Running low on food?Posted: October 31, 2007
I’ve been having a creeping suspicion that food prices in the supermarket have been increasing over the past few months and other friends seem to share this opinion. We have also been warned that some food prices might double of triple in the next few months due to shortages. These hikes for vegetables and dairy they say are a product of the ongoing drought. That may be well and good but then I came across something rather more interesting when looking into food supplies. There was a press release based on data from the US Department of Agriculture noting that food supplies are at at all time low. Now considering that generally yields are up and production is up this is a tad surprising.
For many years the population explosion arguments have been hammered and the general argument is that we have enough food but simply can’t move it to where it’s needed. This argument can now be put one side as it would appear we actually don’t have food and what we do have is running out. Digging out the raw data is quite simple these days due to the internet. The site of the Foreign Agriculture Service on the US Dept. of Agriculture has the raw data. If we look at wheat and coarse grains which is much of the worlds staple grains we can make the following graph.
As you can see since 1998 there has been a general trend down. Even though yields and production ave been going up…
The National Farmers Union had a press release with the following to say:
“SASKATOON, Sask.—Today, 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 NFU Director of Research Darrin Qualman.
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.” ”
For farmers this is pretty good news because the prices are going up nicely however the longer term picture is not so rosy.The increasing yields are easing off, there is no more land to put under grain and any bad years due to global warming or just bad luck will cut into this stock level. As stated above this is a consistent downward trend. Now I’m sure the economists will argue that demand will lead to an increase in supply however this economic model, the one that the bulk of the world works under, assumes the world is figuratively flat and that production can always be increased. They live in a dream of constant economic growth without noticing we live on a ball, sooner or later we run out of land and apart from sunlight live in closed system.
Looking at the graph I’d estimate that unless something magical happens pretty soon then by about 2014 the stocks run out. For some countries who are net exporters like ourselves and the USA this means we don’t export as much. However for those countries who rely on our grain for food this will pose major issues. The prices will sky-rocket and all of us will feel this in the hip pocket for most of our basic commodities like bread,pasta,rice and cereals. Now the amount of weekly pay required for food is a fraction of what it used to be early in the 20th century however I’m not to sure people these days will be too happy with an $8 loaf of bread or $10 Weet-Bix. The increase in CPI will also drive up inflation and interest rates and then peoples mortgages go up to.
And as for what’s happening in the rest of the world when they run out of food can best be summarised by this image and the story behind it.