Healthy soil and sustainable growing

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Will we see food riots this year? Increasing prices, higher oil costs,=
 decreasing supplies, growing populations =96 a perfect storm.
GoodFood World Staff, January 7th, 2011
http://www.goodfoodworld.com/2011/01/will-we-see-food-riots-this-year-increa=
sing-prices-higher-oil-costs-decreasing-supplies-growing-populations-%E2%80%=
93-a-perfect-storm/
(Updated January 16, see additional information by Bob Meyer below)

In the spring of 2008, huge jumps in food prices =96 up nearly double in=
 the previous two years =96 triggered food riots around the world. Are we=
 likely to see the same thing happen this year?

The price of commodities =96 of which wheat is one =96 has become extremely=
 volatile as a result of changing supply and demand. Weather conditions,=
 reflective of changing climate, have caused a variety of disasters that=
 make commodity prices fluctuate wildly.

The UN Food and Agriculture Organization (FAO) food price index shows that=
 the global price of cereals (rice, wheat, corn) have gone up more than 40%=
 in the year from December 2009 to December 2010. The index is now exactly=
 the same as it was in 2008.(1)

What=92s driving the costs up? A combination of supply and demand affects=
 the price of food.

=93Climate weirdness=94 is just one part of the equation. Last summer=
 drought and fires in Russia drove wheat prices up; too much rain in Canada=
 reduced the wheat harvest by more than a third; floods in Pakistan=
 destroyed crops.

Ongoing droughts in Argentina and now heavy rains in Australia, a country=
 that had suffered a decade-long drought, are continuing to limit=
 production. Australia is the world=92s fourth largest exporter of wheat=
 and an area the size of France and Germany combined has been hit by=
 flooding.(2)

Two more key inputs will affect the cost of food: oil and fertilizer.

The price of oil has been steadily inching toward $90 a barrel and the=
 one-year forecast is for oil to reach $102/barrel.(3) We have not yet seen=
 the peak prices of nearly $150 barrel that oil reached in July 2008, but=
 the price has been steadily increasing.

Oil prices present a double whammy to the production of grain;=
 transportation costs go up and at the same time, more of the corn=
 production is diverted into highly subsidized biofuel.

Even for those who want to grow grain for food will be paying twice as much=
 for fertilizer as they did last season. And China has doubled duties on=
 fertilizer to discourage exports. China is also one of the main suppliers=
 of food products to India, Pakistan, Australia and Latin America so=
 increased productions costs will be passed on to consumers in those=
 countries.

On the demand side, a growing middle class in China and India means that=
 more people can afford to improve their diets. The increasing demand for=
 meat requires more grain to feed the livestock.

Billions of people are buying more and more food; they=92ve moved off the=
 land and stopped growing their own food and have the money to buy it. Even=
 with rising incomes, nearly one fifth of India=92s population is still=
 undernourished.

Americans lose track of the fact that the world=92s wheat stocks can affect=
 them directly too. For example, ADM (Archer Daniels Midland) reported a=
 global shortfall of corn and high quality wheat =96 the kind suitable for=
 bread manufacturing.(4)

Will all of these elements bring food riots in 2011? We don=92t know; but=
 the combination is very likely to bring much higher prices in the=
 supermarket. The USDA predicts that retail food prices will increase 2-3%=
 in 2011.(5)

Think local, act local

Industrial food systems are global in nature and subject to global=
 interruptions =96 climatic, economic, and political.  That makes local=
 diversity and local food systems even more important.

Through constructive planning and the best use of our resources to maintain=
 agricultural resiliency, we will be less affected by the market swings now=
 developing around the world.
-----------------------

(1) FAO Food Price Index: 
http://www.fao.org/worldfoodsituation/FoodPricesIndex/en/
(2) Wheat Price Volatility: 
http://www.foodnavigator.com/Financial-Industry/Wheat-price-volatility-reflects-concerns-over-Australian-floods
(3) Oil Prices: http://oil-price.net/dashboard.php?lang=en
(4) ADM Milling: http://www.admmilling.co.uk/wheat/
(5) USDA Food Price Outlook: 
http://www.ers.usda.gov/briefing/cpifoodandexpenditures/consumerpriceindex.htm

Other articles on this topic:

    * New York Times: UN Notes Sharp Rise in World Food Prices
    * American Public Media: Flooding in Australia affects global commodity 
prices
    * New York Times: Global Food Prices in 2011 Face Perilous Rise
    * UK Guardian: Soaring cost of oil felt at the checkout
    * American Public Media: Fertilizer costs add to food price hikes
    * American Public Media: Wheat prices leap up
    * New York Times: A Drought in Australia, a Global Shortage of Rice
    * Time: The World’s Growing Food-Price Crisis