PRICE HIKE: Global prices for cereals, dairy, meat and other foods hit record highs in December thanks to a series of extreme weather events around the world.
Image: Rae Allen, courtesy Flickr
The United Nations' top food agency announced yesterday that world food prices hit a record high last month, igniting concerns among agricultural experts who are thinking back to the food riots that gripped developing countries just three years ago.
"It's a worrisome situation with prices this high," said Dan Gustafson, the director of the U.N. Food and Agriculture Organization's Washington, D.C., office. "The year ahead is what I think is the real concern at this point. ... It's not by any means inevitable that prices will come down," he said.
The food price index from the Rome-based U.N. agency measures the price fluctuations for commodities including cereals, dairy, meat, sugar and oilseeds.
Last month's average food price index came in at 215, whereas the peak in 2008 was 213.5. In December 2009, the figure was only 172.
The recent high is the culmination of a steady increase in prices over the past six months. It marks the highest food price index since food price figures were first recorded 30 years ago.
FAO attributes the upswing in prices to factors including the crop failures caused by a string of extreme weather events and high crop demands from an ever-increased global population. Many experts have linked the series of floods and fires with climate change.
"We can never tell if any particular weather event is impacted by climate change, but I can say there is every expectation we will see more of these weather events in the future and that these events certainly have an impact," said Jerry Nelson, a senior research fellow coordinating climate change work at the International Food Policy Research Institute.
Russian wildfires, Australian drought raise wheat prices
Wheat, for example, bludgeoned by Russia's wildfires, the heat waves in Australia and flooding in Pakistan, saw massive price surges last fall.
"The record rise in food prices is a grave reminder that until we act on the underlying causes of hunger and climate change, we will find ourselves perpetually on the knife's edge of disaster," said Gawain Kripke, policy director for Oxfam America, in a statement.
While high prices for sugar and oil were the key drivers for the high food index average, Gustafson pointed out that agricultural commodity prices -- although also high -- are still 13 percent below the peak June 2008 prices.
That may be a saving grace for the national security of developing countries that are heavily dependent on cereals as a food staple, he said. The price increases have also happened fairly gradually in the developing world, compared to what was seen in 2008 -- helping stave off riots, he said.
"The expectation is that food prices won't go down in the next six months," said Gustafson. "The margin of error if something goes wrong with prices this year is not very big," he said.
This food price news comes on the heels of new data on the cost of oil, which closed at more than $90 a barrel earlier this week.
"The last time we had a spike in food prices, it was related to increased oil prices, and that's because oil is an input into food for the production price," said Michael Livermore, executive director of the Institute for Policy Integrity.
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7 Comments
Add CommentThe causes are more likely related to economic conditions than to any supposed climate change. Commodities in general are high at the moment. Superimpose a bit of bad luck on weather and increasing demand and it magnifies the impact. There have always been fire & droughts, even before climate change.
Reply | Report Abuse | Link to thisAnother contributing factor is the 70% increase in the cost of corn, primarily due to ethanol requirements in gasoline.
Reply | Report Abuse | Link to thishttp://www.nytimes.com/2010/10/13/business/13corn.html?_r=1
Al Gore recently agreed that the ethanol requirements are causing corn shortages.
http://www.huffingtonpost.com/2010/11/23/al-gore-corn-ethanol-subsidies_n_787776.html
The lower dollar value also contributes in the U S.
Wheat is covered in the article, but the Pakistani flooding may cause rice prices to stay high too.
http://www.bloomberg.com/news/2010-09-09/global-rice-supply-quite-tight-prices-worrisome-biggest-buyer-says.html
This could be more of a problem than wheat or corn. More people depend on rice as their staple.
I agree. That fact that the economy is poor and that we are monetizing our debt making the dollar weaker may play a larger part in the price structure of food than you think.
Reply | Report Abuse | Link to thisOr it could be that people with the job of keeping an eye on food prices think it's peak oil, ethanol, weird weather increasing, money needed for crops being hoarded by the rich, and overpopulation all combining.
Reply | Report Abuse | Link to thisThe food riots did happen. Are you dismissing their effects? Do they have to happen closer than Mexico?
"Or it could be that people with the job of keeping an eye on food prices think it's peak oil, ethanol, weird weather increasing, money needed for crops being hoarded by the rich, and overpopulation all combining."
Reply | Report Abuse | Link to thisMoney for crops being hoarded by the rich?" The "rich" are "hoarding" the wealth they created? Is this one of those "the the poor are poor because rich are rich" arguments?
I take exception. Capitalism, the creation of wealth, has provided the highest standard of living for the greatest number of people in the history of civilization. Name for me please an economic system that has done better, or one as yet untried that would do better if put into practice.
If you can't then please don't accuse people who great wealth of somehow unfairly keeping it for themselves.
We are changing the thermodynamic properties of the earth. These properties determine the climate. Weather is just variations about a mean. The means are changing. As the means change, you can and should expect that events which would have been very rare become less so. As rare events become less rare, you can expect coincidental occurrences of them to be less rare. So, it might be a bit of a coincidence that Russia had a very bad harvest the same year that Australia will have. However, since the agricultural infrastructure is optimized about means that have existed for hundreds, if not thousands, of years, you can expect that changes in weather patterns imply more negatives than positives. And, you can expect that extremely rare occurrences and coincidences of negative events become less rare. In short, our ability to grow food for the global population will become less reliable, and our population is growing rapidly.
Reply | Report Abuse | Link to this"We are changing the thermodynamic properties of the earth." PROVE IT!
Reply | Report Abuse | Link to thisOBSERVATIONS suggest that climate temperature has risen about one tenth of a degree centigrade per decade in the course of the past 100 years. This is not remarkable. Climate is extraordinarily variable and has always fluctuated in the past. There is no observed ideal "mean" temperature.
Why should "rare" events become less so simply because the the temperature has increased? Why should only "extreme" (read: catastrophic) weather events be explainable by human causes?
It is the height of arrogance to suggest that agricultural infrastructure has "optimized" at a given "mean" temperature over the course of, say, 100,000 years.
Are you trying to say that natural variability doesn't exist? Or that the temperature can't have been higher or lower than your artificial "mean" during that period?
There is not one single climate event that has occurred in the past one hundred years that hasn't happened at least a thousand times in the past one hundred thousand years.
Everything old is new again.