Tuesday, April 1, 2008

The Cost of Farming, The Cost of Eating

Four dollars for a slice of pizza. Two dollars for a single bagel. Did you pay attention to how much that loaf of bread just cost you? Yes, food prices are going up, and it's not just because of the price of gas.

Make no mistake about it, it's more expensive to eat. With less land for crops, a drought in Australia and other countries, and a global market that can hook countries on food that they don't produce, the true cost of farming and food is complicated, and in its complications- more expensive.

For example, the NY Times article, Food Prices Rise, Farmers Respond, explains that US farmers are meeting one demand by cutting back corn production in favor of soybean production.

    If they carry through with their intentions, the resulting additional soybean oil could help alleviate global shortages of cooking oil that have led to sharply higher prices, hitting poor countries hard.

    But a smaller corn harvest would most likely raise prices for that crop, which could also increase the prices Americans pay for meat. Most corn is used as animal feed. Higher corn prices may also compound the difficulties of companies that use corn to produce ethanol as a motor fuel. Despite government mandates for the use of ethanol, those companies are struggling. They expanded so rapidly in recent years that an oversupply of ethanol depressed prices, even as the cost of their main feedstock — corn — was rising.

It's not as simple as just grow more of something to meet demand, even though I am this close to rioting at nearby Bageltique. Unfortunately, the cause and effect of the global food market has become a worldwide food crisis. An article in the CSM, Grain Prices Soar Globally, begins,

Bangkok, Thailand - - Rice farmers here are staying awake in shifts at night to guard their fields from thieves. In Peru, shortages of wheat flour are prompting the military to make bread with potato flour, a native crop. In Egypt, Cameroon, and Burkina Faso food riots have broken out in the past week.


Ms. M&P said...

Two dollars for a bagel?? Are those imported too?

The talk of food shortages at the same time as global warming makes me nervous. People haven't had such widespread food security for long and I get concerned that things could slip. The last thing the developing world needs is a backwards slide in access to food.

Thanks for explaining the corn situation. I read an article today with a completely different perspective ("let's beg the farmers to grow more!") and your post help me see the balance here.

PiggyBankBlues said...

no imported bagels!

good points about global warming and food shortages at the same time. also, i'd like to read the article with the different take. the farmers are actually choosing to grow less corn...