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October 31, 2006

Peak Grains Corporations, Globalization  Development  Environment

The world is running dangerously low on grains, writes Wayne Roberts at Energy Bulletin:

Now's the time to brace yourself for major price hikes in food, as peak grains join the lineup of lifestyle-changing events along with peak oil and peak water.

Unless this year's harvest is unexpectedly different from six out of the last seven years, the world's ever-decreasing number of farmers do not produce enough staple grains to feed the world's ever-increasing number of people. [...]

Whenever there's a shortfall in the amount of food produced in any given year, it's possible to dip into an international cupboard or "reserve" of grains (wheat, rice and corn, for example) left over from previous years of good harvests. [...]

The world's grain reserve has been dipped into for six of the last seven years, and is now at its lowest point since the early 1970s. There's enough in the cupboard to keep people alive on basic grains for 57 days. Two months of survival foods is all that separates mass starvation from drought, plagues of locusts and other pests, or wars and violence that disrupt farming, all of which are more plentiful than food.

To put the 57 days into geopolitical perspective, China's shortfall in wheat is greater than the entire wheat production of Canada, one of the world's breadbaskets. Since the World Trade Organization prohibits government intervention that keeps any items off the free trade ledger, there's no law that says that Canadians, or any other people, get first dibs on their own food production.

To put the 57 days in historical perspective, the world price for wheat went up six-fold in 1973, the last time reserves were this low. Wheat prices ricocheted through the food supply chain in many ways, from higher prices for cereal and breads eaten directly by humans, to the cost for milk and meat produced from livestock fed a grain-based diet. If such a chain reaction happens this year, wheat could fetch $21 a bushel, again about six times its current price. It might fetch even more, given that there are two other pressing demands for grains that were not as forceful during the 1970s. Those happy days pre-dated modern fads such as using grains as a feedstock for ethanol, now touted as an alternative to petroleum fuels for cars, and pre-dated factory barns that bring grains to an animal's stall, thereby eliminating farm workers who tended livestock while they grazed in fields on pasture grasses. [Emphasis added]

There's a perfect storm brewing: peak oil, peak water, peak grains, peak fish — the latter three exacerbated by global warming.

Posted by Jonathan at October 31, 2006 04:59 PM  del.icio.us digg NewsVine Reddit YahooMyWeb