Showing posts with label FAO. Show all posts
Showing posts with label FAO. Show all posts

Saturday, August 11, 2012

This Is Your Food Supply On Climate Change

OK, I'm going to go out on a limb and say that I think that this year's climate extremes are linked to human-caused climate change.  We might not really have the definitive answer on whether that is true for 20 years, but I would like nothing better than to be proven wrong about the linkage I'm making today.  From a global food supply perspective, the effects of weather on 2012 food production is problematic no matter what its cause.  As bad as it seems, it might just be a "shot over the bow" relative to what me might expect in the future. The unfilled corn cob pictured above is a relatively decent example of what the US corn crop is yielding this year.

How Hot Is It?

This isn't just about low rainfall.  There is a recent graph about temperature extremes on the NOAA (National Oceanic and Atmospheric Agency) site that is striking. The 2012 difference from average is off the chart!


When it is both hot and dry, our dominant, rain-fed crops suffer the most.

It Isn't Just A US Drought

Yes, we have a massive drought in the US unlike anything we have seen for decades.  But there are also drought issues with wheat in Russia and excessive rain issues with crops in Western Europe that could ruin some of their harvest with mycotoxin contamination.  Ironically, the last season in Australia was better than many for their wheat crop which means that there is less low quality wheat going into the feed market that has been important for Chinese and other Asian meat production in recent years.
What ever this year's weather represents in a climate change context, it has been problematic for the global food supply.  The FAO (UN Food and Agricultural Organization) tracks the prices for various foods in international trade and generates a "Food Price Index" each month.  I've been blogging about this for a couple of years, but the new data released on August 9th is disturbing - particularly the data for cereals (wheat, rice, corn, soybeans,etc).  See the graph below


The red line is for the period 2010-12 and in the 30th month of that cycle we are seeing a 17% increase in one month - a steeper climb that was even seen in the 2007-9 price spike (green line).  This rise was seen even before the full magnitude of the US drought was known.  I shudder to think what the index will show next month.  The 2007/8 spike has been linked to a great deal of political insecurity and even credited as a driver of the "Arab Spring."  Hold on to your hats to see what this new price spike will mean.
Of course the impact of these high food trading prices depends on how dependent a country is on imports and how much of family income is spent on food.  There is an excellent new site from the Economist which compares countries around the world in terms of their food security and food spend.
I'll say it again.  This certainly looks like the sort of climate extreme and related food supply impacts that we would expect from climate change.  I both hope to be around in 20 years and to be proven wrong about my belief that "this is our global food supply on climate change."

You are welcome to comment here and/or to email me a sdsavage@sprynet.com
Drought damaged corn image from grifray

Thursday, July 5, 2012

Limited Encouragement In The Latest Release of the FAO, Global Food Price Index


Today, the Food and Agriculture Organization (FAO) of the United Nations released it's monthly update on global food trade pricing.  The overall "Food Price Index" that combines all categories did decline slightly, but less than the previous month.  The index is still substantially higher than it was at a comparable period during the last cycle.


During June, the Cereal price index remained essentially flat, mirroring the trend from the previous cycle but at a new higher level.  There had been hopes that record grain planting for the 2012, US growing season would help to increase stores this fall and lead to significant price drops.  A troubling and spreading drought is developing in the American Midwest.  Without some timely rainfall during the key period of corn pollination there could be significant crop loss.  This possibility is  already leading to price increases for current and future US grains.  It is impossible to know yet whether this drought, and all the other weather extremes of this year, are the result of Climate Change.  Many climate experts believe that it is.


Meat prices increased dramatically in this cycle compared to the last one.  This is driven by increased demand from the huge new middle class populations in countries like China and India.  Meat prices are also linked to grain prices so it is no surprise that they remain unusually high.


Dairy prices, which had shown two months of significant decline, continued to drop, but at a slower rate.


Oils were down for June, but that has only just now reversed an upward trend that began seven months ago.


Sugar prices are not really linked to the same trends as the other commodities because tropical sugarcane production is less seasonal and much less tied to yearly planting decisions.

The Data Still Suggests That We Are In A New Food Supply Paradigm

Last year at this time, I began pondering whether this second, unprecedented spike meant that the global food supply has entered a new paradigm.  For decades price cycles fit that old saying: "The best remedy for high food commodity prices is high food commodity prices."  That meant that when prices went up, farmers would farm more or more intensively and inevitably produce enough new supply to bring the prices back down.  Farmers still respond the same way, but the effect of their efforts to produce more is having less impact.  Part of that is that global demand is higher than ever based both on population and standard of living.  Biofuels are a new part of the equation.  I also believe that we will be able to look back in a decade or two and say that Climate Change is indeed behind the heat, droughts, floods and pest increases that keep limiting production.  That is why I have argued that the "face of climate change" should not be polar bears.  It should be the poor families around the world that depend on global food trade and for whom these stubbornly high prices are a serious burden.
You are welcome to comment here and/or to email me at savage.sd@gmail.com