Famines May Occur Without Record Crops This Year, Potash Says
Feb. 20 (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... 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.
The reasons are broad: drought in Australia...
After rains fell in May after 11 dry years in a row, Bruce Crafter borrowed from his bank to sow a wheat crop... thousands of Australian farmers... have watched... country's worst drought in a century... follow-up spring rains in September... never arrived, and the crops that promised salvation have failed......massive economic growth in China and India...
...The farming crisis is so bad that the federal government in late September announced A$1.1 billion ($1 billion) in drought aid. It included payments of A$150,000 each to the most debt-ridden of Australia's 130,000 farmers to leave their land... Its impact cut three-quarters of a percentage point off Australia's growth rate in 2006-07.
...Mark Thirlwell... says China and India's economic growth has changed the nature of food demand, because their wealthier populations are shifting away from traditional meals based on rice and local vegetables.
"In China we are seeing increases in meat and dairy products, which has direct implications for those markets," said Thirlwell. "But also it has implications for the inputs into the meat and dairy, so grains for example."
...world grain stocks are expected to fall to their lowest levels in 30 years. World export prices of wheat soared to record prices, up about 25 percent alone in September.
The result is higher prices in much of the world ...China's ...food prices up more than 18 percent from a year earlier..
...U.S. milk prices are up 18 percent since the start of the year, while eggs cost 35 percent more than they did a year ago.
...and grains being diverted from food production to ethanol/bio-fuels...
...The price of flour has doubled in the past two months as weather problems, including two years of droughts in Australia, have depleted wheat stocks to lows not seen since the 1970s.
Also contributing to the shortage is the flux of grain farmers switching to other crops, such as canola or corn, that produce biofuels.
"It's a very, very tight situation," said Canadian Wheat Board analyst Bruce Burnett. "World production has been under consumption in the last couple of years, so we have been drawing stocks down … and we've finally hit levels that have made the market very, very concerned about supplies and rightly so"...
...the looming pasta crisis is the result of Italian farmers increasingly growing durum wheat for biofuel production rather than food.
The report says the price of durum wheat is two-and-a-half-times higher than June last year as supplies have tightened, forcing some suppliers to cease pasta production...
By now you should be convinced there are problems looming. Just one more element of The Perfect Storm That Cometh, adding to its size and ferocity.
the oil drum.com
There has never been anything remotely like the food crisis that is now increasingly gripping the world, threatening millions with starvation. For it is happening at a time of bumper crops.
All the familiar signs of impending disaster are here, and in spades. Across the developing world already hungry people are now having to eat even less. Food stocks have plunged to record lows. Food prices have scaled new heights. Food riots are spreading around the globe. Yet the world is still harvesting record amounts of grain.
Grain prices should be good this year, wheat board specialist says
(From countercurrents via The Guardian)
27 February, 2008
“This is the new face of hunger,” Sheeran said. “There is food on shelves but people are priced out of the market. There is vulnerability in urban areas we have not seen before. There are food riots in countries where we have not seen them before.”
WFP officials say the extraordinary increases in the global price of basic foods were caused by a “perfect storm” of factors: a rise in demand for animal feed from increasingly prosperous populations in India and China, the use of more land and agricultural produce for biofuels, and climate change.
The impact has been felt around the world. Food riots have broken out in Morocco, Yemen, Mexico, Guinea, Mauritania, Senegal and Uzbekistan. Pakistan has reintroduced rationing for the first time in two decades. Russia has frozen the price of milk, bread, eggs and cooking oil for six months. Thailand is also planning a freeze on food staples. After protests around Indonesia, Jakarta has increased public food subsidies. India has banned the export of rice except the high-quality basmati variety.“For us, the main concern is for the poorest countries and the net food buyers,” said Frederic Mousseau, a humanitarian policy adviser at Oxfam. “For the poorest populations, 50%-80% of income goes on food purchases.
... “Everybody was asleep at the switch. We’ve eaten ourselves out of the global food surpluses we had,” said Burnett.Worldwide shortage of rice shoots prices soaring
...An estimated 3.9 million tonne increase in world wheat production will easily be absorbed by consumption as the globe enters a third year of less production than use...
Low global grain stocks, combined with weather events, will create volatile price swings...
...Minneapolis wheat prices exploded to $25 a bushel. The price was $12 last fall.
...Ethanol use of corn in the U.S. will require 10 million bushels more this year to use 87 million bushels of an estimated 277 million bushel crop.
The U.S. will have to curb corn exports if it wants to maintain year end stocks, he said.
Thursday, 21 February 2008
Wheat prices could defy a recession