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Food crises topple world leaders

Bloomberg Businessweek commentators Eric Pooley and Philip Revzin offered a very sobering look at the world’s food crisis recently.

“As the Tunisian dictator Zine el Abidine Ben Ali discovered in January, there is no surer route to political oblivion than to deny people access to affordable food. On Dec. 17, after Tunisian police assaulted a street vendor named Mohamed Bouazizi and seized his produce cart because, according to his family, he couldn’t afford to pay bribes, the 26-year-old Bouazizi doused himself with accelerant and lit a match. He died two weeks later. The riots that ensued — propelled in part by anger over high food prices — drove Ben Ali from power and spread to Egypt, Jordan, Yemen, and Algeria. Ben Ali may be remembered as the despot who was toppled by a vegetable cart,” wrote Pooley and Revzin.

The food crisis gripping the dictatorships of the Middle East is not being caused by oppressive tyrants. It is a real crisis that is sparking talk of food riots worldwide. People cannot afford to buy food. The U.N. Food and Agriculture Organization in Rome reported global food prices in January reached levels not seen since the 1990s.

Droughts in Russia and Argentina and torrential rains in Australia and Canada are cited for the world food crisis. There are other issues contributing to the food crisis like a growing world population, both poor and prosperous, demanding food. And it looks like the prediction regarding diminishment of the world’s available arable land is coming true.

Aarable land is being lost at the rate of more than 38,610 square miles (24.7 million acres) per year. By 2039, there may be only 0.53 acres of arable land per person, worldwide (6.8 acres of land to feed 13 billion people).

That is talking 2039. What about today? From what I can glean from the experts, there are very low stocks worldwide of basic commodities like wheat, corn, soybeans, rice and cotton.

Major U.S. newspapers are producing Page 1 articles about the rising cost of food, driven by world food shortages and America’s export customers are paying unbelievable prices to feed their people.

This worldwide food crisis is creating breathtaking prices for farmers here in the West, as farmers sell wheat and cotton for three times what they could just two years ago. Saudia Arabia and the United Arab Emirates leaders have curtailed or cut off water use for forage crops to save water for their people, and livestock producers there are buying hay from California at record prices. This is part of the reason alfalfa hay prices may be shoved to $300 per ton delivered to Tulare. Of course this is great for alfalfa growers, but more struggling dairymen may have to liquidate due to rising food costs.

Rising fuel and fertilizer costs are also tempering the unbelievable prices for many farmers.

Land prices have reached a level where speculators are flocking to rural areas in California to buy farmland, and this is driving up the rental cost of land.

A Tulare County real estate agent told me at World Ag Expo recently that a Midwest farmer came by his booth to say he had just paid $8,900 per acre for dryland corn ground that two years ago was selling for $3,400 per acre.

Even California specialty crops like almonds, pistachios and walnuts are selling in record volume worldwide at near record prices.

When a scenario unfolds like what we are seeing now, history and logic teach us that the world will eventually overproduce, supplies will eventually mushroom and prices plummet.

However, I do not recall a recent period when the price and supply of food toppled governments. The world’s population is not declining and no new arable land is being created.

These are good times on the farm, but it is a bit frightening to consider what the future might hold.

TAGS: Outlook
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