In this weeks Farmers Weekly, Mark McAndrew says that rising land prices are due to several factors.
Last year the EU had a buffer stock of 14m tonnes of grain. This year we are down to a tiny 2.5m tonnes. There has been a boom in biofuels around the world and the drought in Australia has severely dented supplies.
He also mentions the figures from the worldwatch institute in Washington which suggests that about 5-8 billion hectares of land go fallow every year due to their deteriorating quality.
Because investors believe this is not just a blip but a long term shift in the supply/demand balance, they are in the market not just for farmland but are also in to food commodities and shares in companies that supply farm equipment, fertilisers etc.
Of course, we have been pointing this out from well before the current price rises in grain began. In late spring wheat was trading at £90/tonne. Now it is about £160/tonne. Hopefully the 2008 northern hemisphere harvest will be a good one because with allmost no carry over stock, a bad harvest would be a real disaster.
October 1st, 2007 at 5:44 am
The 2008 situation will be helped by no SAS?
Just wanted to say that I have tagged you for a funny, random and weird fact. Hope you don’t mind.
Hilary Benn MP, Secretary of State, says ‘the points raised by John Gossop on this topic in his book “Famine in the West” are very interesting. In al letter of 9th September 2007 he tells us he has ‘passed a copy to Defra policy officials for them to read.’
We look forward to their comments.
A recent study by the McKinsey Global Institute projected that India’s middle class will grow from 50 million today to an amazing 583 million by 2025.
As each person becomes more affulent, he or she uses much more energy and food, and because this pattern is happening throughout much of Asia and some other parts of the developing world, it is really hard to imagine how the earth can provide the needed resources. By then the total population will be around 8 billion.
Our present population of 6.6 billion , with a low proportion of heavy consumers is already causing serious damage to the environment so the prospect of 8 billion with a higher proportion of heavy consumers should be causing world leaders to be taking urgent action to improve energy efficiency at all levels. So far efforts are hopelessly weak.
Although experts tell us that it is impossible to blame every extreme weather event on man made global warming, they do say that the increasing number and severity of events allmost certainly is.
The affect on food production of strange and extreme weather is already helping to push up prices in the shops. The African floods follow drought, there again is drought in Australia causing the government there to again cut it’s yield estimate for this years wheat crop. In Europe we had record breaking rainfall in early summer in the west of the continent at the same time as drought in the east. Large areas of theUS also had severe drought.
If all this is caused by a one degree rise in average temperature, how on earth will we cope with the two degrees and more that now seems certain without drastic action being taken?
Many people have criticized the inneficient production of biofuels on good cropland, saying it will push up the price of food without helping the environment very much. The recent food price rises of meat, eggs and bread add to their complaints.
However, in the UK at least, high grain prices may mean that some of the biofuel production plants planned may not be built. It is just too risky to invest million in plant that may be uneconomic if grain prices remain high.
This leaves the polititions in a quandry, they need biofuels to give some small amount of fuel security in the case of a world crisis restricting the flow of oil imports, yet growing these pushes up the price of crops. It really does show that the world is becoming short of all sorts of resources in the face of a rising population hungry for more energy and better food.
One answer to this is to develop and use the Intact Harvester in a system that will produce both food and fuel from the same land at similar cost to just producing food by normal methods.
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