad Leftists still around. And they just can't see/believe that in the long run, they're wrong.

Edited July 9, 2011 by August1991

[Oleg Bach]

When I buy a bit of garlic...it reads China....I pop a grape in my mouth - It reads Chile...How much jet fuel does it take to bring me that grape? Oil companies because of our trading system not only control our transportation system but no our nutrition also...Here is a story for you _ I grew up in what was then the rural area around Gormely Ontario - There were many crops including corn - They still have some corn growing there...Recently my close friend the X wife...who is also from that area - her family used to farm there....Bought some corn...The tag stated that it was a product of an American state - in tiny letter it also read - grown in Gormely Ontario....That is utterly strange if true.

Do we grow local product then export it to America who at further costs xport it back?

[Remiel]

Instead, Leftists complain about how the divide in America between rich and poor is growing. They don't talk about how the divide in the world is in fact closing. Ordinary people in China and India, for example, are better off now than 20 years ago. The world's poor are becoming richer, and gaining the freedom to choose of ordinary Americans. The world is more egalitarian, a supposed Leftist goal, but parochial western Leftists don't see the change.

This may have escaped you, but if the divide between the rich in the poor in America is growing, the divide between the rich in America and the poor everywhere else is also growing, given that the divide in America has a very large component of the rich getting richer.

[Topaz]

This past week, I went to see my favourite butcher and I see his prices for meat has gone up and when I asked why, he said the price of corn is up because of shortages and soy beans are in short supply also because of the weather and farmer's not being able to plant their crops. For those farmers that can are going to make a killing. I've been reading about the shortage of food around the world for a year now and here, in North America , we'll have the food but its going to cost big time, so the best thing people can do is start stocking up in their freezers and buy when its on sale.

[TimG]

he said the price of corn is up because of shortages and soy beans are in short supply also because of the weather and farmer's not being able to plant their crops.

Of course, one must not forget the boned headed subsidies for ethanol in the US that encourage farmers to burn most of the US corn crop instead of eating it.

[Michael Hardner]

I think the problem is that the World Bank (and Leftists in general) can take no credit for this phenomenal change in living standards among ordinary people in China, India and around the world. (The poster child of the World Bank and the Left is Haiti: ever dependent on another do-good project, bridge-loan or other multilateral development scheme.)

Once in awhile you post something that makes me snap my head back. Are you calling the World Bank leftist ? Maybe you're unaware of the harsh criticism that they have received from leftists worldwide for forcing austerity measures and privatization in exchange for aid ?

Naomi Klein -Disaster Capitalism in the World Bank

Naomi Klein - writing in the Guardian

As for China, I concur that they were lifted from poverty to prosperity, to a degree, by opening up their economy but when Communism took over the country was absolutely destitute. By the time Communism left, starvation had largely been solved. That happened under Communism.

Oxford Journal

[August1991]

In Naomi Klein's world, everyone is to the right. Can you name anyone or any institution that Naomi Klein considers to be "far left wing"?

The World Bank provides assistance and aid, and Naomi Klein still criticizes it. It's like a social worker complaining that Family Services removes children from abusive parents.

----

As to China, it was not destitute in 1949 - other than having survived Japanese occupation. Mao Tse Tung and his Great Leaps Forward/Cultural Revolutions pretty much destroyed any expertise the Chinese economy had - as well as killing an estimated 50 million people. Fortunately, Deng Tsiao Ping survived (barely) the madness of Mao and of Mao's wife. Then Deng took a very pragmatic view of economic policy.

By the late 1970s when Mao died, the vast majority of Chinese peasants lived in a similar way to the peasants of Burma and not far removed from their ancestors several thousand years ago.

In 30 years, China has accomplished phenomenal growth rates, like Singapore, Korea and Japan once achieved, but with a far vaster population.

This is a remarkable story and it puts to shame all the various left wing economic development theorists.

Edited July 11, 2011 by August1991

[GostHacked]

WIP

You got some good points on the OP. Many factors combined are making the prices higher.

Record floods in many areas including Canada, USA, China, resulting in a good deal of farmland not being able to put in their first crops, and in many cases these farms could do two crops in a season. Droughts in other parts of the world. A booming population. Unsustainable genetically modified foods with terminator seeds (meaning no seeds are viable for next years crops .. yay big agribusiness). The cost of fuel goes up and every facet of farming is impacted.

It is multifaceted. And everything is so compartmentalized to the point where no one can connect the dots properly to understand the bigger picture. Might be a good time to check out one of my faves Gerald Celente, he was trending this for at least a year before this crisis.

[Michael Hardner]

In Naomi Klein's world, everyone is to the right. Can you name anyone or any institution that Naomi Klein considers to be "far left wing"?

The World Bank provides assistance and aid, and Naomi Klein still criticizes it. It's like a social worker complaining that Family Services removes children from abusive parents.

You don't seem to be familiar with her criticisms. She criticizes the WB plundering poor economies to pay rich investors and contractors. Is it left wing to do that ? How about to force privatization on poor countries ?

This is a remarkable story and it puts to shame all the various left wing economic development theorists.

Except that there are those countries 'open for business' who didn't do as well for their people as China did - during OR after Communism.

[Pliny]

....when Communism took over the country was absolutely destitute. By the time Communism left, starvation had largely been solved. That happened under Communism.

50 million dead means nothing to you?

[Michael Hardner]

50 million dead means nothing to you?

What is this, moralizing ? Please.

[TimG]

Except that there are those countries 'open for business' who didn't do as well for their people as China did - during OR after Communism.

And is that the fault of the system or the people who live there? China has a long history of organizing itself as a mass society. It should come as no surprise that once they ditched communism they would succeed.

A market economy is not a guarantee of success but it is a prerequisite.

[Shady]

Another reason the cost of food has gone up, is because idiotic environmentalists have us making fuel out of it, instead of feeding people with it.

[WIP]

Of course the premise is complete nonsense. We have always had good years and bad due to weather variations and there is no evidence that the recent bad weather events are any worse than those experienced in the past.

The real driver behind food prices is economic growth in Asia which increases demand.

That said, even if climate had an on food production, the statistics show that human ingenuity is still increasing agricultural productivity:

http://1.bp.blogspot.com/-XJxevK4SmGo/TeuPiXHAc1I/AAAAAAAAA-0/AwUVyZ1D8WY/s1600/nyt.food1.jpg

How convenient that your source ends with 2009...the last year there were significant grain surpluses to bring commodity prices down. This looks eerily similar to the way global warming deniers play around with temperature data to try to make an argument that the planet is cooling!

The trend until two years ago, was weakening yields in the world's major food exporters, and since 2009, that trend has resumed, thanks to the effects of extreme weather. Too bad this board doesn't allow posting images, because the FAO chart at the top of my link in the OP clearly shows the food price index peaked at the end of 2008, after several years of supplies unable to meet demand, and has resumed since the bumper harvests of 2009 to the point where now the FPI is higher than it was at its peak in 2008.

Your insistance that farmers are unable to adapt to climate changes is not supported by any evidence.

No, it's your faith in free market fundamentalism that's not supported by evidence! Of course farmers are going to try to adapt to what's thrown at them -- that's the way it's always been for those living off the land. But, farmers today in the tropics are being asked to adapt to increasing droughts and floods...interesting that a new report on the situation in Kenya reveals that they have actually received more precipitation than normal! The problem is that it is coming after prolonged periods of drought, and coming down in cascades that do little more than wash away topsoil. IN other places - like India, more than 70% of underground aquifers are in decline. In a few years, India will be faced with a stark choice similar to the one Saudi Arabia is now dealing with - keep farming and run out of available water, or scale back agriculture and be forced to buy more imported food from abroad.

As for the impact on the poor: higher food prices make the poor, who often produce food, much richer.

http://rogerpielkejr.blogspot.com/2011/06/uncertainty-in-food-insecurity-what-do.html

Just as I figured, Pielke's source is International Food Policy Research Institute - a think tank created to advance the interests of agribusiness and the creators of GMO foods. IFPRI's analysis claims that FAO is using too much self-reporting data from third world nations they suspect of putting their hand out looking for aid...so what do they have to say about the developing famine right now in East Africa? This is just more rightwing crap from Pielke, similar to his ideologically constrained analysis of climate data.

[WIP]

This may have escaped you, but if the divide between the rich in the poor in America is growing, the divide between the rich in America and the poor everywhere else is also growing, given that the divide in America has a very large component of the rich getting richer.

Yes, our local aristocrat seems to think that the only people who count are the nouveau riche in China, India and Russia. All three nations are experiencing sharp rises in poverty and income inequality. Unfortunately, Chinese political and business leaders seem to be the only ones who realize that the growing gap may cause greater instability - China's Growing Income Gap

[bloodyminded]

In Naomi Klein's world, everyone is to the right. Can you name anyone or any institution that Naomi Klein considers to be "far left wing"?

No, but it's not just Klein. The "left" generally is profoundly critical and hostile to the World Bank. Far more than are centrists and right-wingers, in fact. Far more.

The World Bank provides assistance and aid, and Naomi Klein still criticizes it. It's like a social worker complaining that Family Services removes children from abusive parents.

That's an awful analogy.

But then, your view of "the Left" has always been overgeneralized, oversimplsitic, occasionally the literal opposite of the truth, and usually mostly wrong. But always bizarre, strange, apropos of nothing tangible, and entertaining!

----

This is a remarkable story and it puts to shame all the various left wing economic development theorists.

About which you know nothing, except the criticisms you have read (well...arguably) from right-wing economic development theorists.

(Just as nearly every harsh critic of Noam Chomsky has never read him at any length, but relies on his critics for understanding; I know this, for a fact, because every criticism I've ever read follows the precise same trajectory and subject matter, and the same wording, even, and is unaware of the many-existing rebuttals. I think your views are of a similar phenomenon.)

Edited July 12, 2011 by bloodyminded

[TimG]

The trend until two years ago, was weakening yields in the world's major food exporters, and since 2009, that trend has resumed, thanks to the effects of extreme weather.

Trend or oscillations? I say oscillations.

No, it's your faith in free market fundamentalism that's not supported by evidence!

We have 6000 years of human history that shows that free market fundementalism works.

But, farmers today in the tropics are being asked to adapt to increasing droughts and floods...interesting that a new report on the situation in Kenya reveals that they have actually received more precipitation than normal!

Again, all within normal climate variations.

In other places - like India, more than 70% of underground aquifers are in decline.

But this has NOTHING to do with climate. There are many places in the world which are over exploiting fossilized water resources and they are headed for a crash no matter what. The problem with you is you want to take everything bad and link it to your bugbear CO2. Sorry, I don't buy it.

This is just more rightwing crap from Pielke, similar to his ideologically constrained analysis of climate data.

Yawn. The usual nonsense from you. If you don't like the data you attack the source but offer no credible argument for why your cherry picked sources would be more accurate.

[blueblood]

Another reason the cost of food has gone up, is because idiotic environmentalists have us making fuel out of it, instead of feeding people with it.

Oh please! The usa is the worlds largest ag exporter and worlds largest oil importer/consumer. They cannot grow 2.50 per bushel corn to give away to the worlds poor and get pillaged by the middle east for their oil. The subsidies are finished and according to morgan stanley ethanol production is generally profitable without them. The subsidy did its job getting the industry started. Why should the usa have a policy that devalues one of its main exports? The usa can either pay oil sheiks in the middle east or their own farmers. Then there is the sheer volume that gets used. How many more dollars would nymex crude be if ethanol wasn't used?

The lefties were complaining about when they were giving food away which put 3rd world producers out of business, now they're complaining about them not being able to afford food, even though those producers get more for what they sell. Wow!!!

[charter.rights]

This past week, I went to see my favourite butcher and I see his prices for meat has gone up and when I asked why, he said the price of corn is up because of shortages and soy beans are in short supply also because of the weather and farmer's not being able to plant their crops. For those farmers that can are going to make a killing. I've been reading about the shortage of food around the world for a year now and here, in North America , we'll have the food but its going to cost big time, so the best thing people can do is start stocking up in their freezers and buy when its on sale.

Actually the best one can do is also to start growing your own food....

Square Foot Gardening

I have been using this method for two years now and I am able to get 3 crops out of some vegetables. It allows succession planting with little effort and once it is set up requires attention only for picking and the occasional watering (one cup per plant). On top of giving lots away, I froze, canned and dried so much food we still have items ready to eat from last year and have started putting things down this year.

As well we have been buying locally from our eggs to our beef and chicken and while the prices may not be better, we know that 1. the money goes directly to the local farmer / butcher and the product is much better than supermarket. We still go to the supermarket but hardly ever buy vegetables. BTW. because the soil is so soft and light I was able to start planting in March and harvested our first vegetables in early April.

[Shwa]

Another reason the cost of food has gone up, is because idiotic environmentalists have us making fuel out of it, instead of feeding people with it.

Nope, you're wrong. Corn, for example:

Major Crops Grown in the United States

According to the National Corn Growers Association, about eighty percent of all corn grown in the U.S. is consumed by domestic and overseas livestock, poultry, and fish production. The crop is fed as ground grain, silage, high-moisture, and high-oil corn.

So corn is used to feed people.

How about sugarcane?

The United States and Brazil are the two largest ethanol producers in the world, accounting for nearly 90 percent of global production. Brazil is the leading exporter of ethanol, using sugarcane for feedstock. In 2007, 8.4 million acres of farmland in Brazil were devoted exclusively to sugarcane production for ethanol.

This compares to some 19 million acres of sugarcane in Brazil. Less than half of one country's production.

[Oleg Bach]

Oil companies at one time controlled only transportation and perhaps heating - NOW they control our very food supply - not a good thing for oil barons to have control over our very existance - control of FOOD!