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World Food Prices At All-time High

The World Food Price Index was relatively stable during the 1990’s, but shot up dramatically during 2007-8 and again in 20010-11, reaching an all time high 0f 238 in February of 2011 and it has remained near this height since then.

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).
  • 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 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:

Given our current inaction, climate change is just going to get worse and worse for many decades. Marc Jensen and others have written at length about its dire implications for food security:

  • Washington Post’s, 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.”
  • The Guardian reports” 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.

As Marc Jensen summarizes: “The world needs to come together very soon to develop a comprehensive food security strategy because we are headed off a cliff.”

Global climate warming + general extreme weather = food insecurity for the most vulnerable.

Note: I received this information from friend Marc Jensen of West Valley Greenleaf and thought I would condense it somewhat and pass it on here because it highlights a little acknowledged effect of global warming, the relationship with corn production, world poverty and social unrest.

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