What’s next for food prices?

In 2011, Time magazine ran an article predicting continued food price spikes as a result of rising population, increasing fuel costs and the increasing scarcity of water.

ECO asked a researcher, Aubanie Raynal, to analyse the article five years on to see what has happened since – are food prices still on the way up?  And what will happen in the next five years?

Here are her findings:

………………….

In his 2011 article, Michael Schuman showed how limited food production coupled with
growing population drove to food price spikes.

In 2011, the economic crisis which began three years earlier in 2008, was at its highest point with prices multiplied by two since 2005.

Schumann’s list of pressures on food prices includes:

  • More and more people to feed
  • Changes in our diet – more meat consumption
  • Higher demand on biofuel
  • Higher pressure on agriculture
  • Acts of nature
  • Irrigation, lowering of the water table

Nevertheless after 2011 we observed a drop of the food price index  in 2015 with even bigger falls in 2016.

Were Schuman’s predictions wrong? What changes / factors have driven down the prices?

According to the FAO, the decrease is mainly due to large stock and lower demand. For
example, the production of wheat, sugar and palm oil is higher than expected,
and with the slow trade activity – meaning more product for less demand – the prices are
being driven down.

For Gail Tverberg, the principal cause is what she calls the “high-priced fuel syndrome”.
Indeed, every kilogram of food is produced thanks to fuel (see Figure 3 on the Finite World link). The stabilization of the barrel price predict by analysts, due to high productivity in the USA (2), Russia and Saudi Arabia and their interest to maintain it below $100 should maintain food price stability for a few years.

Furthermore, the fuel price impacts on factors other than the direct cost of
food production. For example, the demand in biofuel is currently decreasing, which implies less land area devoted for biofuel, thus more areas for food.

If we look closer at the relation between food and fuel price we realise that their evolution
might be symmetric but not proportional. Between 2011 and 2015, when the fuel price dropped  50% the food price only dropped off 30% (3).

The difference shows that other factors are playing an important role. Eastern Asian
countries, for example, are currently switching from a traditional diet to a more Western
one. A populous country as China now consumes more meat than the USA.
See: http://www.earth-policy.org/plan_b_updates/2012/update102

The food price evolution is a complex model where economic, human and environmental
parameters are linked to each other. We have to keep in mind that the 2010/2011 food
price spike was a warning and will strike again if we do not change the way we consume,
produce and regulate the food market.

In order to avoid the same scenario recurring, the solutions suggested by Michael Schuman (to increase the investment in R&D in agriculture, to control the food market and to improve food distribution) are more than ever necessary.

‘Enjoy your dinner tonight. While you can still afford it.’

 

References:
1 Editor of The Oil Drum , web article ‘High-Priced Fuel Syndrome’ Posted on September 26, 2012:
High-Priced Fuel Syndrome

2 Steve Austin, Managing editor of Oil-Price.net, web article ‘The top 6 reasons oil prices are heading lower’ Posted on May 7, 2015:

http://oil-price.net/en/articles/top-6-reasons-oil-price-are-headedlower.

3 Tim McMahon, , web article ‘Historical Oil Prices Chart’ Posted on April 30, 2015 :
http://inflationdata.com/Inflation/Inflation_Rate/Historical_Oil_Prices_Chart.asp
The difference shows that others factors are playing an important role. Eastern Asian
countries, for example, are currently switching from a traditional diet to a more western
one. Such a populous country as China now consumes more meat than the USA.

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Biological indicators and pest control

Wade Doak of Riverlands Landcare in Ngunguru writes that it is biological indicators which are a true indicator of the success of pest control measures:

Since success implies that pest kill tallies will gradually reduce each year, surveys of these alone, which our neighbours in Riverlands Landcare Group have done for several years, are not a good basis to estimate pest control performance. Biological indicators are a sure sign of improvement. Where three decades ago I got 31 possums in one night, Jan and I have only caught four in the past eight months, and we operate on some neighbouring land too. We are across the highway from the DoC Crawford Reserve, at Ngunguru, a reservoir of pest invaders we also have to control.

Certain occurrences have set me thinking about the unexpected benefits that emerge as old, relatively recently severed ecological connections start to get mended. (Logging of native forest in past 150 years and ensuing livestock farming). Emergent biological indicators that we may notice day by day make an interesting list.

That dense grove of large karaka seedlings Jan and I found recently along the extended Kanuka/ Bittern track, (newly territory) near a never-before-sighted blooming, pohutukawa, set us thinking. It indicates a new influence from the time our neighbours began intensified pest control, with the much-reduced possum grazing and seed eating by rats and mice. (For many years, before neighbours arrived, pest control here was mainly done by the Doaks.)

Are the whirlwinds of native bees on the kanuka blooms, a species going extinct elsewhere, surviving well here because of a pest that threatens it? Or what influence assists them, absent elsewhere?

Our widespread army of giant kauri snails have radiated from a single, hermaphroditic releasee right over to the eastern Waiotoi River boundary; south out to Reggie’s; along the newly made Buffalo Track to the west and are seen as road kill on Ngunguru Highway to the north.

Further evidence is growing density of miromiro; of two quail species; and pheasants; the dramatic increase in tui and kereru; the great numbers of fantail and grey warblers, with so many migratory cuckoo of two species. Kiwi calls are frequent now, (male and female) and there are sightings and droppings around our homes. Increasing sightings of endangered pateke /brown teal, there are now 54 on Ngunguru River, and documentation of spotless crake, banded rail, fernbirds, and Australian bittern sightings, all indicate major improvements in our marshes. Weta galore of two species, rhinoceros beetles on our house walls (both are pollinators) and geckoes in our outbuildings, peripatus in our forests, so many orchid species, the list goes on….

Then there is the abundance of seedlings that now survive rats and can be dispersed by expanding numbers of birds: karaka, pigeonwood, taraire, nikau, kahikatea, rimu, miro, totara, Pseudopanax-two species, coprosmas, (several species: five common ones), mairehau, toropapa, Pittosporum umbellatum, mahoe (two species), mingimingi of two species), hangehange, nikau and veritable swards of possum-favoured kohekohe now crowd our paths. Then, the wind-blown seeds of kauri, tanekaha, towai,  kumarahou, rangiora, hebe, tree daisy (O. furfuracea) and kanuka, are spreading vigorously, uneaten by rodents. A whole grove of fragrant mairehau bushes has been found.

Lack of plant damage is further evidence: non-nibbled foliage and uneaten fruit; even fallen black passionfruit now remain untouched; we no longer see empty macadamia nut shells, tooth drilled by rats. Our auto camera once took pictures of a possum grazing tree bark repeatedly: a blackwood. Possums once stripped a single gum tree overnight and made it impossible to raise pohutukawa: now some 200 healthy plantings head skywards, many donated by Project Crimson.

No hedgehogs have been seen for ages: a nuisance in stoat traps, predators of ground bird nests. Rabbits are expanding without predation by stoats. They become mustelid bait or promote banana growth. But we still have native hawks, kingfishers and ruru as predators.

The quality of human life in our homes, gardens and orchards has increased as our forests flourish. It’s like getting rid of fleas and body lice for home owners. It is by far the best way to enhance your land; and your neighbourhood. Our Landcare project now protects 172 hectares.

Find more of Wade’s writing

Climate Change news

As ECO prepares for its annual conference in August, themed around climate change and water, we background some recent news stories on climate change issues.

Arctic sea ice falls to new low. Data published by the US National Snow and Ice Data Centre shows that the Arctic sea ice was at historic low levels in May. Retreating ice is a problem because the exposed oceans absorb more heat rather than being reflected back into space.
Snow cover in the Northern Hemisphere was at the lowest level in 50 years this April.  Read more.

Warmest autumn in New Zealand since 1938. Niwa’s climate summary for autumn shows that the national average temperature for March, April and May this year was 1.4C above the autumn average, at 14.7C. Almost every climate station in New Zealand recorded higher than average temperatures for this time of year, which is attributed to warm seas to the west, some of the warmest seen in the last 100 to 130 years.  NIWA predicts an unusually warm winter also.

Successful trials converting CO2 to rock

A paper published in Science this month reports on successful trials in converting CO2 to rock and storing it underground in Iceland. The new method trialled works by dissolving CO2 in water to create sparkling water and then injecting it into basalt rocks 550m underground.  The CO2 cannot escape into the atmosphere because it is dissolved and cannot rise to the surface.
Such capture and storage methods may have to be part of the solution, if, as appears to be the case, we are entering runaway climate change.

Methane gas emissions at US natural gas plants under-reported – cover-up alleged

A not-for-profit in the US has alleged that a senior official in the US Environmental Protection Agency engaged in a cover-up of the true levels of methane emissions from fracking operations across the United States.
Other studies have shown much higher emissions levels but the EPA reports using the Bacharach measuring device always showed the emissions as lower – which the industry has used to justify their operations. The group NC WARN maintain that the senior EPA official has led an ongoing attempt to coverup the under-reporting by the Bacharach device. Read more.