Food prices are going up. Riots in China, India, Bangladesh, Tunisia and Algeria are about the cost of food. Some countries are talking about price controls and subsidies to keep prices down.
According to a just released report from the Department of Agriculture, grain supplies will be tight.
The USDA again revised downward its estimate for the size of last fall’s corn and soybean harvest in the U.S. It made a surprise cut to its estimates for the size of the soybean crop, to 3.33 billion bushels from 3.38 billion. End-of-season inventories of corn, already expected to be at a 15-year low, were cut by more than 10% to 745 million bushels.
The USDA’s crop report for the month of January is one of the most hotly anticipated of the year. The fact that the agency took its scythe to previous forecasts is yet more confirmation that world supplies are approaching precariously low levels.
The devastating drought and wildfires in Russia in the summer of 2010 were a shock from which grain markets haven’t recovered. Crops are hurting from a drought in Argentina, dryness in the U.S. Plains and torrential rains in Australia. …
Corn and soybean futures surged the most they’re allowed to per exchange limits, hitting fresh two-year highs. Corn for March delivery, the most-active contract, recently traded up 27¼ cents, or 4.5% higher, while soybean futures for January delivery, traded up 66¼ cents, or 4.9% higher. Corn and soybeans hit a trading limit of 30 cents and 70 cents, respectively, earlier in the day on the Chicago Board of Trade.
In its first estimate of how much winter wheat was sown this fall, the USDA said 41 million acres were planted. This was in line with expectations, but still remains below 2008 levels. Wheat prices jumped almost 4%.
Many poor countries have price controls on basic commodity foods such as corn meal, rice, and wheat. Some governments subsidize the basics to keep prices artificially low.
There are several factors affecting food prices. One is that the world is connected by global trade in food. There is a constant trade activity going on at all times everywhere in the world. Chinese families may eat US rice. Russian wheat may go to Europe. Argentina’s soybeans go everywhere. The world now works on a kind of “just-in-time” food supply system which makes the pipeline subject to supply and demand issues. Many countries stockpile grain, but, in a world of 6+ billion people, that’s not sufficient to prevent price increases when supplies are diminished by flood or drought.
It doesn’t mean that there are food shortages, although there is much talk about that, but it does cause price increases. Politicians in poor countries have bought votes with cheap food, but like Lear, they can’t stop the global tide. They suffer more shocks because their economies are built around inefficient food production systems as a result of their governments’ interference with food price and production systems.
Other countries such as in the US have political policies that actually deter the production of food. We know what food subsidies have done to our agriculture as farmers figure out ways to make money by not producing food: they make easy money on subsidies. Further, it was widely reported in 2008 that government incentives to produce ethanol from corn caused corn shortages and higher prices of feed, affecting the global food supply. That hasn’t changed, despite the problems it has caused. The FDA just increased its estimates of ethanol production from corn.
There are the usual misinformed articles that rising food prices will cause inflation. They confuse inflation with rising prices from supply and demand issues. To set the issue straight, if all food prices go up, folks have to spend more for food, thus leaving them with less money to spend on other things and prices on those other things decline. Thus, unlike price inflation, not all prices go up. Inflation is only caused by printing more money.
If there is a problem with supplying food in a tight market, what is the best way to increase supply? This is Econ 101 stuff: let prices increase and let supply increase to meet demand. Few politicians understand how the pricing mechanism works. If you cap prices or have regulations that decrease supply, then you will either have less food or higher food prices. On the other hand, if you let the market work, then rising prices will incentivize farmers to plant more food and increased supply will meet demand and prices will fall. Mess with the market, and you can have starvation or riots or both.
In other words, there are only political reasons for starvation or long-term high food prices. But politicians are too weak to resist the short-term fix. Ergo price controls, food export controls, food production nationalization, and rationing. Eventually these controls fail and head roll.
Reality check: the time is way past due to eliminate the farm subsidies in the U.S.A. Also, it’s plain insane to use food commodities to make into fuel for automobiles, whole the rest of the world suffers. The shortages that are & will continue, due to climate change, require the thinking to get out of the 20th Century & into the 21st before those food riots become a reality. Priorities have to change, the U.S. has to realize that they are part of the total world population, that being blessed with the ability to produce food shouldn’t be wasted on dumb ideas. The science is available, but the will is lacking because of the short sightedness of making a buck, considered more important, even at the expense of the next generation.
Expect agricultural production to drop over the next decade. As the 210 year Grand Minimum weather cycle accelerates. Expect a month more of winter which will reduce crop yields in the upper northern hemisphere (Canada and northern Europe). The use of corn for ethanol is excuse for starvation for the poor parts of the world.
Heh. Two posts about “climate change” and one of them is predicting disaster by cooling temps!
Jeff’s economic argument is simple and correct. Impose price caps and you simultaneously encourage consumers and discourage producers. The net result is massive shortages, presumably not what price cap proponents want. Remove price caps and the cure for higher prices is: higher prices. At higher prices, there is less consumption and more production. And global arbitrage brings food in to a local area which may have had bad weather or insects or whatever.
Like the fallacy of the broken window, the fallacy of government price protections and other regulations persists because dammit people think it *ought* to be right, facts and logic be damned.
The climate “science” is a whole ‘nother story. Here we have a non-linear, dynamic system with thousands of variables (if not trillions), no way to perform a controlled experiment, oh and by the way virtually all of the variables are out of our control. Just like the preposterous notion that central planners can “fine tune” an economy–by moving a single slider back and forth to control interest rates–it is equally preposterous to think that one gas, and the incremental changes we make to the supply side of this gas’ cycle, controls the climate.
To put this in perspective, the world is around 200,000,000 square miles most of it water. It’s climate has been changing–radically–for billions of years and we know that earth has ranged from “planet iceball” to subtropical conditions warmer than the current climate.
Man has an array of perhaps tens of thousands of point sensors, most of which have not been in place for even 100 years due to lack of wealth in most countries, wars, etc. And even the ones that have been in place for 100+ years have seen their surroundings go from mainly rural to dense concrete and asphalt urban (which biases temperature readings).
The hubris to think that this sparse, biased data collected over a short period of time tells us that (1) there is a long-term trend, (2) it’s our fault, and (3) we can fix it by burning less fuel.
Oh, and by the way, CO2 does not function analogously to a a greenhouse. A greenhouse has transparent walls that block convection but allow radiation of heat. CO2 functions by allowing the frequencies of sunlight to come in and hit the earth, but when the earth warms and radiates some heat back, CO2 blocks a specific frequency of this radiation. Just like putting succeeding layers of red cellophane on your window, you reach a saturation point where the window cannot get any more red (i.e. the non-red frequencies are 100% attenuated). The same saturation effect occurs with CO2 in the atmosphere. So its marginal contribution to temperature declines.
But hey, trust us, and sacrifice 50% of your economy. Because trust us, you don’t want to live in the kind of world that would exist if you don’t!
Brilliant comment, Bearster.
Do you believe 1) there is no global warming? and 2) if so, is any of it caused by human activity?
From sources I respect since I am not a scientist, say there is global warming and that some part of it may be caused by human activity. In other words some of the science is good. I’m not sure if we need to alter our behavior as most environmentalists recommend. Basically I distrust the Movement as bring a refuge for leftists and anti-capitalists. In other words despite the bad reputation of the Movement you can’t ignore good science if you can recognize such.
I think that there is no evidence one way or the other:
1) measuring properties of a 4-billion year old system for a 100-odd years is not long enough to capture any of the longer-duration cycles
2) measuring a planet with 200M square miles of surface area at few tens of thousands of points captures the real climate as well as taking a picture of 10,000 cells of your body and trying to figure out how your diet is changing from when you were an infant through today
3) most of the sensors have either unreliable histories due to wars and other mass-dislocation events, or creeping urbanization (for example: http://gallery.surfacestations.org/main.php?g2_itemId=831)
4) Even the most ardent proponents of 100-meter walls of seawater destroying cities and catastrophes resulting from man-made warming have to acknowledge that CO2 isn’t capable of that much warming by itself. They always have to suppose that there is a positive feedback that amplifies some small amount of warming due to CO2 to a much larger warming effect due to runaway positive feedback. But this is absurd because the climate hasn’t run away yet in 4B years, and it would have done so if it had any positive feedback loops built in.
5) The marginal warming effect of CO2 declines, as CO2 reaches the saturation point where it absorbs all radiation in its wavelength band
6) the people who are promoting global warming hysteria are not honest, openly discuss among themselves the pragmatic cost-benefit analysis of how honest to be vs. how effective. Recent leaks of their correspondence not only paint them as dishonest fools, but call into question even what they have published as “data”.
My opinion is that there is no evidence to say the earth is warming at all, and certainly no evidence to say that man’s activities are the cause. This is not to say that one can disprove global warming. But the burden of proof lies on those who make an assertion–especially if they demand the coercive power of the State be handed over to them so they can force everyone to radically change their lives for their own good!
Temperate stations that were formerly in rural areas which are now surrounded by urban heat islands are biased and deceptive.
I am no expert here, but Reason has done some work and they see global warming as a trend but human activity, if at all, has contributed very little to warming. Also, I follow Skeptic and they have reported that there is good science behind some of these claims that human activity has contributed to warming. I know it is an important issue and I distrust the movement, but, OTH … I don’t think because someone asserts global warming that they should all be lumped into one box. So I will stick with my natural skepticism of any movement co-opted by the Left.
The exception might be those on fixed incomes that are barely getting by. Food price increases will disproportionately hurt them. With this economy being what it is, there will be more people in that same boat.
It’s long… but interesting for those who haven’t seen it on global warming.
http://video.google.com/videoplay?docid=-5576670191369613647#
The ozone layer on the North Pole is as such that the Icebergs are melting at an unprecedented rate. It makes it cold down here. But, as Beaster said, we cannot predict the weather. We just don’t know how. Water and air pollution is never good though is it?
I agree with Jeff about USDA interference. That never made sense to me. It was explained to me ever since I was a child that the Farmers did not need to grow certain crops because there was too much? What?
Sorry Leslie, I am going to hold you up as an example of Boobus Americanus.
Environmentalism is a religion. Just like people who fearfully and guiltily say their prayers every night, for fear that the cosmic smurf is going to burn them in anger, people today mouth the mantras of environmentalism. Without concern for even getting the narrative correct, much less the alleged science to back it.
For the record, the so-called “ozone hole” (which exists as far back into ancient history as we have had the satellites to see it (i.e. 1979) is over antarctica. It is allegedly caused by chloro-flouro-carbons which were used as refrigerants, and mostly in the northern hemisphere. This is important because air doesn’t really cross the equator much, and so it is bizarre that chemicals used in the northern hemisphere caused a problem over antarctica. Oh, yeah, ozone is unstable and breaks down naturally. It is formed naturally in the atmosphere by sunlight and lightning, both of which are lacking for 6 months over antarctica.
The ozone hole allows more ultraviolet light through than in other places which don’t have such a hole. It has never been seriously claimed that the ozone hole has anything to do with climate or temperate (that I am aware of).
[...] This post was mentioned on Twitter by Dietmar Goll and Niecie Draper. Niecie Draper said: Food Prices, Riots, And Starvation: Food prices are going up. Riots in China, India, Bangladesh, Tunisia and Alg… http://bit.ly/dSegWr [...]
The ozone layer, a natural protection of our atmosphere was 21 inches in 1970. It was 16 inches in 2000. It was predicted to shrink. This is a fact. Not a religion. The icebergs are melting in Alaska and tha is also a fact. Our Industrialism has been going on for approximately 200 years. Not very long. Lots of things have died. We have no way to measure by ratio how much environmentally is being created and destroyed aeons ago. The bottom line is you can’t predict what we have done to our environment in the last 200 years any more than you can to what we have done to our dollar. You said so about the dollar in the Moody’s blog.
I have no idea where you get most of your environmental material Bearster, and I don’t want to know. Did it ever occur to you that all the chemical changes that man has wrought just might affect our environment negatively so it becomes unfit for life as we know it say, in the next 500 years. I personally don’t think it will take that long, but that’s a drop in the bucket time wise when it took approximately 4 billion years to get where we are now. Science is not a religion. Biochemistry is not a religion. Why do you think people being concerned for the environment is stupid. Because that seems to me your inference.
That it is a religion is the only plausible explanation why an otherwise literate adult such as you cited the ozone hole as the cause of global warming.
It is day right now. I am mildly irritated right now that you tried to avoid my point. Therefore let’s try to concoct a theory of daylight irritationism, whereby sunlight increases “global annoyanism”…
Whatever word you might use for this approach, “science” is definitely not the right one.
Nor, for that matter, your arbitrary assertion that man’s use of “chemicals” “just might” affect our “environment” “negatively” so it becomes “unfit for life” in .
This is not science. It is verbalizing fears that are themselves caused by faith in a religion. Intellectually, it’s little better than the 8 year old who says “mommy there is a monster under my bed!” Politically, it’s a trillion times worse because adults believe in it, and they intend to use force to take away my rights in the name of “saving the planet” from their inchoate fears.
By the way, one can calculate how much value the dollar has lost. Prior to the Fed, a dollar was 1/20 an ounce of gold, or $20 an ounce. Today it is $1361 an ounce, or a loss of just over 67/68 or 98.5%.
It seems the rent-seekers have diluted the science of the whole discussion. Many are smoothing the data to support the crisis. Thereby, giving weight to their need for grants. In my opinion.
Bearster, does it give you pleasure to twist my words? I said that the Ozone layer O3 in case you are scientifically illiterate, was 21 inchs thick in 1970. It is, as of 2000, 16 inches thick and is a problem. Sorry if you feel that takes away your rights. I didn’t do it. You can’t make a fact go away no matter how grumpy you are. Did you know that NASA is spraying the atmosphere now with Aluminum Chloride ALCL2, that is to try to reverse the effects. I wonder why? They have a little program called CARE. I don’t care, do you? Last time I checked Biochemistry is a real science. I know you can count. I just said it was hard to predict the weather as well as the dollar.
Jim, I probably live near you not that that matters and I have no interest in a grant. I do realize you probably are insulting me but one never knows on Jeff’s blog.
By the way, what point did I try to avoid. I think it’s ridiculous to suppose that man’s just being here has caused any change.
I thought you were very clear. I also think I am very clear. Please don’t infer that I give any political slant to my observations. That’s very narrow from an Austrian Capitalist. I consider myself a political Atheist anyway, especially now.
[...] Blogger Michael Snyder went further, predicting that 2011 may well be a year of food riots across the world. Although the Hindu said high food prices were no benefit to farmers, Think India took a more optimistic line, arguing that “High food prices should eventually be an incentive for farmers to produce more”. The Daily Capitalist concurred, stating: “This is Econ 101 stuff: let prices increase and let supply increase to meet demand”. [...]
[...] I’ve felt for years that turning food crops into disposable cups and fuel for gas guzzlers is immoral. I agree with Lomborg’s point [...]