World Food Prices To Increase As The Worst Drought In Decades Hits The American Heartland

Worst Drought In Decades In The American Heartlands Threatens To Put Farmers Out Of Business -- The Telegraph

The worst drought in decades in the American heartlands threatens to put farmers out of business - and force up food prices across the world.

The fields on Eddie Melton's farm in the rolling terrain of western Kentucky should be covered by a thick green quilt of eight-feet high corn stalks at this time of year.

Instead, withered brown plants, barely half that height, are straggling out of the barren soil. The sorry landscape, repeated in states across the American heartlands, is testimony to the worst drought to strike the region for more than half a century "This drought has already devastated the corn crop," said Mr Melton, who farms 1,500 acres settled by his great-great-grandfather in the late 19th century. "We're just praying for some rain to save the soybeans."

The US agriculture department last week designated 1,297 counties across 29 of the 48 mainland states as "primary natural disaster areas".

Read more ....

Update: America's corn farmers high and dry as hope withers with their harvest -- The Guardian

My Comment: If this drought continues and starts to impact the other crops .... expect worldwide inflation on basic food stuffs .... and yes .... unstable societies and widespread unrest.

Current Drought Map For The United States

(Click on Image to Enlarge)

My Comment: This is bad. Expect inflation in our grocery bags this fall.

Hat Tip: Political Commentator

Is The World On The Brink Of Another Food Crisis?

The Department of Agriculture said 1,016 counties in 26 states are natural disaster areas caused by drought.

Food Crisis Fears As US Corn Soars -- Financial Times

Is the world on the brink of another food crisis?

It has become a distressingly familiar question. With the price of agricultural staples such as corn, soyabeans and wheat soaring for the third summer in five years, the prospect of another price shock is once again becoming a prominent concern for investors and politicians alike.

The debate marks a dramatic shift from just a few weeks ago, when traders were expecting bumper crops and policy makers were comforting themselves that – if nothing else – falling commodity prices would offer some relief to the troubled global economy.

But since then, scorching heat and a paucity of rain across the US has withered the country’s corn and soyabean crops, with the US Department of Agriculture this week making the largest downward revision to its estimate for a corn crop in a quarter of a century.

Read more ....

My Comment: For the moment other world crops are not impacted, but if one more major food producing region is hit with severe weather .... the world will be on the brink of another food crisis.

The Politics Of Rice

The Volatile Politics Of Rice -- Michael Richardson, The Japan Times

SINGAPORE — A campaign promise that helped bring Thailand's Prime Minister Yingluck Shinawatra and her political party to power in July elections is roiling the global market for rice, Asia's staple food that is now eaten by nearly half the world's population.

They promised their government would alleviate poverty in the countryside and raise rural income levels by buying unmilled rice, known as paddy, from Thailand's eight million rice growers at 15,000 baht ($480) per ton — double the pre-election price.

Read more ....

My Comment: Rice has always been Asia's major food staple .... with Thailand being the world's biggest exporter of the crop. But this dependency has meant that for consumers and the governments that monitor this very closely ..... they have always been one bad harvest away from disaster. The prospect of higher prices for rice in Asia .... that's a road that many in the region shudder when they think about it for it would mean social and political unrest that would impact everyone on the Asian continent.

China's Drought Is Impacting World's Food Supplies

How Will China's Food Supply Weather the Year of Drought? -- Time

In China food supplies and food prices are deeply sensitive topics. So by the time the U.N.'s Food and Agriculture Organization issued a special alert warning in February that a prolonged drought in the North China Plain was a “potentially serious problem” for the country's winter wheat crop, China's leaders had already mobilized. President Hu Jintao and Premier Wen Jiabao made visits to farming regions in north China, pledging cash, equipment and manpower to ensure the crop survived.

Read more ....

My Comment: The world is already at the brink of experiencing severe food shortages .... China's drought is only going to make the situation worse.

Rising Food Prices Will Guarantee More Unrest In The Arab World

Cost Of Eating Spikes For The Arab World -- Toronto Star

Let them eat bread.

That refrain, from the authoritarian regime of President Hosni Mubarak, kept impoverished Egyptians from violent rebellion for decades.

When food riots broke out in 2008, he contained them by promising to keep up the subsidies that were the barrier between malnutrition and starvation for one-third of the country’s 80 million people.

The protests that brought down his regime were driven by hunger for democracy rather than bread. But as Egypt and other Arab countries remain volatile, there are fears that spiking grain prices could propel new discontent.

In the past week, wheat prices soared by 17 per cent, a worrying sign for those countries where it is a staple of the diet.

Read more ....

My Comment: This is also a problem for other countries outside the Middle East. In China, food inflation is raising the alarm for its leaders, and for most African countries .... higher prices has always meant political/social upheavals that inevitably lead to war and conflict.

'One Shock Away From Crisis': World Bank President

Photo: The World Bank's president urges leaders not to ignore food inflation

World Bank President: 'One Shock Away From Crisis' -- BBC

The president of the World Bank has warned that the world is "one shock away from a full-blown crisis".

Robert Zoellick cited rising food prices as the main threat to poor nations who risk "losing a generation".

He was speaking in Washington at the end of the spring meetings of the World Bank and International Monetary Fund.

Meanwhile, G20 finance chiefs, who also met in Washington, pledged financial support to help new governments in the Middle East and North Africa.

Mr Zoellick said such support was vital.

Read more ....

Update #1: Food price rises pushing millions into extreme poverty, World Bank warns -- The Guardian
Update #2: World Bank: Food prices have entered the 'danger zone' -- The Telegraph

My Comment: From my vantage point, that crisis is already here. Throw in one more bad year for crops .... this crisis will then become a disaster.

Fears Of A World Food Crisis Increases As Prices Continue To Escalate

Graph from The CNN

Food Prices Hit New Record Highs, Says UN Food Agency -- BBC

Global food prices have hit record highs, and could rise even further, according to the United Nations.

The UN's Food Price Index rose 2.2% in February to the highest level since the UN's Food and Agriculture Organization (FAO) began monitoring prices in 1990.

It also warned that spikes in the oil price could make the "already precarious" situation in the food market even worse.

Apart from sugar, the FAO said all commodity groups had risen in price.

Oil prices recently hit two-and-a-half year highs due to political unrest in North Africa and the Middle East.

Read more ....

More News On fears Of A World Food Crisis

IMF warns of high food prices -- IMF
FAO food price index hits record high in February -- Reuters
Food Prices Reach New Record & Could Push Higher -- Barron's
Food Prices Reach Record High -- Wall Street Journal
Rising Oil Prices Will Send Food Prices Even Higher -- Wall Street Journal
Food prices hit new record -- The Telegraph
Oil shock could push world food prices higher -- CNN
FAO warns on oil as world food prices hit record -- Reuters
World food prices hit record highs amid oil jitters -- AFP
World food prices hit record highs: UN food agency -- Economic Times
A Devastating Perfect Storm: Global Food Prices Continue to Rise -- American Progress
Global food prices increase for eighth straight month, UN agency reports -- UN News Centre
Hungry planet: Food prices rise to record -- Global Post
The Effects of Rising Global Food Prices -- OilPrice.com

UN: High Food Prices Triggering Global Unrest

(Click Image to Enlarge)

Food Prices: Up, Up and Away -- Time Magazine

The U.N.'s Food and Agriculture Organization (FAO) released a report this week that food prices reached an all-time high in January. The Food Price Index rose 3.4% in January to 231, surpassing June 2008 levels that sparked food riots and hoarding from Haiti to the Philippines. Prices of all commodity groups except meat — cereals, oil, dairy and sugar — gained over prices in December.

Read more ....

More News On The Global Food Crisis

Food prices triggering global unrest: UN --AFP
France, FAO see food crisis risk as prices soar -- Reuters
Global food prices hit record high -- Al Jazeera
Record world food prices spur warning -- Boston.com/AP
World Food Prices Hit New Record -- Voice of America
Food Prices Worldwide Hit Record Levels, Fueled by Uncertainty, U.N. Says -- New York Times
World food prices at record high: UN -- CBC
Food prices at twenty year high -- BBC (Audio)
U.N.: Global food prices surge 3.4% in January -- Market Watch
India's food inflation shoots up to 17.05% -- Economic Times
Food Costs At Records as U.N. Warns Of Volatile Era -- New York Times/Reuters

One Reason Why There Is Unrest In The Middle East

Food prices are set to become an increasingly politicial issue. Photo: HEATHCLIFF O'MALLEY

U.N. Food Price Index Hits Record High -- Wall Street Journal

SINGAPORE—The United Nations has said its monthly food price index moved to a record high in January due to higher global prices of cereal, sugar and vegetable oils.

The index, published Thursday by the U.N.'s Food and Agriculture Organization, rose for the seventh consecutive month to 231 points and is up 3.4% on the month.

The figure is the highest level registered since 1990 when the agency started monitoring prices.

Read more ....

More News On Global Food Prices

World food prices hit record high -- CNN
Food prices hit record high -- The Guardian
World food prices reach record high -- AFP
World food prices at fresh high, says FAO -- BBC
Global food prices hit new record high -- The Telegraph
Food prices at twenty year high -- BBC News (Audio)
Food costs at records, no let up on prices - FAO -- Reuters
FAO food price index hits record high in January -- Reuters
U.N.: Global food prices surge 3.4% in January -- Market Watch

Drought In China Will Impact Everyone

Chinese Premier Wen Jiabao (2nd R) listens as agricultural expert Cheng Xiangwen introduces a new species of corn at an agricultural research institute in Hebi City of central China's Henan Province, Jan. 22, 2011. Wen Jiabao wrapped up an inspection tour of the drought-hit Henan Province from Friday to Saturday, urging more efforts by local governments to ensure agricultural production threatened by the prolonged drought in many of China's grain producing areas. (Xinhua/Yao Dawei)

Crop Warning Over China Drought -- BBC

A prolonged dry spell in parts of northern, central and eastern China is threatening both crops and water supplies, Chinese state media says.

Shandong province is experiencing its driest weather for 60 years.

Half the wheat-growing land there is affected, while almost a quarter of a million people face drinking water shortages, the China Daily said.

Beijing has also been experiencing its longest dry spell for more than 30 years, another state daily said.

The Chinese capital has had no significant rainfall for three months, the Beijing Times reported.

Analysts say this drought is likely to put further pressure on food prices, which have been rising sharply for months.

Read more ....

More News On China`s Drought

Beijing and surrounding areas gripped by prolonged drought -- Irish Times
Key China wheat growing province hit by drought -- Bloomberg Businessweek
China province faces worst drought in a century -- Reuters
Key China wheat growing province hit by drought -- AP
China drought threatens water supplies: media -- AFP
China's wheat-growing areas hit by worst drought -- Business Recorder
Premier Wen urges efforts to fight drought, ensure agricultural production -- Xinhuanet
Lingering China drought sparks fears of wheat price hikes -- Xinhuanet

Can We Feed 9 Billion?

Seeds of Hope (March 2000)
Indian farmers from the southern stae of Karnataka showing the diversity of seed that their arid land can generate. From bottom left, going clockwise: mung (green gram); red gram; millet; horse gram; sorghum; wheat. (photo from the collection of Hugh Warwick )

How Can We Feed 9 Billion? -- The Telegraph

The world’s population is set to soar in the coming decades – but food supplies are already under pressure. Meanwhile, Britain and Europe have turned their backs on a great agricultural revolution, Clive Aslet writes .

Some friends had a memorable Christmas. They spent it with family in Belfast, where water could only be obtained by melting the snowman. Providentially they and the children had made a large one and it kept them going for two days, until the water supply returned.

They were of course infinitely better off than my relations in Brisbane, of whom I still anxiously await word. Both cases, however, illustrate how easily the life we all take for granted can be turned upside down. True, Queensland has suffered a deluge which in Biblical times would have been seen as an expression of extreme displeasure from above. But it took nothing more than some unusually cold weather to reduce Belfast to misery. The carefully calibrated machine that is a modern city broke under the strain. The most basic prerequisite of life suddenly went missing.

Read more ....

My Comment: A sober post on what is coming down the pipeline .... read it all.

The World's Food Chain Is Near The Breaking Point

The U.N. fears a run-up in food prices could spark a repeat of the deadly riots that broke out in 2008. In December, activists in Kathmandu, Nepal, beat empty plates in protest the rise in prices. SHRUTI SHRESTHA / Reuters

Global Food Chain Stretched To The Limit -- MSNBC

Soaring prices spark fears of social unrest in developing world.

Strained by rising demand and battered by bad weather, the global food supply chain is stretched to the limit, sending prices soaring and sparking concerns about a repeat of food riots last seen three years ago.

Signs of the strain can be found from Australia to Argentina, Canada to Russia.

On Thursday, Tunisia's president ordered prices on food staples slashed and indicated he won't run for re-election after deadly riots hit the North African country.

Read more ....

My Comment: Here is one more analysis on why world food prices are increasing .... the link is here.

Soaring Global Food Prices Raise Fears Of Social Unrest

U.N. Group Warns Of Potential 'Food Price Shock' -- Washington Post

LONDON - The Food and Agricultural Organization said Wednesday that the world faces a "food price shock" after the agency's benchmark index of farm commodities prices shot up last month, exceeding the levels of the 2007-08 food crisis.

The warning from the U.N. body comes as inflation is becoming an increasing economic and political challenge in developing countries, including China and India, and is starting to emerge as a potential problem in developed nations.

Read more ....

More News On Fears Of An Impending "Food Price Shock"

The coming hunger: Record food prices put world 'in danger', says UN -- The Independent
Food prices tipped to climb from record high -- ABC News (Australia)
Food crisis fears as global prices hit record high -- Sydney Morning Herald
Soaring global food prices spark fears of social unrest -- Globe And Mail
UN body warns of ‘food price shock’ -- Financial Times
Food costs hit record high as minister admits prices are 'a worry' -- The Telegraph
Food prices hit record high - January 06, 2011 -- Nature.com
UN food price index hits record high -- Montreal Gazette
UN Food Price Index tops records dating to '90 -- Bloomberg
Global food price index surged 25% in 2010 -- L.A. Times
Record high food prices stoke fears for economy -- Reuters
Factbox: Asia grapples with rising food prices -- Reuters
ANALYSIS-Rising food prices bring host of political risks -- Reuters
Food Costs Highest Since 1990: U.N. Food and Agriculture Organization Report (PHOTOS) -- Huffington Post

A Year Of Discontent Expected As World Food Prices Reach Record Levels

Global Food-Price Index Hits Record -- Wall Street Journal

LONDON—Global food prices hit a record high in December and are likely to continue rising in the year ahead due to inclement weather, raising the possibility of a repeat of civil unrest that erupted in emerging nations when prices last surged.

"The longer [food prices] remain high, the longer there is a possibility of a repeat of 2007 and 2008" food riots, said Abdolreza Abbassian, a senior economist at the United Nations' Food and Agriculture Organization, in an interview Wednesday.

Global food prices rose 4.3% in December from the previous month, according to the FAO's monthly food-price index published Wednesday.

Read more ....

My Comment: We have been fortunate in food production and being able to transport to areas of need. But with prices going up .... and they are in places like India and China where the demand for a Western diet is only increasing .... this impact will soon be felt globally.

Food Crisis Fears Return As Prices Rise And Harvests Fall

Food Crisis Looms As Prices Rise, Harvests Fall And Exports Are Banned -- The Telegraph

It’s the latest sign of an impending food crisis. Russia has just announced that it is to continue its ban on grain exports for another eight months – until the end of June next year. When the ban was first imposed in mid-August - after the worst drought for decades devastated the country’s harvest – it helped send up food prices worldwide.

Now prices are rising again – to their highest level in two years – and harvests are continuing to shrink. Global wheat and maize prices recently soared by 30 per cent in a few weeks, and have risen by almost twice that since April. Rice in Bangladeshi markets now costs almost twice as much as it did a year ago. And the US government now estimates that this year’s worldwide wheat crop will be 5.5 per cent down on last year.

Read more ....

More News On The World Food Crisis

Food price fears as US warns on crop yields -- Financial Times
UN experts predict food crisis -- Voice of Russia
US sparks concerns of food price hikes -- NineMSN
Another food crisis looms? -- Dominican Today
UN warns of food shortage -- The Age
The Food Crisis Of 2011 -- Forbes
Six casualties of the world food crisis -- The Guardian

U.N. Report: 22 Countries Facing A Protracted And Severe Food Crisis

FAO Says 22 Countries Facing Food Crisis -- Xinhuanet

NAIROBI, Oct. 6 (Xinhua) -- The UN food agency said 22 countries are facing enormous challenges like repeated food crises and an extremely high prevalence of hunger due to a combination of natural disasters, conflict and weak institutions.

The UN Food and Agriculture Organization (FAO) said these countries are in what is termed a protracted crisis and said assistance should be refocused for countries around the world suffering from double and triple shocks. The UN food agency said in its State of Food Insecurity in the World 2010 hunger report published on Wednesday together with the World Food Program (WFP) chronic hunger and food insecurity is the most common characteristic of a protracted crisis.

Read more ....

Update: UN report: 22 nations face protracted food crises -- AP

My Comment: I would like to say that it is the result of environmental changes that is making these countries suffer from severe food shortages. But the sad fact is that most of these countries are suffering from severe food shortages as a result of misguided policies from governments and/or wars and conflicts.

For years Zimbabwe has been this blog's poster child on how government policies can produce suffering and severe food shortages. No surprise .... what was once the bread basket of Africa is now on the UN's list of countries suffering severe food shortages.

What Are The 5 Most Food Insecure Countries

Top 5 Most Food Insecure Countries: Is Food Crisis Around the Corner? -- Real Clear World

Following a devastating wildfire in August, Russia put a halt to its grain exports, driving up the price of wheat by 45 percent in five weeks and raising fears that another global food crisis was imminent. Those fears turned out to be unfounded, but food challenges remain acute, particularly for the developing world. The United Nations Food and Agriculture Organization concluded last week that while there is no impending global "food crisis," there is a serious danger in price volatility caused by speculation, panic buying and hoarding. Even if global supply and demand remain in balance, fluctuations in the price of food can have a devastating impact on those already struggling to pay for their food.

Read more ....

My Comment: They list Cameroon to be the most food insecure country in the world .... a surprise because I would put countries like Somalia or Yemen at the top of the list.

Price Fluctuations A Threat To Food Security According To The UN

UN Warns Volatile Food Prices Threat To Food Security -- Voice of America

United Nations experts are describing volatile food prices as a major threat to food security. At a special meeting of the U.N. Food and Agriculture Organization in Rome Friday, they concluded that a repeat of the 2007-2008 food price crisis is not imminent, but new measures are needed to control fluctuations in grain markets.

Russia's exceptional drought and the country's ban on wheat exports have pushed up wheat prices to two-year highs. The increases have brought back bad memories of price spikes in 2007 and 2008, which triggered food riots in several countries around the world. But FAO Director-General Jacques Diouf says conditions are much different today. "The global production forecast for cereals in 2010 is still the third highest on record, and the world cereal stocks-to-use ratio is well above the 30-year low registered in 2007-2008," he said.

Read more ....

My Comment: Another UN call for governments to intervene forcefully in food prices and production .... as if that worked well in the past. If there is one universal constant in food production, it is that when governments intervene in influencing prices .... food shortages and higher food prices tend to be the result.

Buying Up The World's Farmland Is Resulting In A Backlash

"Madagascar's land is neither for sale nor for rent," said its new president

The Backlash Begins Against The World Landgrab -- The Telegraph

The neo-colonial rush for global farmland has gone exponential since the food scare of 2007-2008.

Last week's long-delayed report by the World Bank suggests that purchases in developing countries rose to 45m hectares in 2009, a ten-fold jump from levels of the last decade. Two thirds have been in Africa, where institutions offer weak defence.

As is by now well-known, sovereign wealth funds from the Mid-East, as well as state-entities from China, the Pacific Rim, and even India are trying to lock up chunks of the world's future food supply. Western agribusiness is trying to beat them to it. Western funds - many listed on London's AIM exchange - are in turn trying to beat them. The NGO GRAIN, and farmlandgrab.com, have both documented the stampede in detail.

Read more ....

My Comment: The value of farmland will only increase with climate change, a growing population, and a shift towards western diets. Anyone who is in the agri-business knows this, hence this burst in the purchasing of cheap farmland in the Third World.