World food prices remained virtually unchanged between July and August 2011 according to the FAO Food Price Index published today.
The Index averaged 231 points last month compared to 232 points in July. It was 26 percent higher than in August 2010 but seven points below its all-time high of 238 points in February 2011.
In over two decades of tracking world food prices, the U.N. Food and Agricultural organization index has never stayed so high for so long. This represents true suffering for hundreds of millions of people who live on the edge, for whom food is a large fraction of their income like, say, North Africa (see Expert consensus grows on contribution of record high food prices to Middle East unrest).
And this year’s warming-driven extreme weather is likely to help keep food prices high for a while:
Food prices could rise next year because an unseasonably hot summer likely damaged much of this year’s corn crop….
The estimated surplus is down from last month’s forecast and well below levels that are considered healthy….
“We just didn’t have a good growing year,” said Jason Ward, an analyst with Northstar Commodity in Minneapolis. “It was too hot, too warm, too dry at the wrong time.”
… More expensive corn drives food prices higher because corn is an ingredient in everything from animal feed to cereal to soft drinks.
We are unlikely to return to sustained low food prices for a variety of reasons:
- Relatively high commodity prices are here to stay (see Jeremy Grantham must-read, “Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever”)
- Peak oil in particular is coming sooner than expected and that means the future will bring higher oil prices, a major driver of food prices
- The nation and the world continue to have an untenable biofuels policy (see Food-Based Biofuels Are Helping Drive Up Food Prices and The Corn Ultimatum: How Long Can Americans Keep Burning One Sixth of the World’s Corn Supply in Our Cars?)
- There’s a growing global population that shows no sign of leveling off and may exceed 9 billion by mid-century
- There’s a growing middle class worldwide that is switching to a more meat-based diet, which requires more agricultural land per calorie.
And, on top of that, given our current inaction, climate change is just going to get worse and worse for many decades. I and others have written at length about its dire implications for food security:
- Washington Post, Lester Brown explain how extreme weather, climate change drive record food prices.
- With No End in Sight for Texas Drought, ABC News Explains: “Every Farmer in the World Will Be Affected by Climate Change”
- The Coming Food Crisis: Global food security is stretched to the breaking point, and Russia’s fires and Pakistan’s floods are making a bad situation worse; Podesta, Caldwell: “Lasting gains in agricultural productivity will require … action to confront climate change.”
- How extreme weather could create a global food crisis: 2010 was among the hottest and wettest years on record – we are entering a period of climate and food insecurity
That is the medium- and long-term future. As the FAO documents, the near-term future is not promising either:
Low inventories
Total cereal utilization in 2011/12 is forecast to increase by 1.4 percent, almost matching anticipated 2011 production. As a result, global cereal inventories by the close of seasons in 2012 are likely to remain close to their already low opening levels. Only rice stocks are expected to increase significantly, supported by record production.Wheat inventories are likely to decline to their lowest level since 2009 and world stocks of coarse grains are also forecast to plunge, with maize inventories falling to 124 million tonnes, their lowest level since 2007. Given the tight global supply and demand balance for coarse grains, its stocks-to-use ratio is forecast to fall to a historical low of 13.4 percent.
The world needs to come together very soon to develop a comprehensive food security strategy because we are headed off a cliff.
Previous in TP Climate Progress
Language Intelligence: Lessons on persuasion from Jesus, Shakespeare, Lincoln, and Lady Gaga
If Obama approves Keystone XL it will add billions of dollars a year in extra fuel costs for USA farmers…and from there to our food costs.
http://www.tarsandsaction.org/spread-the-word/key-facts-keystone-xl/
If “Reckless Rick” Perry gets his way, it the rest of the USA farmers can join Texas farmers in getting no help stopping the rise of extreme weather that is damaging their crops and livelihoods.
We can’t do anything about it if we aren’t doing anything to cause it.
Food and fiber -
The government estimates 33 percent of the U.S. cotton crop will be lost, topping the record of 27 percent in 1933.
‘Unmitigated Disaster’
“It’s an unmitigated disaster,” says Darren Hudson, director of the Cotton Economics Research Institute at Texas Tech University in Lubbock. He says production in West Texas could fall from the 10-year average of about 4.5 million bales to 1.5 million.
http://www.bloomberg.com/news/2011-09-15/record-texas-drought-burning-cotton-farmers-as-their-white-gold-withers.html
Joe are you as certain as you were about US food security?
For the foreseeable future. We can always stop exporting if it came to that.
Since the U.S. is fully penetrated by a global marketplace an “estimated surplus” of local grains means nothing. There is no global surplus of grains and there hasn’t been for at least five years. Every bit of every years production is used.
The estimated surplus is down…. means the actual famine is up.
I need to write these kinds of things down when I see them. IIRC, the world is operating on a 2 week margin of food.
As a rice farmer in California, I can say with certainty that the rise in food prices is due to “input” costs; fuel, fertilizers, pesticides and water are all very high and going higher every year. Just like medical care, the solution is in the control of costs.
Dog,
Good points, but don’t all the items you list (fuel, pesticide, etc.) come back to oil prices? If we are at peak oil, how do we “control” costs? We cannot control the scarcity of oil.
And the primary solution to climate destabilization is to increase the cost of fossil fuels via a price on carbon pollution. So it is likely the costs of food inputs will grow either way. At least for a while.
However there is a way to control the cost of oil in the medium term and that is to stop using for non-essential things. If we aggressively move transportation away from oil to renewables wherever we can, then the price of oil will stabilize or even fall.
In put costs didn’t have anything to do with the 75% drop in cotton production in West Texas. This is what caused that :
” Almost every signficiant heat related record was broken by the end of the summer at both Lubbock and Childress, and in most cases they were shattered! In fact, June and July 2011 were the two warmest months ever on record at Lubbock and July and August 2011 were the warmest two months ever recorded at Childress! The average temperature for the entire summer was 86.0 degrees at Lubbock and 90.0 degrees at Childress, almost 2.5 to 3 degrees HIGHER than the next closest year! This made the summer of 2011 the hottest on record across the Southern Plains region by a significant margin! Below are some additional statistics that illustrate how unusual this summer has been! ”
http://www.srh.noaa.gov/lub/?n=2011julyheat
Input costs didn’t cause this either :
” PLAZA, N.D. – Consumers are paying more for pasta after heavy rain and flooding prevented planting on more than 1 million acres in one of the nation’s best durum wheat-growing areas. ”
http://articles.boston.com/2011-09-03/business/30110362_1_durum-maker-of-dry-pasta-american-italian-pasta
Input costs aren’t the reason for this headline either :
Pakistan’s breadbasket reels from more floods
” The heavy rains that began falling in late August have so far affected at least 5.3 million people, made 200,000 homeless for a second time and deluged 1.7 million acres of arable land, government officials say. ”
http://www.seeddaily.com/reports/Pakistans_breadbasket_reels_from_more_floods_999.html
” Pakistan’s meteorological department says average rainfall across Sindh province is three times the normal level, with the three worst-affected districts seeing eight times the usual rainfall. “
OT: Joe, blogworthy material here and here.
Wanna make a buck off the end of the world? Food commodities seem a sure bet. There are mutual funds for this category.
Surely there will be ups and downs in food commodity prices, but as the graph says – overall it will be up.
People may call you grotesque, defeatist, a negative thinker for betting on doomsday.
But meanwhile you could get very, very rich and enjoy life, as humans inevitably destroy their sustaining planet.
Bill G, one of the defining characteristics of market capitalism is that it is a lowest common denominator system. Even if 99% of rich speculators hesitated to profiteer from starvation through rising food commodity prices, you can bet that the 1% who did would be richly rewarded, feel no pangs of conscience and imagine themselves to be ‘Rulers of the Universe’.
Food speculation can actually reduce food shortages. Speculation causes prices to rise, which can result in increased crop plantings. Also, as prices rise food waste goes down. Food costs double or triple in Europe what it costs i the U.S., and as a result there is much less waste. Less waste translates into a less serious food shortage.
I speculate on a personal level by buying lots of non-perishable grocery items when they are on sale. For example, I have about 60 pounds of boxed pasta that I bought for 50 cents per pound. I have lots of rice and various canned goods bought at deep discount. In the event of a short-term food shortage we have enough that we wouldn’t have to compete fully in the marketplace in order to eat. As a result there would be more food for everyone else.
When speculators drive food prices up, they are giving everyone fair warning that bad times are on the way. Heed their warnings and many of these bad times can be avoided. As such, speculators are to be thanked, not resented.
I fail to see how “increased plantings” can occur when prime farmland is under water and marginal farmland becomes desert!
Obviously if land is under water or too arid it can’t be planted. But there is a lot of land that is just lying fallow that can be brought into agriculture. Some is marginal, some isn’t. A friend of mine, for example, has about 50 acres that he attempted to bust into tracts as the economy went south. He commented to me that he should have rented the land out for soybeans and that he likely would if land rents stayed high next year. There’s lots of land like this.
Speculators rarely run prices up unless the underlying shortage is already there. Better to let them signal to the market that more food is needed, even if it causes pain to the poor, than to have those poor go to the store one day and find all the food is simply gone and now they will have to starve to death.
Your exposition ignores the crucial dimension of ability to pay. If speculators drive up prices (they are just as likely to drive them down if that is profitable)it might increase production, but it still makes food more expensive for the poor, these days the vast majority of humanity. Food prices doubled or tripled may be no problem in Europe, except for the burgeoning European underclass, but in the poor world they are a disaster, causing hunger and social arrest. And ‘market signals’ are irrelevant to people, and there are billions of them, who spend the vast majority of their income on food for their families.
State of the Climate
Global Hazards
August 2011
National Oceanic and Atmospheric Administration
National Climatic Data Center
http://www.ncdc.noaa.gov/sotc/hazards/2011/8
” A New Zealand MetService forecaster described the harsh weather as a “once-in-a-50-year” event for the South Pacific island nation. Of note, the Antarctic Oscillation (AAO)—also called the Southern Annular Mode—is a naturally varying large-scale climate pattern in the Southern Hemisphere in which the measured index values, dependent on atmospheric pressures at the Antarctic and at about 40°S–50°S, fluctuate daily but tend to stay positive or negative for weeks at a time. When it is in its negative phase, the oscillation brings low pressure and hence unsettled weather to New Zealand. During the week of this unusual polar blast, the AAO index values were among the most negative since NOAA’s Climate Prediction Center records began in 1979. “
” The average global land surface temperature for August 2011 was the second warmest August, behind 1998, since records began in 1880. The temperature was 0.84°C (1.51°F) above the 20th century average. This is similar to the July 2011 temperature anomaly and continues a streak of 142 consecutive months (since November 2000) that the monthly global land temperature has been above the long-term average.”
The June – August dot map for land , the blue is barely hanging on :
http://www.ncdc.noaa.gov/sotc/service/global/map-land-sfc-mntp/201106-201108.gif
“so high for so high”?
Two typhoons near Japan ……
Roke is forecast to go up Tokyo Bay -
http://www.usno.navy.mil/JTWC/
Let’s see how Tokyo deals with 5 feet of rain in 2 days. The last one rained 71 inches in Southern Japan.
In some ways, we were lucky in 2011. (!!) With a few more bad breaks, things could have been a lot worse.
If the rains hadn’t come just in time for winter wheat planting in the mid-west last year, if the Texas-Oklahoma drought had spread further north, if the Mississippi-Missouri floods had been bigger, if the Chinese hadn’t managed to break their drought before it became widespread, if the European drought had been more severe, if the flood in Pakistan had been bigger, if the Indian monsoon had been late or weak, if there’d been drought in Brazil — if any three of those things hadn’t gone our way, things would be much worse.
We’re rolling the dice in every major food-growing region, and we only need four or five bad scores to lose.
Meanwhile climate is loading the dice. The odds of having (partial) crop failures in several major food growing regions at the same time are growing every year.
Word on the street is that the channeling of much of the corn crop to bio fuel production is what is really killing the surplus. Shouldn’t we convert back to grain for food at this point?
Hank, the grain will go where the highest profits can be made and the highest subsidies gouged. Human hunger and starvation are ‘externalities’. Profit maximisation is all.
World population is a very serious problem. However, to state outright that “There’s a growing global population that shows no sign of leveling off” is pushing it. In fact, it is to deny several such “signs” both regional (China, where annual growth rate is no, not yet at 0%, but has continued a steady decline in that rate, year on year on year for some time) and global:
http://en.wikipedia.org/wiki/File:World_population_increase_history.svg
Yes, this is NOT enough. Yes, the rate needs to reach 0% (or below) to level off (or decrease) world population, but the last 20 years, 1990-2010 on that graph do show a “sign” of us moving towards leveling off; decreasing the rate of increase is, naturally, how you move to eventually leveling off. It’s like seeing a car slow down its forward motion and stating there is “no sign” of it moving towards stopping. The decrease in forward speed is such a sign. Let’s not ignore one of the positive bits of data out there: real progress _has_ been made, and that’s important to know so we can build upon it.
There is another graph showing not annual % increase, but how many millions are added each year, and even that graph, too, shows progress, especially 1990-2000 where it decreases, and staying about flat, decreasing slightly during 2000-2010 (despite higher population) which was possible only due to significantly decreasing annual % growth. (second graph, here http://www.census.gov/population/international/data/idb/images/worldpch.png )
For China the story is even more positive, see indexmundi.com/china/population.html
IMF estimates of annual percentage change 1991: 1.3%
1992: 1.16%
1993: 1.15%
1994: 1.12%
1995: 1.06%
1996: 1.05%
1997: 1.01%
then 0.92%, 0.82%, 0.76%, 0.70%, 0.65%, 0.60%, and 0.59% taking us to 2004 and the same 0.59% for 2005.
For 2006, 0.53%, for 2007, 0.52%
for 2008 and 2009 both are 0.51% growth
For 2010? 0.50% That’s IMF’s numbers. The page I printed out last spring had another source which while not as monotonic, still stated very similar 0.49% in fact, growth for China for 2011 (over 2010). No need to convince us that “This isn’t enough” But are there “signs” that China may reach 0% (or less) some day? Yes, the above numbers are signs.
World as a whole as more progress to make but graphs show the steps, not large enough but significant, the world population has made
Sorry, the latest population data shows no sign of leveling off even by mid-century.
The latest UN population data assumes that the current system continues until mid century. Is that really likely?
Sailesh, the UN does linear projections and does not include corrections for systemic, non-linear trends such as climate destabilization with its multiplier effects of physical disasters including the oceanic, food and water shortages etc.
Therefore, its projections are increasingly unlikely to be accurate, ME
Well, whether by 2050 or not depends on policy of course. I had read “there’s a growing global population that shows no sign of leveling off and may exceed 9 billion by mid-century” with the second half after the “and” as separate and not modifying the former. I read as “no signs of leveling off [and...other statement]” rather than “no signed of the leveling off happening by 2050″ The later with “by 2050″ is a different claim.
There are certainly signs (the above numbers we cited) of the world moving towards leveling off, maybe adding 45m/yr rather than 75m/yr as now or 85m/yr as circa 1990. We need to remember the progress if we are to successfully make arguments for policies which continue (and yes, strengthen) these positive developments so far, so we can build on them..
With all the above, I forgot but meant to say: excellent, very useful, critically important graph for food prices including inflation adjusted, thank you!
One thing about corn, it’s still cow feed after the process.
Corn -
This corn / industrial / complex is an inverted great Great Pyramid. What it has given us is the fattest poor people in the history of man.
Boys and girls brewery waste is not waste.
Mules love it.
Then, the rethuglicans should love it also. Same breed.
Steady on, John. I like mules. Some of my best friends are mules.
This year the Palouse is #2 wheat production region in the USA, by quantity. That’s scary.
JR -
Cotton has put rags on the backs of the poor people since the climate changed, and drove everyone off desert to Egypt, and the Nile River.
The apex of the world’s cotton crop has lost, …. at least 75% of this years crop. Period.
The framers may be insured, but every down the chain chokes. These are all “rich” Texans.
( These numbers come from cotton watchers at Texas Tech, I am in the same location too.)
We may have no fiber to cover or selves.
Want to bet ?
Bet on Cotton, because 4.5 Billions bales have come from Lubbock, Texas over the last 5 years, if we make 1 billion bales this year, I’ll be shocked.
PS …
Guess where else they grow cotton & make T-Shirts -
” Pakistan’s breadbasket reels from more floods ”
http://www.seeddaily.com/reports/Pakistans_breadbasket_reels_from_more_floods_999.html
These two facts make cotton prices more than we’ve ever seen. The “All Time High” was in March , that is where the rocket leaves earth on these prices.
My kin lost their hearing in the cotton mill at Bonham, Texas.
Next month we make 7 Billion people, they all have T-Shirts. All of them are made from cotton.
The price of “T-Shirts” is going up.
Unless they are made from hemp.
Which is illegal to grow in the USA (but legal to import).
Back in spring planting, US farmers planted near record high numbers of total acres. I’m looking for the number of acres that were taken out of production during the difficult growing season, either forced by complete crop loss or decision due to anticipated poor yield. Of the remaining acreage that was deemed adequate for harvest, the yield per acre is going to look better than if all acres initially planted are used in the calculation.
A precautionary over-planting works on the scale of a continent, but it is much more of a gamble for individual farms. That’s my synopsis of earlier reports and not fully reflected in the press link:
The Delta Farm Press has put out a convenient review of the USDA’s Crop Production and World Agricultural Supply and Demand (Sept. 12), which despite the newspaper’s limited title, includes all the major crops monitored in the CPWASD.
http://deltafarmpress.com/cotton/despite-stresses-us-cotton-crop-holds-steady
That was a general comment to the CP post and not limited to the cotton/hemp thread.
In the late 70′s I entered the T-Shirt business. in a motel room in Utah, by 1986 I was at the Civic Center at Lubbock, and I had the the rights to the Texas 150th Birthday Party.
When I was a boy at Lubbock , there where were “horny toads’, they ate red ants, they have been gone for decades here.
If you have money, and need to make It work.
Buy cotton.
I also made every ” Buddy Holly” birthday print, than year. (1986)
I bet the farm. I lost my ass.
Anecdotally, I have to say the corn harvest where I live in Indiana is down sharply and we didn’t have a full-scale drought here, just a long string of horribly hot days with spotty patches of rain.
I’m still wondering about the durum wheat situation in the Dakotas, where they couldn’t plant half their fields because of the flooding.
I’m also in Indiana corn country and yields are down. For us, it was spring flooding, high heat during pollination, and no rain.
It’s so good to find another Hoosier paying attention to what’s going on!
Yah, we had major spring floods and I was floored when NASA was looking at my little neck of the woods so early in the spring. Their predictions were right. We had massive flooding later in the season. And later in the summer, all that incredible heat.
When do conservative rural agriculture interests split from th GOP on climate change?
Probably just as soon as liberal urban dwellers begin to look at weather as something more important than a fickle component of their weekend.
Weather is something I have to pass through to get from my apartment into an awaiting taxicab. –Fran Lebowitz
When they start losing money and the subsidies aren’t enough to pick up the slack.