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Famines May Occur Without Record Crops This Year, Potash Says
Christopher Donville, Bloomberg
Grain farmers will need to harvest record crops every year to meet increasing global food demand and avoid famine, Potash Corp. of Saskatchewan Inc. Chief Executive Officer William Doyle said.
People and livestock are consuming more grain than ever, draining world inventories and increasing the likelihood of shortages, Doyle said yesterday in an interview on Bloomberg Television. Global grain stockpiles fell to about 53 days of supply last year, the lowest level since record-keeping began in 1960, according to the U.S. Department of Agriculture.
“If you had any major upset where you didn’t have a crop in a major growing agricultural region this year, I believe you’d see famine,” Doyle, 57, said in New York.
Potash, the world’s largest maker of crop nutrients, has more than doubled in market value in the past year as record crop prices allowed farmers to spend more on fertilizer to boost yields
…“The agriculture fertilizer sector offers tremendous fundamentals that will prove unique in an otherwise challenging and eroding macroeconomic environment,” Robert Koort, a New York-based analyst at Goldman Sachs Group Inc., said in a Feb. 13 report.
(20 February 2008)
Comment from Tom Philpott at Gristmill: With wheat stocks at all-time lows, a fertilizer magnate utters the F-word
Contributor Greg Jeffers, author of AmericanEnergyCrisis.blogspot.com writes:
This is one of the important first admissions of “Peak Food” by the food and agriculture industries, and it is coming from the most important firm in the group. Potash is THE leading supplier of crop nutrients in the world. If their products were to vanish from the world and the production shortfall not made up by the rest of the fertilizer people it would very likely mean the end of the “Green Revolution”.
The report is all the more startling when you consider that Bloomberg news is the most prominent news source for Wall Street. Clearly, CEO William Doyle cannot be categorized as some “wacky environmentalist” or member of the “luney left”. It will, by necessity, be the business media that will get this message across to international policy makers. Kudos Bloomberg News for having the temerity to publish this article and quoting Doyle.
Wheat prices could defy a recession
James Saft, Reuters
he global market for cereals looks well placed to withstand a U.S. recession, its resistance bolstered by climate change and new dietary tastes in rapidly developing economies.
The price of wheat traded in Chicago has risen 13 percent this year and more than doubled since June, now standing at just less than $10.50 per bushel.
Declining water tables and unpredictable weather in major production areas have hit crops, and much arable land has been diverted to producing biofuels. Meanwhile, consumers in emerging markets like China are eating more meat as they become wealthier, driving demand for animal feed.
(21 February 2008)
Worldwide shortage of rice shoots prices soaring
Asia News Network
As the price of rice climbs across South Asia, farmers and millers in Thailand are sitting on stocks and waiting for it to rise even further, said a top rice exporter in Bangkok.
The exporter, who requested anonymity, told The Straits Times: ‘In my 25 years of trading, I have never seen such a bad position.’ There is a rice shortage in Bangladesh and China too, among other countries, while there is a wheat shortage in Afghanistan.
In local markets in Pakistan, the price of rice has gone up over the past month by more than 60 per cent year on year.
(21 February 2008)
Just how expensive is our wheat in reality?
Jim Webster, Farmers Guardian (UK)
People have commented to me that wheat is getting a bit expensive, and I suppose that, in a way, it is.
Yet it is amazing what you discover when you start poking about.
Looking back to Periclean Athens, if your estate could produce more than 200 medimnoi of wheat you were a full citizen and were expected to serve as a Hoplite with your own equipment.
If your estate could produce over 300 medimnoi of wheat then you were gentry indeed and were expected to keep a horse and turn up on that to fight! Obviously we are talking big money here; after all 200 medimnoi of wheat was worth 600 drachma.
For a chance at that sort of land young Greek men with no land of their own sailed to Egypt to serve in the army of the Ptolemies (Cleopatra and her family) because they would be given on retirement enough land to put them into the 200 medimnoi category.
The thing that makes this interesting is that 200 medimnoi is eight metric tonnes of wheat! Even at its most expensive recently, you’d still get change from £1,700.
…The big change though is in wages. At this period the wages for the average family, small farmers or village craftsmen, if paid in wheat, would have been 727kg a year. That would have fed them and their families and they could have traded a bit to buy some beans, lentils and perhaps the occasional goat while the wife made the family’s clothes from wool she bought and spun herself.
You might wonder why I labour the point. To put it simply, the last couple of centuries, probably since the opening up of the Americas, have seen the price of food fall to unprecedented levels.
Compared to our ancestors either we are unbelievably, fabulously rich, or the price of food is so incredibly cheap as to be incomprehensible to anyone born before 1500 AD.
… So, we have built a civilisation on food being almost obscenely cheap.
For most of human history food was expensive and you literally ‘ate bread by the sweat of your brow’. Yet for the last 200 or so years we have turned everything upside down. Imagine it, wheat at £60 a tonne, so cheap I know people who rigged up systems to burn it as solid fuel in their central heating boilers.
So where are we now? Just reading around can be worrying. Oil is now being predicted to reach $105 a barrel by the end of this year.
Because we are using all the oil we can produce now – and may indeed have hit ‘peak oil’ – when people use biodiesel they aren’t substituting for oil, they are adding to the total available.
… It probably took 150 years for our civilisation to swing from a man’s annual wage being the yield of one acre, to that same acre paying him for a week. I wonder how long it will take to swing back?
Jim Webster farms beef and sheep on 150 acres at Barrow-in-Furness and is a past president of Cumbria CLA.
(22 February 2008)
