Last week's interview on Food Chain Radio with an international food broker was pretty enlightening. The main point this fella pointed out is missing from the list: the strength of the euro/the weak dollar: he says that it used to be everyone wanted to sell to the US, now the euro is getting the most attention from food producers and brokers, and so the rest of us have to compete with them.

He also talks about how the low price of wheat last year spurred problems, in part b/c of its coincidence with the AU drought.

Availabe mp3 here:

http://foodchainradio.com/shows/585Bcheap.mp3

Erik

The Orion Grassroots Network: 1,200+ grassroots groups working for conservation & more

Another factor to add to your list, Tom.

It hasn't gotten much publicity outside of the agriculture press, but the prices of all fertilizers have gone way up (not just N).

Another reason to learn about composting.

Some recent articles:
Fertilizers and glyphosate
Potash and sulphur
China agrees to pay triple for potash fertilizer
Role of Potash as strategic resource
Phosphorus

Bart
Energy Bulletin

Representative Jim McGovern, Democrat of Massachusetts, said he had come to realize that Congress made a mistake in backing biofuels, not anticipating the impact on food costs. He said Congress needed to reconsider its policy, though he acknowledged that would be difficult.

"If there was a secret vote, there is a pretty large number of people who would like to reassess what we are doing," he said.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

WSJ's Load up the Pantry

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.

Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.

And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.

The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.

A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.

sheez...how many posts do you have on here railing on biofuels?

i have yet to see you mention our porkbarrel politics and ag subsidies? you are doing your credibility serious harm my friend....

you mentioned that Haiti used to produce most of its own food and then went on to say the recent turn for them is because "Corrupt governments, cheered on by the IMF and World Bank, ripped open agriculture markets to low-cost foreign competition"....to clarify for those that may not realize: we are that "corrupt government" and the billions of our tax dollars that subsidize a small percentage of the ag elite in this country are the the "low-cost foreign competition"....

http://www.democracynow.org/2008/4/24/the_us_role_in_hait ...

A billion dollars a year of taxpayer money goes to rice farmers in the United States, plus we have a tariff. We have three different subsidies, three different programs that do that, plus we have a tariff that adds between three and 24 percent protection for our rice farmers. And as a result, the rich and powerful country of the United States, along with other rich and powerful countries in the world, have just really bullied these small countries into accepting our rice. And as the rice from the United States came in--they even called it "Miami rice" and some call it the invasion of Miami rice--that the rice flooded in at low or below cost--free or below cost and destroyed the ability of farmers in Haiti to be able to grow rice.

I see you are new to the blog. Welcome. I'm not sure who you are arguing with though. Not many people who frequent this blog would disagree with what you said here, except for your suggestion that Tom has hurt his credibility.

I take it you are a biofuel proponent and favor the subsidies that support it?

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

Nice to see the bias in Gristmill: it doesn't link to the FAO, which is one of the few agencies with real authority in this debate.

It says this:

UN says oil rise hits food prices harder

By Javier Blas in London

Published: April 26 2008 03:00 | Last updated: April 26 2008 03:00

Biofuels are viewed by many as the main culprit in the food crisis, but agriculture experts say that other factors, ranging from higher demand in China to a slowdown in farming productivity growth, have greater influence on prices.

The United Nations' Food and Agriculture Organisation estimates biofuels have contributed to about 10 per cent of the current price rise. It argues that the surge of oil prices - through costlier fertilizer and diesel - is having a greater impact on food prices.

Jeff Tschirley, the chairman of the Inter-Departmental Working Group on Bioenergy at FAO in Rome, said: "Biofuel has been made a culprit, but we don't see it as the major [factor] responsible for high food prices."

Other organisations, such as the International Monetary Fund and International Food Policy Research Institute, the Washington-based think-tank, have estimated biofuel's contribution to current higher food prices at 20-30 per cent.

The FAO considers that biofuels "offer opportunities and risks" as they can contribute to rural income, but can also help to drive food prices higher.

Some policymakers are worried that the narrow focus on biofuels - sometimes together with so-called speculation in agriculture derivatives markets - could lead to the overlooking of long-term problems, such as low investment in agriculture, the impact of climate change or how to feed a growing global population.

Corn and soyabean are among the crops whose prices appear potentially most sensitive to demand for biofuels.

George W. Bush, the US president, recently said: "If you look what is happening in corn, you're beginning to see the food issue and the energy issue collide."

Joseph Glauber, chief economist at the US Department of Agriculture, said there was no question that biofuels "have a strong impact on corn".

The acknowledgement of the ethanol industry's impact on corn prices could lead to lower government support to the US biofuel industry, such as cutting the current tax credit of 51 cents a gallon, but it is unlikely to trigger a full-scale U-turn.

There is already discussion among US policymakers of lowering the tax credit to 45 cents.

However, Mr Glauber cautioned about pointing to the biofuel industry as the drivers of the price of wheat, rice or vegetables, which he said was boosted by other factors.

Analysts point out, for example, that the price of lentils - a staple in India - has jumped in a year to $800 (€511, £403) a tonne from $300 a tonne even though the commodity is not used for biofuels production and neither is it competing for land with biofuel crops.

Rising demand, bad harvests because of extreme weather and export restrictions had boosted the price, said analysts.

http://www.ft.com/cms/s/0/4493ad46-1329-11dd-8d91-0000779 ...

But then, Gristmill has never had a realistic assessment of this matter.

They posted this article on April 25th
How dare they not link to an article posted April 26th!!1

Gristmill writers can transcend time can't they?
http://emmettbrown.ytmnd.com

____

Then again maybe they should be cite FAO reports on the subject?

"Over the outlook period, substantial amounts of maize in the US, wheat and rapeseed in the EU and sugar in Brazil will be used for ethanol and bio-diesel production. This is underpinning crop prices and, indirectly through higher feed costs, the prices for livestock products as well," writes the report.
http://www.foodnavigator-usa.com/news/ng.asp?id=77946-oec ...

_____

Another fun mechanism to consider.

That since the value of biofuels is tied to the functional value of it's use as a transport fuel.

Then the value/cost of farm commodities goes up proportionately to the rise in value of transportation fuel.

Due in no part to the direct cost inputs of transport fuel to the food production process itself.

Are you familiar with this study on the negative impacts to air quality that comes from ethanol use?
http://greyfalcon.net/ethanol2
http://greyfalcon.net/ethanol3
http://www.stanford.edu/group/efmh/jacobson/E85PaperEST02 ...

_

What you're probably attributing to isn't ethanol, but instead catalytic converters, a program to remove older cars off the road, and taking the amount of sulfur in diesel down from 5000ppm to 15ppm.

Great article, Tom. The rise in food prices is surely complex. Over at The Nation , John Nichols puts the blame squarely with the Washington Consensus:The current global food system, which was designed by US-based agribusiness conglomerates like Cargill, Monsanto and ADM and forced into place by the US government and its allies at the World Bank, the International Monetary Fund and the World Trade Organization, has planted the seeds of disaster by pressuring farmers here and abroad to produce cash crops for export and alternative fuels rather than grow healthy food for local consumption and regional stability

Yet Nichols downplays the food-fuel competition, thereby letting our gas-guzzling habits off the hook. Biofuels and speculation does seem to me the critical drivers that pushed the system over a tipping point.  Here's how Eva Morales puts it:And it's not possible to understand in this new millennium how there are governments, presidents, institutions that are more interested in a heap of metal than in life. They're more interested in fueling luxury cars than in feeding human beings. That's where we raise a question. First, land is to be for life and not land for scrap metal or a heap of metal.

I do think "delinking" food and oil is important. (As GreyFln indicates, food prices will continue to escalate as long as land is in competition for biofuels, which are linked in to the oil markets.) And I do think we need to fight for a new locally-based sustainable agricultural policy. But I think it's equally important to view matters through a global "ecological" framework. That is, we are reaching the limits of the natural world, in terms of population and resource use. Peak oil will soon be followed by peak natural gas and peak coal. We will need new ways of thinking, not just about the economics of food production but of all our resource use. Otherwise, we will continue to come up with inadequate "solutions" like biofuels that impact other aspects of our energy use.

10 percent, Greyfalcon

The FAO says: 10%, Greyfalcon. That is marginal. Finally we hear that you have been blogging nonsense for a long time.

The IEA adds: 50% of all new liquid fuels produced already come from biofuels, which are "vital" to secure world energy supplies, because OPEC can't put out more. Biofuels have thus had a huge deflationary effect; without biofuels, the current global economic crisis and the inflation would have been far worse.

I take the FAO and the IEA serious. You don't.

...you also took:

"Professor Dr Ir Rudy Rabbinge (needs no intro, does he? If he does: he's chair of the Science Council of the CGIAR, board member of AGRA - Alliance for a Green Revolution in Africa -, co-chair of the InterAcademy Council, etc... also probably the next FAO boss, and dean of Wageningen, the world's leading agronomic university; been Chairman of the United Nations Panel on Food Security and Agricultural Productivity, etc... how's that for an authority argument),..."

pretty seriously until you learned of his views on biofuels.

The actual FAO quote says that they "estimate" 10%, but without a link to their study (assuming they have one already), and until we get some peer reviewed studies, we won't be able to untangle how much. There will never be a definitive and precise answer. And when you are talking about a 10% increase in food in a few short years, it is anything but marginal for the poorest.

The IEA never said "...Biofuels have thus had a huge deflationary effect; without biofuels, the current global economic crisis and the inflation would have been far worse."

You are exaggerating what was actually said, but this time you also blended it in with actual quotes from the IEA.

"50% of all new liquid fuels" sounds like a lot but it translates into roughly 1% of total global supply. Biofuels are predicted to be only 2% of total supply by 2012. They are doing an awful lot of damage for only being 2% of our supply.

And, what is this cryptic reference to greyflcn?

"Finally we hear that you have been blogging nonsense for a long time."

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

As Tyler Cowen points out in this op-ed at the NYT:  http://www.nytimes.com/2008/04/27/business/worldbusiness/ ...

We are currently producting food for 12 billion people and a lot of biofuel.

Agricultural experts say the planet has a carrying capacity for the production of food for 40 billion people.

Feeding 40 billion people and the Green Revolution in Africa.

Energy experts for their part have shown that, by 2050, we can both feed the increased population and produce 1500 EJ of bioenergy (that is almost 4 times as much energy as is consumed today from all sources: coal, oil, gas, nuclear), in an explicit no deforestation scenario.

See the IEA Bioenergy Task 40, and the Copernicus Institute's model on global bioenergy potential. It is the most authoritative study to date, which is why it is being used by the FAO in its new bioenergy assessment model.

IEA Bioenergy Task 40: Quickscan of global bioenergy potentials by 2050 - the most authoritative analysis so far (but it doesn't take into account progress in biotech - so the potential can actually be higher.)

See also (from the authors of the Copernicus Institute):

Edward M.W. Smeets, André P.C. Faaij, Iris M. Lewandowski and Wim C. Turkenburg (2006) A bottom-up assessment and review of global bio-energy potentials to 2050. Progress in Energy and Combustion Science, Volume 33, Issue 1, February 2007, Pages 56-106.

So land is not the problem, carrying capacity is not the problem.

The real problem is politics, trade, distribution.

...that is water under the bridge because once a child is born, it belongs. The only solution is to continue efforts to reduce poverty, educate, and protect women's reproductive rights. Poverty reduction requires good governance. India and China are reducing poverty, each in their own ways, because of good governance.

We are currently producting food for 12 billion people and a lot of biofuel.

In theory, sure. But you would have to convince everyone to stop eating meat, dairy and eggs and eat grain directly. The exact opposite is happening. Maybe you should be lobbying for veganism. The reality is that less than 2% or our liquid fuel is biofuel and look at the havoc being wrought already. If it can be grown in way that won't destroy carbon sinks, ecosystems and increase global warming, great, but we are not doing it that way.

Agricultural experts say the planet has a carrying capacity for the production of food for 40 billion people

That's a theoretical hypothesis. That agricultural expert also said:

...current biofuel crops are not efficient energy producers and require vast surfaces of arable land that will not be available for other purposes, such as food producti

"Fuel for the rich or food for the poor?" was how Rudy Rabbinge, professor of sustainable development at Wageningen University, put this dilemma at a debate on biomass from developing countries in The Hague in March 2007. Rabbinge believes that biofuel and food are incompatible. In his opinion, only unused plant remains should be used to generate energy, provided that it meets the sustainability criteria set out by the Cramer Commission, chaired by Professor Jacqueline Cramer of the University of Utrecht, now the Dutch environment minister. In other words, biofuel production must not involve the loss of agricultural land, and it must not threaten food production, biodiversity, or the welfare of workers. Above all, it must have a positive impact on CO2 emissions, according to a life-cycle analysis.

Energy experts for their part have shown that, by 2050, we can both feed the increased population and produce 1500 EJ of bioenergy (that is almost 4 times as much energy as is consumed today from all sources: coal, oil, gas, nuclear), in an explicit no deforestation scenario.

Those papers are thought ("what if") exercises. They are only calculating theoretical potentials, all based on assumptions with unknown probabilities. Predicting the future is tough to do. The effects of things like global warming on crop production are anything but clear-cut. The word "potential" is used 15 times on that page. The second abstract uses the terms "in theory" and "theoretical" twice each.

The first abstract for example, assumes agricultural efficiency will increase enough to release 72% of existing arable land now being used for food to bioenergy instead. Sometimes scientist can display an amazing lack of common sense:

Results indicated that the application of very efficient agricultural systems combined with the geographic optimization of land use patterns could reduce the area of land needed to cover the global food demand in 2050 by as much as 72 % of the present area

Existing scenario studies indicated that such increases in productivity may be unrealistically high, although these studies generally excluded the impact of large scale bioenergy crop production.

Note they say"large-scale" bioenergy. This conflicts with your concept of small landholders growing crops for liquid biofuels for our cars. Much of the energy they speak of is coming from forests, which could be as simple as burning wood in place of coal to generate electricity, which would compete for the biomass for liquid fuels.

So land is not the problem, carrying capacity is not the problem.

If there is no land problem, why are they converting wetlands and nature preserves in Africa and Indonesia, and rainforests and savannas in South America into cropland and pasture?

The real problem is politics, trade, distribution

Yes, those are the "real" problems. They are "real," not theoretical potentials and they are not going away. All countries attempt to protect their own people with those things. They can't be eliminated because they are the result of human nature. We are locked into a combination of intragroup and intergroup cooperation and competition by our genes. India and China are competing and winning thanks to good governance.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

Just wanted to point out that rice and corn/soy are grown on totally different types of land. Everyone is so quick to blame biofuels as the #1 cause of rising rice prices - saying that people who would have planted rice  are now planting corn for fuel - but that doesn't even make sense. Likewise, corn/soy isn't taking away land from vegetables (if there was demand for veggies, or subsidies, then farmers would plant them).

Saying that overall rising food prices are causing the shortages doesn't make sense either, considering that there wouldn't be enough rice regardless due to the weather and bad govt practices in the countries that are having shortages. Whether or not the current generation of seed based biofuels is a good idea is another subject entirely.

I'm just so tired of seeing bloggers and supposed journalists pouncing on the same idea again and again without thinking or researching before writing.

This list is in serious need of reordering, as some other commenters have noted. Absent from the list is all of the grain that goes to animal feed, in the US and across the planet.

For more scientific discussion on GMOs, visit my blog: GeneticMaize.

Just wanted to point out that rice and corn/soy are grown on totally different types of land. Everyone is so quick to blame biofuels as the #1 cause of rising rice prices - saying that people who would have planted rice  are now planting corn for fuel - but that doesn't even make sense. Likewise, corn/soy isn't taking away land from vegetables (if there was demand for veggies, or subsidies, then farmers would plant them).

This is only partially true. Rice, corn and soy can all be grown on delta soils like those found in some areas of California, Louisiana and Mississippi. Corn and soy can be grown on sloped land that is impractical for rice and rice is grown locally over hardpans that would kill corn or soy. There is enough overlap that increased corn prices can crowd out some rice crops if the price was right. All three crops compete for the same fertilizer sources so increased use by one crop increases the price for all three.

Also increased prices for corn and corn fed meat will push mouths that were eating meat, corn or soybeans directly into the rice market raising prices. Corn porridge or tortillas is often the last refuge of the hungry in much of the world.

Saying that overall rising food prices are causing the shortages doesn't make sense either, considering that there wouldn't be enough rice regardless due to the weather and bad govt practices in the countries that are having shortages. Whether or not the current generation of seed based biofuels is a good idea is another subject entirely.

Overall rising food prices are partially due to the costs of inputs to the farmer. As fertilizers, pesticides and tractor fuel are all fossil fuel products the rise in oil and natural gas prices pushes up the costs of the farmer. Farmers who cannot meet these costs must attempt to produce with reduced use of these inputs, reducing yield. Switching to organic, animal powered agriculture, is impractical for most in the short term.

I'm just so tired of seeing bloggers and supposed journalists pouncing on the same idea again and again without thinking or researching before writing.

This list is in serious need of reordering, as some other commenters have noted. Absent from the list is all of the grain that goes to animal feed, in the US and across the planet.

For more scientific discussion on GMOs, visit my blog: GeneticMaize.

Biofuels are clearly a working factor in the escalation in food prices. So is increased meat consumption, weather cycles and crop failure. GMO's reduced yields aren't helping one bit either. One stick doesn't make the house.

p.s.-your blog link doesn't work :P

Put the Carbon Back

The majority of biofuelies (nice term) imagine that they get to keep running their super-Prius on 60 mile daily commutes just using biofuels and grid power to replace gas. Them and the Air Force who want to fly stealth bombers on french fry grease. It's a fantasy world and it doesn't even have very neat uniforms or conventions.

The biochar/biomethane biofuelies have demonstrated that small scale fuel production can be integrated with sustainable agriculture and agro-forestry. They are the first to tell you that the limits won't get you anything like current first world living standards but could power tractors and raise a few billion from miserable to comfortable. It will not fuel the happy motoring utopia. It will give you some cooking gas and backup hot water on cloudy days. Not insignificant when third world women die from lung cancer from cooking fires.

It's like the dark and light sides of the force.

Put the Carbon Back