Healthy soil and sustainable growing

["Phil Bunch" <pbunch@cox.net>]

This is very interesting. It reminds me a lot of the arguments that were
being made by the Zero Population Growth and Limits to Growth folks a few
years back. This looks a lot like the early stages of the demand over-shoot
problem. Too much population demanding more than the productive systems can
supply.

It looks to me like some areas such as Southern California are hosed. Even
if people wanted to grow their own food and had room to do so the cost of
water will become prohibitive as the climate warms and dries on a regional
scale. There is not enough carrying capacity. This is not good.

People are not good at identifying slow change even when it affects them in
important ways. Sustainability requires foresight but when the required
signals are muted by the convenience of day-to-day life the message does not
arrive in time. What happens when folks wake up and realize that they are in
trouble? Anyone living on the land had better be prepared for a lot of
refuges.

-----Original Message-----
From: livingontheland-bounces@lists.ibiblio.org
[mailto:livingontheland-bounces@lists.ibiblio.org] On Behalf Of
TradingPostPaul
Sent: Monday, December 03, 2007 9:08 PM
To: livingontheland@lists.ibiblio.org
Subject: [Livingontheland] The world's ever-increasing grocery bill


http://www.moneyweek.com/file/38738/the-worlds-ever-increasing- 
grocery-bill.html
The world's ever-increasing grocery bill

30.11.2007
The average UK family now spends £750 a year more on food than 12  
months ago; the world’s grocery bill has jumped by 21% this year;  
Russian bread prices have doubled; and three people have been killed  
in a cooking-oil stampede in China.

Food inflation is rising sharply as agricultural markets are  
straining to keep up with demand, and the “farm crunch”, as Ambrose  
Evans-Pritchard puts it in The Daily Telegraph, is far from over.

Over the past 20 years food output has risen by an annual 1.3%, while  
population growth has climbed by 1.35%. The global population is set  
to jump from 6.6 billion to 8.3 billion by 2030, while mounting  
wealth among consumers in developing countries is spurring a shift  
towards greater protein consumption. This implies higher demand for  
grains, as it takes about 7kg of animal feed, such as soya or corn,  
to produce 1kg of meat.

Note that China has now become a net importer of corn for the first  
time. The trend towards biofuels is also underpinning demand, while  
urbanisation and land degradation are crimping the supply of arable  
land.

Credit Suisse calculates that global food production will have to  
grow by an annual 3% to cover demand from population growth, changing  
diets and the burgeoning biofuels industry. But there is scant  
prospect of supply meeting demand. With China losing 0.6% of its  
agricultural land a year through urbanisation alone and acreage  
expansion potential elsewhere looking limited, arable land supplies  
seem unlikely to expand by more than 1% a year.

What’s more, the pace of productivity growth has declined to an  
average of 1.3% over the past 20 years, despite the introduction of  
genetically modified seeds. Stockpiles are meagre, with US corn  
inventories at a 35-year low and the EU’s grain mountains depleted.  
Given all this, agricultural prices are set to rise further.

Having lagged behind base metal and energy prices over the past few  
years, agricultural prices have risen strongly of late, with wheat  
futures up by almost 70% this year and soybeans hitting a 34-year  
high over $11 a bushel.

But the agricultural complex is still some way off its all-time  
peaks; cotton and corn, for instance, are about 50% below their  
records and sugar is about 85% off its 1970s high. “The supercycle  
clearly has a long way to run,” says Evans-Pritchard.

With Chinese demand surging, soybean prices look set to test the $12  
level, according to Daisuke Yamaguchi of Yukata Shoji Co. And the  
outlook for sugar has greatly improved, says Manraaj Singh in Profit  
Hunter. Falling production in India and Europe, along with lower  
exports from Brazil as more sugar is devoted to ethanol production,  
suggests the world could go from a sugar surplus of 11 million tonnes  
last season to a deficit of a million this season. Add in increasing  
sugar consumption in the developing world as incomes rise, mounting  
speculative interest and the growing demand for sugar-based ethanol,  
and sugar is worth a punt.

There is a London-listed ETF offering exposure to sugar (SUGA) as  
well as other softs, including soybeans (SOYB), while investors can  
also track a basket of grains (AGGP) and an agricultural commodities  
index (AGAP); see ETF Securities for more details. Consider also Hugh  
Hendry’s CF Eclectica Agriculture fund.



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