The price of food
I’ve talked a couple of times in the recent weeks about the global price of food, and its links to peak oil. At the moment the world is experiencing dramatically increasing food prices after decades of falling prices. Interestingly in New Zealand the Department of Statistics latest figures confirm that peak food may be an issue in abundant and fertile Aotearoa too. Yesterday’s food price index release showed food increased 3.9 percent in price for the year to November 2007.
The most significant upward contribution came from the grocery food subgroup (up 5.5 percent). The following subgroups also recorded increases: meat, poultry and fish (up 6.9 percent), restaurant meals and ready-to-eat food (up 3.9 percent) and non-alcoholic beverages (up 4.2 percent). The only downward contribution came from the fruit and vegetables subgroup (down 3.7 percent).
Fresh milk increased by 14.9%
The latest CPI report from Statistics New Zealand also says that food prices, along with housing, were the most significant contributors to inflation in New Zealand over the three months.
In the eighteen months from Nov 2004 to May 2006 average food prices had been increasing between 0.4% and 2.1% per year. In the next eighteen months through to November this year food price increases have averaged between 2.7 and 4.5%.
While everyone is affected by the price of food, the people that are hurt the most are those with the least to spend on groceries.
Of course food is a renewable resource, unlike oil, so this need not be a major long term problem. Or at least that would be true were it not for the fact that our current food farming and production system relies on huge injections of oil in the form of fertilisers, chemicals, petrol driven machinery and international transport.
December 20th, 2007 at 9:28 am
Yes, and heres a good way to solve the problem: More regultation. Compulsery food labeling they say, that will be good for the price!
Ok heres one of the biggest reasons that food prices are going up: biofuels. All the farmers who used to make food have switched to growing the stuff that they put in fuel, such as corn. Because they are relativly more profitable it is good for the farmers however the subsequent fall in supply is increasing the cost of food. In short you can only blame yourselfs.
December 20th, 2007 at 9:47 am
Or we can blame the consumerist ideology that leads people to consume much more food and luxery products than they have any need to consume aswel as the greed of many producers, but then again, that is what creates jobs, and working 9 hours a day 6 days a week is good for us is it not?
also, 14.9 percent increase for milk? if they are teiring prices against the international price then can we not now make them pay for the damage they do without incurring much increase in cost? i mean after all, we are subsidising them currently, by them i mean those who own those four legged creatures that produce half our green house emissions.
Sapient
December 20th, 2007 at 10:43 am
“Yes, and heres a good way to solve the problem: More regultation.”
Was that ‘regulation’ or ‘regurgitation”?
The wastefulness of long supply chains has to take some of the blame - local consumption means less food chucked away as it deteriorates, or just stops looking nice, in the long journey to the supermarket.
The bio-fuels argument is certainly significant when you are talking about grains (I was stunned at how much bread has gone up in the six months since I last bought some - usually I get it free from bakeries that chuck the stuff out), but doesn’t really work for milk and meat, except indirectly.
Grain prices will push up meat prices in places where feedlots are the norm, and if we are fool enough to globalise our economy, our prices will follow as producers will flog the stuff where the prices are highest. Re-designing the economy to serve local needs seems like a way to keep things sensible.
December 20th, 2007 at 10:51 am
Yes it is the competition between food and automobile fuel that is behind some of the drivers for this. Additionally I have seen suggestions that gradual shifts in climate patterns are beginning to show up in food production? Don’t know if this should be associated with HIGW or a lesser signal on top of this.
With regards to four legged creatures that produce greenhouse gases one must be careful to distinguish between dairy cows and sheep. Yes dairy is booming at the moment but sheep farmers are hurting. The price of lamb is barely sufficient if at all to pay the cost of production. I have hear of lambs being sold a $3 a head on the East Coast of the North Island.
December 20th, 2007 at 11:42 am
Biofuels are definitely beginning to bite in terms of price pressures, particularly with the massive subsidies that ‘W’ is putting into them. However, the shear volume of oil that goes into are food supply is what I think is driving the current price spikes. Oil has tripled in price in the last few years and that cost is getting passed on through to the consumer. All transport and machinery, as well as much of the fertilizer and pesticides used are oil based. Then there is the simple fact of more mouths to feed as population pressures increase. When we get to terms with the basic mathematics of the exponential function, our growth-at-any-cost mentality will be seen for the madness that it is.
December 20th, 2007 at 11:57 am
Monbiot predicted the effects of biofuels three years ago:
Surely if there was unmet demand for food, the market would ensure that crops were used to feed people rather than vehicles? There is no basis for this assumption. The market responds to money, not need. People who own cars have more money than people at risk of starvation. In a contest between their demand for fuel and poor people’s demand for food, the car-owners win every time. Something very much like this is happening already. Though 800 million people are permanently malnourished, the global increase in crop production is being used to feed animals: the number of livestock on earth has quintupled since 1950.(9) The reason is that those who buy meat and dairy products have more purchasing power than those who buy only subsistence crops.
On a lighter note, with the cost of meat and dairy products going up and fruit and vegetables getting cheaper, we could end up eating more healthily…
December 20th, 2007 at 1:04 pm
However, the shear volume of oil that goes into are food supply is what I think is driving the current price spikes…Then there is the simple fact of more mouths to feed as population pressures increase. When we get to terms with the basic mathematics of the exponential function, our growth-at-any-cost mentality will be seen for the madness that it is.
The alternatives are not easy given that acknowledged fact, some level of reduction of oil usage means less food means less mouths fed.
December 20th, 2007 at 1:27 pm
# Nick C Says:
December 20th, 2007 at 9:28 am
> Ok heres one of the biggest reasons that food prices are going up: biofuels. All the farmers who used to make food have switched to growing the stuff that they put in fuel, such as corn. Because they are relativly more profitable it is good for the farmers however the subsequent fall in supply is increasing the cost of food. In short you can only blame yourselfs.
why? it’s not us who’s advocating biofuels.
It’s mostly down to the US government, who are pushing biofuels in an attempt to make it look like they’re doing something about rising fuel prices. In actual fact, the corn-based biofuels they’re pushing use so much energy and fertiliser to produce tham that they are not doing anything to solve the problem of fuel prices at all.
December 20th, 2007 at 3:05 pm
Talking about biofuels, Howard Kunstler had a quote from an American farmer to the effect of “after they’ve put the last 2 inches of MidWest topsoil into their gas tanks, then what? ”
There is a lot of mainstream non-controversial stuff around about the depletion of the Ogallala aquifer, and the drying out of the Colorado..the US is heading into trouble with its food supply. Another example is the drought in Australia, and the new Murray River Commission.
One of the things that struck me after reading Michael King’s history of New Zealand, is that NZ is not actually a particularly rich country in terms of agricultural capacity and resources. It is interesting to realise just how much of New Zealand’s current wealth arises from Nauru guano. That, along with basic resource extraction such as trees, mining and fishing. Those who think that NZ can weather a changing environment (natural and economic) and be able to feed itself, better look a little more closely at the basis of our agriculture.
I hope that a good chunk of this money currently sloshing around the diary industry will used to help build more sustainable future; rather than simply being spent on overseas holidays and new cars I hope we see complete fencing of waterways, anti-erosion and anti-run-off measures and new shelter belt planting. The diary industry has the avaliable money to “future-proof” their industry for years to come. This could well be the last time they have this much money.
December 20th, 2007 at 3:17 pm
There’s enough productive land and water supplies to feed at least 40 billion people on this world without touching any more forest or catching a single fish. But then rich people want to eat so much red meat (which is only 10% as efficient as food) that they make themselves sick, or drink the milk of bovine ungulates of all things.
So yea, there’s plenty of food capacity, you just make much more money by producing far less of it, especially in a world of bountiful ag-company subsidies and the dumping of excess product on poor countries to put the competition out of business.
And hey, the world bank doesn’t want drought-prone countries keeping stores of grain for the bad years, so they have to buy it on the peak markets, and that really doesn’t help.
Peak oil? Yea, today’s tech can use 10% of typical crops to provide all the fuel and fertilizer needs within a local distribution scheme. That cuts us back to 36 billion people (or 7 billion eating about 45% meat). That doesn’t even touch on what the oceans could provide if properly managed.
December 20th, 2007 at 5:50 pm
I believe these topics to be extremely serious. Yes, topics, for I see two threads, and only one about which we can do anything.
Yes, biofuels instead of grain production in the USA is already hurting world grain prices. We cannot influence the US.
Yes, food prices here are affected by world prices, but we can insure that further productive land does not become gobbled up by suburbia. I believe we could do a great deal more to influence/encourage a wider variety of food production in NZ. By the way, sheep/beef cattle in NZ are pasture fed. Dairy cows are pasture fed by many now have corn or palm kernal supplements.
NZ has never been particularly strong on grain production. In pioneering days, especially on the Canterbury plains, a lot of oats were grown, to feed the horses that were the transport. In later times, most of our baking wheat came from Australia, and yes, much of Australia is having serious water problems.
Serious stuff all round.
December 20th, 2007 at 8:19 pm
too many greenies are ‘unconscientious’ meat eaters. hambugrisation is the the greedy land use.
come on greens arent we smart enough to utilise hempseed for food and use the fibre for fuel. envirornmetally remedy especially in drougth prone areas lik canterbury plains - ameloriating dairy nitrites too. good medicine too, and not a factor in major driving impairment.
where is the advocacy, Jenette and Russel?
December 21st, 2007 at 12:51 am
Tussock,
Are you sure about the 40 billion figure? The figures I have read (sorry, I can’t remember the book I read it in … I think it was a book by Tim Flannery) mentioned a number more like one billion.
In any case, you are correct about red meat eating not being as efficient use of land as growing vegetables. However, if the world population was a lot less than it is, we could also sustainably eat a moderate amount of red meat, if we choose to.
December 21st, 2007 at 9:31 am
Kahikatea said’ “why? it’s not us who’s advocating biofuels.”
The greens are long term supporters of biofuels and that support is pushing through the biofuels bill. They have some caveats in their support but unfortunately they are supporting a biofuel mandate target that is beyond NZ’s ability to meet domestically without the conversion of specially grown crops.
December 21st, 2007 at 9:58 am
“you are correct about red meat eating not being as efficient use of land as growing vegetables.”
This isn’t really the case, unless you are talking about the ‘financially efficient’ monocultures so beloved of modern capitalism. The most efficient forms of farming in terms of calories per acre are small mixed farms, i.e. the type of farming that was practised for about 95% of human history. Traditionally, animals are fed on waste products and surpluses, hence the popularity of pigs, goats and chickens in peasant economies. In these circumstances, meat is pretty much a ‘free gift’ on top of fruit and veggie production.
December 21st, 2007 at 12:00 pm
Its only to be expected when only approximately 5% of the population is employed to produced enough food for themselves and the other 95% in the Western world due to the consolidation of land ownership as a result of deflationary pressures in the 1920s particularly affecting farmers due to overproduction and inability to meet their debt obligations.
http://books.google.com/books?id=JQt60iJ9NbcC&pg=RA2-PA10&lpg=RA2-PA10 &dq=land+ownership+consolidation+1920s&source=web&ots=7zdJF9icnR&sig=g tTQ7bOhWIg1wZ-08U4193lUssk
http://americas.irc-online.org/am/3641
The Third World is rapidly following that trend, because of the world’s elites unquestioning devotion to following the precepts of “free” trade ideologues, which was first developed to legitamise and justify the expropriation of the land and resources of foreign peoples and the commen people in the Western world during the Colonial/Edwardian/Victorian era under the rubric of private property “rights”..
http://www.forestcouncil.org/tims_picks/view.php?id=772
December 21st, 2007 at 1:43 pm
Insider - I beg to differ. The Green’s support of the Biofuel Sales Obligation, (BSO), up to the 3.4% in 2012, can be met using only waste products already available within New Zealand. Admitedly, consumption may continue to grow so that percentage, while remaining the same, will represent a larger amount of biofuel.
Solid Energy, the Greens best friend, (not), are committed to growing only natural (non GMO) rapeseed in New Zealand, which is a rotational crop that does not interfere with food grains, but actually enhances the soil during the rotation so that less fertilisers are required for the grain crops. It is also a low water crop so does not make extra demands on irrigation or water supplies. The waste from the biofuel crop is used for animal feed cakes, rather than importing cakes made from the palm oil plantations that are cutting down all our neighbour’s rainforests.
So after the waste is used, there’s a bit of rapeseed, and we’re still a bit better off. There are logical limits, which the Greens recognise and have asked for, but within the goals of the BSO Bill, it’s win-win for the environment and the economy. Wouldn’t it be great if the rest of the country could look at things within their natural limits and not be so obsessed with growth at any cost. (That may be a fight we have with Solid Energy in about 20 years, about wanting unsustainable amounts of rapeseed!)
December 22nd, 2007 at 5:05 am
Two men were out fishing, when they found a lamp floating in the water. One of the men picked it up and rubbed it, causing a genie to explode from the lamp. Unfortunately, it was a very low-level genie and could only grant one wish. The men thought for a few minutes and then wished for the entire lake to be made of the best beer in the world.
With a poof! the wish was granted. All of a sudden, one of the men got really angry.
“Dammit! Now we have to piss in the boat!”
December 24th, 2007 at 12:52 am
samiuela, hey there.
1 billion might be accurate if we wanted to eat like people do in the USA, with food processed to rip the nutrition out, resultant overeating, too much meat, and large amounts of pointless stuff like milk, coffee, alcohol, and chocolate. Their diet makes ours look like the garden of eden.
Call it 15 billion if you want to eat cushy food with large excess margins. 40 billion is more for what is possible, rather than nice.
Sam Buchanan, hey.
The issue with such traditional designs is that they aren’t ideal any more, not compared to a modern mixed and rotated layout with controlled composting of excess biomass. We can be more productive with that “waste” than 95% of human history ever imagined, at the very least turning some of it into tractor fuel. We also have tractors, which are handy.
Besides, people in properly dense cities can’t keep pigs and chickens, and dense regional cities are a good energy saver overall. Hopefully algal processing of city bio-waste will work out in the near future as another energy recovery method.
Much more difficult than food at higher population levels is energy and potable water. But again, that’s largely down to eliminating waste and improving efficiencies to solve the problem, you can shift ten workers on scooters for every one in an SUV, or 100 in a light electric train; and people don’t really need to refill their swimming pool with drinkable water every night. The waste levels in the modern world are huge: look at me awake in the middle of the night for instance, total waste of energy. 8]
December 24th, 2007 at 1:43 pm
Don’t rant against meat eating too much if you live in NZ.
A lot of Aotearoa can grow meat with very little environmental damage.
It is quite hard to grow European style crops in NZ’s climate and soils without loosing soil and requiring irrigation.
Maybe a reduction in food surpluses will reduce the amount of nutritional colonialism.
December 26th, 2007 at 8:34 pm
Does the BSO cover only liquid transport fuels, or do gaseous transport fuels such as methane = Natural Gas = CNG also count? Given that there are a number of vehicles already converted to run on CNG, it makes sense to me to allow CNG to be included in the BSO.
Trevor.
January 6th, 2008 at 4:29 pm
Meat is too cheap!!. The reason is that there is a hidden (or not so hidden) subsidy by the environment and the animals. Chicken used to be a luxury food, even in the 70s when I was growing up. But now, broiler chickens have been selectively bred to be mature in 6 weeks instead of 12, they are as cheap as chips, but it is the birds that pay the price, with about 40% of them in New Zealand being in constant pain because their legs cannot support their clinically obese bodies, so they become lame as a result. Their hearts also pack in because they cannot stand the strain of pumping their huge bodies, and they suffer from burning and blisters through ammonia in their litter.
The same is happening with pig and egg production. And they call it progress!