Wednesday, March 23, 2011
While Farming Declines In US, Food Prices Soar
In Thomas Jefferson's day, 9 out of 10 Americans cultivated the earth.
When Abraham Lincoln created the U.S. Department of Agriculture, half the country still farmed.
Under F.D.R., 1 in 5 Americans was still a farmer.
But now it's just 1 in 150, and closer to 1 in 500 for full-timers.
Farming is a dying profession. Only 6 percent of farmers are younger than 35, while 26 percent are over 65.
This is a dangerous development. Most Americans have lost touch with something that was traditionally considered fundamental and rudimentary from the dawn of humanity. And it all happened rather quickly, in the span of just a couple of generations.
Most of us think we can just roll on down to the store and pick up whatever necessities we may need. But what happens when there are supply disruptions and the store shelves run bare, as is happening in Japan at present?
Perhaps a more immediate concern is inflation. Between March 2007 and March 2008, global food prices increased an average of 43 percent, according to the International Monetary Fund.
And due to continually rising grain and fuel prices, global food prices are still increasing.
Last fall, the U.S. Agriculture Department forecast that food inflation — which was already rising at the time — would continue to “accelerate” through the first six months of this year. The USDA projected that food prices will rise 2% to 3% this year.
However, that may have been optimistic; wholesale food prices rose 3.9% last month, the most in 36 years.
At the same time, global prices for corn, wheat, soybeans, coffee and other commodities have risen sharply in the past year. That, in turn, has raised the price of animal feed, which has pushed up the cost of eggs, ground beef and milk.
More expensive food means that people have less money for discretionary spending, which is critical to grow the economy and create jobs. And it adds to growing concerns about wider inflation down the road.
Many economists expect food prices to keep rising through the end of the year. Consumer food prices will be about 5 percent higher this fall than at the same time last year, according to RBC Capital Markets.
In January, the UN’s Food and Agricultural Organization (FAO) warned of a possible “food price shock” if prices continued to rise.
According to the FAO, a basket tracking the wholesale cost of food commodities such as wheat, corn, rice, vegetable oils, and meats, has already topped the peak values of 2008, reaching 214.5 points (compared to 213.5 in June 2008).
As it stands, food prices are already at their the highest level since the U.N. began keeping track in 1990.
There are a number of forces driving the spike in global food prices. Floods in Australia, drought in Russia, and excessively hot weather in Latin America hurt harvests and are putting upward pressure on prices. Russia and Argentina have even halted grain exports.
Now, the worst drought in sixty years is threatening the wheat crop in China, the world's largest wheat producer. Viewing food crops as part of its national security, China has historically been neither a wheat importer or exporter. With 1.3 billion mouths to feed, the Chinese government protects its vital food assets and has avoided a reliance on other nations.
However, China may now need to import wheat, which will drive global prices even higher.
The implications for the US may not be as dire as in the developing world, where higher food prices have pushed more than 44 million people into extreme poverty since 2010.
However, rising food prices do negatively affect millions of Americans presently living on the edge. As it stands, 1 in 7 of our fellow citizens are now receiving food stamps.
Americans would be well-advised to take some measure of control over their own food security, and start growing food at home, in the backyard, or on rooftop gardens in cities. The once common vegetable garden is largely a thing of the past; it's time to bring it back en masse.
The average food in the US travels 1,500 miles to get to your plate. Due to rising fuel costs, that is not sustainable. Food production needs to become more localized. For both health and economic reasons, the local food movement must, and will, grow.
The global demand for food is growing along with the global population, which is expected to increase from the current seven billion to nine billion by 2050. World food production must increase by 70% between now and then to feed them all.
This will pit supply against demand, and it appears that supply will lose that battle.
As Jason Clay of the World Wildlife Fund recently put it, to feed all those mouths, "we will need to produce as much food in the next 40 years as we have in the last 8,000."
That should make your head spin.
Personal sustainability will be a buzz word of this century. Taking control of our own food security by learning to cultivate the earth again, as our ancestors once did, is vital.