{"id":13023,"date":"2011-07-08T09:14:10","date_gmt":"2011-07-08T15:14:10","guid":{"rendered":"http:\/\/blog.sustainablog.org\/?p=13023"},"modified":"2011-07-08T09:14:10","modified_gmt":"2011-07-08T15:14:10","slug":"is-this-new-global-food-price-level-a-new-norm","status":"publish","type":"post","link":"https:\/\/sustainablog.org\/articles\/is-this-new-global-food-price-level-a-new-norm\/","title":{"rendered":"Are High Global Food Prices A New Norm?"},"content":{"rendered":"

 <\/p>\n

\"Wikipedia<\/a><\/p>\n

FAO (The food and agriculture organization of the United Nations) released their June estimate of global food price indices yesterday. \u00a0The new numbers were mixed, but not encouraging overall. Sugar was up 15% over the month.\u00a0All the other indices were nearly flat: Dairy up 0.2%, Oils down 0.6%, Meat down 1.5%, Cereals down 1.3%. \u00a0The net change was a miniscule +0.6%. \u00a0This is bad news for poor people who spend much of their income on food for their family.<\/p>\n

Farmers Are Trying To Reverse This Situation<\/h3>\n

Farmers have been doing all they can to boost production and get reserves back up. \u00a0The American row crop farmers have been frustrated by flooding or fields that were too wet to plant in the Midwest. \u00a0Along the Mississippi river<\/a>, farmers watched helplessly as 40-50,000 acres of prime land was flooded. \u00a0Away from the rivers, drought and heat had already hurt yield potential. \u00a0For wheat growers in France, Kansas, the US and Russia, rains were late for the winter wheat crops<\/a>. \u00a0The French crop could be 15 percent down – the lowest in four years.<\/p>\n

Double Whammy<\/h3>\n

Then to make matters worse, the rains were too early for planting the spring wheat, corn and soybean crops (34% of normal vs a typical 85%.) \u00a0In May, Reuters reported that Ker Chung Yangan investment analyst for Phillip Futures in Singapore, a “double whammy.” \u00a0By June 5, only 79% of the US spring wheat crop had been sown vs an average of 98% for the past five years. \u00a0This makes millers nervous<\/a> because so many baked products depend on the high protein, hard red spring wheat crop from North Dakota, Montana and Minnesota.<\/p>\n

\"\"<\/p>\n

A Brief Moment of Optimism in June<\/h3>\n

FAO distributed high quality wheat seed to flood-affected farmers in Pakistan – $54 million worth. \u00a0That lead to a bumper crop worth nearly $190 million – a 4x return on investment. \u00a0Wheat yields in that country are often limited by the fact that there is no viable “farm credit” system to allow farmers to buy good seed, fertilizers and chemicals. \u00a0Then, in early June, Russia announced that they would lift their export ban on wheat. That caused a round of selling of wheat – something that is regretted now.<\/p>\n

This Food Price “Spike” May Not Be a “Spike” Afterall<\/h3>\n

The previous food price spike started in April of 2007 and ended in January of 2009 (21 months). \u00a0This spike began in January of 2010 and it still going strong 16 months later. \u00a0With poor harvests this fall, we can’t expect to see prices drop until well into next year<\/p>\n

A Hard Question That Needs Much Thought and Discussion<\/span><\/p>\n

This may not be a “spike” at all. \u00a0This may be the new food price paradigm which has major ramifications for global security and international policy.\u00a0During future shortages, do we sell these limited supplies to the rich customers (Japan, Western Europe, Oil Rich Middle Easterners) or to the world’s poor (sub-Saharan Africans, oil-poor Northern Africans, Eastern Europeans, Central Americans? ). \u00a0These are very important questions that deserve a serious dialog. \u00a0You can join that discussion here.<\/p>\n

 <\/p>\n

If you would like a copy of the graph or the underlying data, email me at applied.mythology@gmail.com. \u00a0My main website is Applied Mythology.<\/a><\/p>\n

 <\/p>\n

Food price index data from the UN, Food and Agriculture Organization <\/a><\/p>\n

Aerial View of Levee Breach in Illinois from Wikipedia<\/a><\/span><\/div>\n
\"Enhanced<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

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