| View previous topic :: View next topic |
| Author |
Message |
thepeel
Joined: 08 Aug 2004
|
 Posted: Thu Jan 03, 2008 8:05 pm Post subject: Forget oil, the new global crisis is food |
 |
|
| Quote: |
A new crisis is emerging, a global food catastrophe that will reach further and be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire, Donald Coxe, global portfolio strategist at BMO Financial Group said at the Empire Club's 14th annual investment outlook in Toronto on Thursday.
"It's not a matter of if, but when," he warned investors. "It's going to hit this year hard."
Mr. Coxe said the sharp rise in raw food prices in the past year will intensify in the next few years amid increased demand for meat and dairy products from the growing middle classes of countries such as China and India as well as heavy demand from the biofuels industry.
"The greatest challenge to the world is not US$100 oil; it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically," he said.
The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.
Mr. Coxe said in an interview that this surge would begin to show in the prices of consumer foods in the next six months. Consumers already paid 6.5% more for food in the past year.
Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade.
At the centre of the imminent food catastrophe is corn - the main staple of the ethanol industry. The price of corn has risen about 44% over the past 15 months, closing at US$4.66 a bushel on the CBOT yesterday - its best finish since June 1996.
This not only impacts the price of food products made using grains, but also the price of meat, with feed prices for livestock also increasing.
"You're going to have real problems in countries that are food short, because we're already getting embargoes on food exports from countries, who were trying desperately to sell their stuff before, but now they're embargoing exports," he said, citing Russia and India as examples.
"Those who have food are going to have a big edge."
With 54% of the world's corn supply grown in America's mid-west, the U.S. is one of those countries with an edge.
But Mr. Coxe warned U.S. corn exports were in danger of seizing up in about three years if the country continues to subsidize ethanol production. Biofuels are expected to eat up about a third of America's grain harvest in 2007.
The amount of U.S. grain currently stored for following seasons was the lowest on record, relative to consumption, he said.
"You should be there for it fully-hedged by having access to those stocks that benefit from rising food prices."
He said there are about two dozen stocks in the world that are going to redefine the world's food supplies, and "those stocks will have a precious value as we move forward."
Mr. Coxe said crop yields around the world need to increase to something close to what is achieved in the state of Illinois, which produces over 200 corn bushes an acre compared with an average 30 bushes an acre in the rest of the world.
"That will be done with more fertilizer, with genetically modified seeds, and with advanced machinery and technology," he said. |
http://www.financialpost.com/story.html?id=213343 |
|
| Back to top |
|
 |
Justin Hale
Joined: 24 Nov 2007
Location: the Straight Talk Express
|
| Posted: Fri Jan 04, 2008 2:05 am Post subject: |
|
|
| Biofuels endanger civilization, basically, as do fossil fuels. |
|
| Back to top |
|
|
thepeel
Joined: 08 Aug 2004
|
| Posted: Fri Jan 04, 2008 2:17 am Post subject: |
|
|
| Yup. And they, like fossil fuels, also have great lobbyists convincing governments to subsidize them. |
|
| Back to top |
|
|
OneWayTraffic
Joined: 14 Mar 2005
|
| Posted: Fri Jan 04, 2008 2:53 am Post subject: |
|
|
That really depends on how you get your biofuels. Using food quality crops longterm is really foolish: poor energy yield in both absolute terms per hectare and relative to the energy and investment inputs. Of course it's going to drive up prices; there's more demand for fuel than the current total world food output.
But blanket condemning biofuels isn't justified. Most companies and researchers are aware of the problems, and they're also aware that they are solvable. Biodiesel from algae can be produced at rates 20-100 times per hectare better than soybeans and doesn't need farmland to grow. Bioreactors or open saltwater ponds will do. The higher outputs (roughly 47tons/ha or 5000 gal/acre are under optimun conditions as in a bioreactor) the lower end was actually achieved in the 70's and 80's under a Carter initiated research program.
To sum it up one could put land that's currently unused for pretty much anything (Sahara desert) and grow enough algae there to replace all the worlds fossil fuel use. Given the infrastructure and investment into commercialization of the process anyway. |
|
| Back to top |
|
|
mindmetoo
Joined: 02 Feb 2004
|
| Posted: Fri Jan 04, 2008 4:00 am Post subject: |
|
|
| Unlike oil, anyone can grow food in their backyard. The food supply is a lot easier to increase. |
|
| Back to top |
|
|
Zutronius
Joined: 16 Apr 2007
Location: Suncheon
|
| Posted: Fri Jan 04, 2008 8:22 am Post subject: |
|
|
| victory/survival gardens anyone? |
|
| Back to top |
|
|
Kuros
Joined: 27 Apr 2004
|
| Posted: Fri Jan 04, 2008 8:34 am Post subject: |
|
|
| mindmetoo wrote: |
| Unlike oil, anyone can grow food in their backyard. The food supply is a lot easier to increase. |
How many urban Koreans, Japanese, or Chinese have backyards? |
|
| Back to top |
|
|
caniff
Joined: 03 Feb 2004
Location: All over the map
|
| Posted: Fri Jan 04, 2008 8:42 am Post subject: |
|
|
I am not a socialist/communist by a long stretch, but food socialism would be a nice pie-in-the-sky ideal.
To many fat b@stards walking around shaking the earth in the richer countries while a great proportion of the world's population doesn't have enough to eat.
I love when I see the fat christians on TV or at my door tell me about charity. What a freaking joke. Why don't you stop shoving food into your face, and send the savings to someone who could actually use a few calories? |
|
| Back to top |
|
|
caniff
Joined: 03 Feb 2004
Location: All over the map
|
| Posted: Fri Jan 04, 2008 8:58 am Post subject: |
|
|
| mindmetoo wrote: |
| Unlike oil, anyone can grow food in their backyard. The food supply is a lot easier to increase. |
I live in Korea. I don't have a backyard. Will I eventually starve?
edit: I missed Kuros' comment. Redundant. But I think South Korea is in a much better position to deal with global food shortages than their brethren to the north.
And this just at the time when Lee Myong Bak has been elected, who has gone on record as saying that any assistance given to NK must be accompanied by reciprocal action and accommodation to the south.
This could get interesting, but unfortunately it could be in a bad interesting way. |
|
| Back to top |
|
|
mindmetoo
Joined: 02 Feb 2004
|
| Posted: Fri Jan 04, 2008 3:08 pm Post subject: |
|
|
| Kuros wrote: |
| mindmetoo wrote: |
| Unlike oil, anyone can grow food in their backyard. The food supply is a lot easier to increase. |
How many urban Koreans, Japanese, or Chinese have backyards? |
Ummm you need not to take me so literally. My point is it is not difficult to increase the food supply. Third world nations are not the most efficient producers of food. There's a rather simple solution right there. |
|
| Back to top |
|
|
Safron
Joined: 05 Feb 2007
Location: portland, or
|
| Posted: Sat Jan 05, 2008 5:57 am Post subject: MOO |
|
|
I agree with this assessment, which is why I'm heavily invested in MOO. Check it out, food mutual funds are becoming increasingly popular for this reason.  |
|
| Back to top |
|
|
Julius
Joined: 27 Jul 2006
|
| Posted: Sat Jan 05, 2008 6:10 am Post subject: |
|
|
| mindmetoo wrote: |
| Third world nations are not the most efficient producers of food. There's a rather simple solution right there. |
The untapped potential of Africa is staggering. But i believe the Chiinese are doing what they can. |
|
| Back to top |
|
|
djsmnc
Joined: 20 Jan 2003
Location: Dave's ESL Cafe
|
| Posted: Sat Jan 05, 2008 6:28 am Post subject: |
|
|
| caniff wrote: |
I love when I see the fat christians on TV or at my door tell me about charity. What a freaking joke. Why don't you stop shoving food into your face, and send the savings to someone who could actually use a few calories? |
Hell yeah! Along with those emaciated Muslims telling people that Allah will give them the strength to kill their enemies before they blow themselves up in a city square full of their own people. |
|
| Back to top |
|
|
mindmetoo
Joined: 02 Feb 2004
|
| Posted: Sat Jan 05, 2008 3:15 pm Post subject: |
|
|
| There are many places in Africa where agriculture hasn't changed for centuries. India was much the same way. India was so bad it was the poster child for starving. "Eat your supper. Think of the starving kids in India." No one ever thought India would ever be able to feed itself. But then Norman Borlaug came along and started the green revolution. |
|
| Back to top |
|
|
Justin Hale
Joined: 24 Nov 2007
Location: the Straight Talk Express
|
| Posted: Thu Jan 10, 2008 8:29 pm Post subject: |
|
|
| OneWayTraffic wrote: |
But blanket condemning biofuels isn't justified. |
Ethanol in particular is bollocks though. It has caused a disastrous rise in world food prices and is worse for global warming than petrol, once you factor in the use of carbon-spewing nitrogen fertilisers. |
|
| Back to top |
|
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
