Guest Post by Willis Eschenbach
People have short memories. One of the things that I have learned in this game is to start any particular quest by finding the longest continuous records and look at them to understand the situation. This prevents the unjustified exaggerations that result from a short-term view of an issue.
Take the world food supply. People worry that the food supply is being negatively affected by climate change. Or if not, that it will soon be negatively affected, by gosh, and this time they’re not kidding. Really.
The recent radical rise in food prices from 2005 to 2008 is often cited as if it were climate related. People claim that the prices of basic foods doubled in that time period and that climate played a part. To to take a different, long-term look at that, consider the ancient relationship between cost, supply, and demand. Here’s how it works, and it’s bozo simple, first rule of economics:
Scarcity drives up prices.
This basic relationship means that if we want to see if food in the world is getting more scarce or less scarce, we can look at the change in the commodity price over time. Here’s that chart, showing the yearly changes in corn and wheat prices since the mid 19th Century.
Figure 1 from Sumner, “Recent Commodity Price Movement in Historical Perspective”. After the 2008 peak prices subsequently dropped. Recently they have begun rising again, although they are below the 2008 levels. SOURCE: American Journal of Agricultural Economics
Some things are immediately apparent from this graph.
First, the claims are true, the price for the basic foodstuffs corn and wheat did double from 2005 to 2008.
Second, that doubling only returned the price to the 1995 level.
Third, the historical price levels (with excursions for two wars and the great depression) were pretty stable until after WWII. Since then (with the excursion for the 1971 oil shock), things have greatly improved.
Fourth, I see no trace of a climate-related signal in that graph. Might be one, but if so, it’s well hidden.
Fifth, during the period 1866 – 2006 there have been a number of shifts in climate, both PDO related and otherwise. There has also been a general warming. As far as I can tell, there is no sign of either of those in the corn and wheat price record.
SUMMARY
The recent increase of commodity prices is a real issue. And of course it hits the poorest hardest, so it should not be ignored.
However, a look at the historical record shows that we’re doing pretty well, thank you very much.
So while of course we should be concerned by any price increase that strike at the poor, the claims of impending food-related climate doom have no more historical or evidentiary foundation than any of the other, more familiar alarmist claims. Farmers have dealt with the vagaries of weather for centuries. When the climate changes they do what they have always done. They change their farming practices to adapt. The idea that a change of a few degrees will shrink the world’s farm production reflects the naive thinking of someone who has never been a farmer. If a couple degrees of warming over the next century were the farmers’ biggest problem, they’d be overjoyed …
w.
Willis: However, a look at the historical record shows that we’re doing pretty well, thank you very much.
So hard to remember; so easy to forget…
Don’t forget to look at the demand side as well as the supply side if you wish to understand price changes, willis.
The developing major industrial powers with their increasingly affluent and still massively growing populations are influencing world demand in a big way and extra demand necessarily contributes to the price rise of food. (Just as it has contributed to the rise of fuel prices world-wide)
I supect there is a climate related issue. As you say it is a matter of supply and demand. With much of the food crop diverted to biofuels there has been a sudden increased demand. So it is our response to a non existent threat that is the problem. Lots of human diseases are associated with an overactive immune system. Humanity, as a whole, has the same problem.
Willis, thanks for yet another generous helping of rational thinking and for laying out research results that ‘join the dots’ for us. Unlike the young female writer in the Guardian of London who, under the banner headline ‘A Perfect Storm of Stupid’ excoriates American weather forecasters and newspeople for NOT linking what she sees as increasing major weather events with climate change, and caps it all off by having a hack at Sarah Palin’s stupidity for reporting a more historically correct version of the story of Paul Revere’s famous ride. And the MSM wonders why it is becoming increasingly irrelevant!
Add to that the increase in free fertiliser in the atmosphere, and the global food production outlook is even rosier.
I have to wonder how much recent policies of using food for fuel (e.g. corn for ethanol) have contributed to the rise of grain prices. It isn’t climate change that causes higher food prices, it’s climate change scare mongering that’s doing it.
Nice work, Willis. I would have though bio-fuels would be adding significantly to the price pressures on grains.
Once again, resorting to old fashioned facts and logic. Whatever happened to post-normal (lack of) thinking???
Thanks for the 2008 1995 comparison, most useful.
I see the difference between corn and wheat prices has declined as we move along in time. I would attribute that to better market information. Some regions are stuck with planting corn, others stuck with wheat, but the regions able to grow either have the information needed to decide which they’ll plant, and which crop will bring the best return. That tends to level production between the two crops.
Much of the long decline in prices is likely due to our reckless addition of CO2 to the atmosphere goosing up yields. The 2005 price climb is due to the artificial demand created by the gasohol mandate.
One of the main stresses put on the availability and price of these major food staples is the production of bio-fuel.
The monetary return from bio-fuel compared to the return as FOOD will mean that prices are driven upwards.
I am of the opinion that bio-fuels should ONLY be produced from waste or unusable crops and certainly should not take PREFERENCE over food supply, which is what mandated levels of ethanol in fuels is apt to do.
To my eyes it looks like since the warming trend at the end of the Little Ice Age prices have been trending down. This is even clearer during the recent warming.
Anyway, might food to fuel not have had any recent effect on prices?
Brilliant work.. the only thing to fear.. is fear itself.
Absolutely spot on, Willis. People who talk about food supply and AGW have probably never stepped on a farm or talked to a farmer. They are these ivory tower academic types who have no clue to what they are talking about.
This is funny. Did they stop making food price graphs after 2006? Why post an outdated graph except that it makes your argument look better by magicking away the recent price spike? And no, adding this info in the caption does not count.
I agree with the general thrust of WIllis’ argument but see more of a climate food price link than he does.
For example, there is a weak correlation between wheat prices and solar activity, first noted by William Herschel in 1801.
The Alarmists have it back to front (as usual). It is lower temperatures that are the problem, not higher ones.
I’ve put up a post with more info.
http://tallbloke.wordpress.com/2011/06/10/food-prices-and-climate-change-was-william-herschel-right/
Corn shortages caused by Ethanol production then?
I live in a rural community. We’ve just gone through the bright yellow phase – fields full of rapeseed. and now we are going through the maize phase. Both of these crops are more prevalent than food crops; wheat, potatoes, greens etc. So you could call the rising prices of food climate related since far too many plantings are to feed the biofuel industry and are not food commodities.
It’s a bloody disgrace.
Resilience is a beautiful thing to behold.
Pakistan has managed to produce a near-record winter wheat harvest in spite of the lingering post-flood hardships.
http://reliefweb.int/sites/reliefweb.int/files/reliefweb_pdf/node-405372.pdf
Food prices are increasing in the shops in the UK and prices are still rising. Climate excuses are poor, when growing conditions are poor somewhere they are good elsewhere. This is weather related and has been the norm since humans started agriculture. There are two things that are causing food prices and one is bio-fuel production the second is stockpiling to make a bigger profit. Now we have technology to safely store food basics in best condition it makes this easier for the big moneyed corporations to do. I am not accusing all food supply corporations of this but some do it.
Petroleum prices also cause price rises but this will be across the board not just basic food staples.
In the recent frenzy of Amazonian rainforest clearing, blamed on the Govt’s policy stalling- the main crop planted was Soya bean. This is happening in AMAZON and INDONESIAN Rain Forest’s,
From this Guardian piece Quote: Officials said the most dramatic situation was in the soy-growing state of Mato Grosso, where farmers are said to be using tractors and giant chains to rip up vast tracts of native forest.
http://www.guardian.co.uk/environment/2011/may/20/brazil-crisis-cabinet-amazon-deforestation
Here the palm oil rush of destruction. SORRY THIS IS PAINFULL.
http://e360.yale.edu/feature/the_cost_of_the_biofuel_boom_destroying_indonesias_forests_/2112/
This report on a published Paper discusses different fuels. Soya Bean is KING.
http://news.mongabay.com/2006/0711-umn.html?fb_comment_id=fbc_10150185261874940_16928488_10150217190359940#f3994df8c5fb714
This details the scale of Brittish firms BIG BUY UP to produce- Bio DIE sal.
http://www.guardian.co.uk/environment/2011/may/31/biofuel-plantations-africa-british-firms
Quote: Crest Global Green Energy has the largest recorded landholding, 900,000ha in Mali, Guinea and Senegal. Tom Stuart, the chief executive, said: “It is true in some cases [that biofuels displace food], but in our projects we ‘inter-crop’, planting as much food as biofuel on the marginal land we have brought into agricultural use.
Quote: “Growing jatropha in a profitable way on dry lands is a myth. It needs water, fertilisers and pesticides to provide high yields,” Auge said. Jamidu Katima, at the University of Dar es Salaam. End quote.
One paradox is that dissplaced local farmers clear more land. Good read.
Thanks. Will Gray.
Rising prices are usually caused by increasing debt and printing money. If the price of food, fuel and precious metals are rising but the amount of money in the system was static, then the price of other goods would either be stalling or falling rapidly, i.e. it would be a zero-sum game. We don’t see that. The global economy is actually growing slightly in GDP terms. Therefore we must come to the conclusion that there is actually more money in the system. Putting more money in the system tends to cause commodity price inflation because the rate at which we produce commodities is fairly fixed or can only grow slowly. Thus the “quantatative easing” (i.e. printing money) in Europe and the US together with banking system bailouts (i.e. transferring bank debt into government, EU or UN debt) has resulted in severe price inflation of commodities.
Generally this isn’t a big issue – rising prices but more money in the system to pay for the rising prices. Meanwhile all the extra cash in the system is helping to effectively write-off all the bad debt with freshly printed bills (not so good if your a creditor mind, like the Chinese and the oil-rich states of the Mid-East who are finding the debts they are holding being written off by bills still warm from the printing press – but now you know why their people are turning against them).
Konfacela says:
June 10, 2011 at 1:27 am
Konfacela, you misread the caption. The graph contains data up to and including the price spike in 2008. Since the paper was written in 2009, that’s all the author had to work with. I would encourage you to update his work to 2010 and report back to us … I considered doing it, but I figured I’d leave it as an exercise for the interested.
w.
tallbloke says:
June 10, 2011 at 1:43 am
For example, there is a weak correlation between wheat prices and solar activity, first noted by William Herschel in 1801.
I was under the impression that Hershel didn’t have data going back far enough (sound familiar) initially and the correlation, although weak, was confirmed later.
Good article Willis, as usual. In economics, it’s a very simple graph. As population keeps rising, the demand curve for food (and housing, clothes, shoes, education, computers,…) shifts to the right. But supply also shifts to the right as people are not just consumers, they are also producers and traders of food (and housing, clothing, shoes,…). If you remove the effects of inflation, by converting nominal prices to real prices, you will most likely end up at the same price level as 100 or 200 years ago, or even at lower real price, while the quantity supplied has expanded a thousand or a million times.
The developing major industrial powers with their increasingly affluent and still massively growing populations are influencing world demand in a big way…. marchesarosa.
=========================================================
The major developing industrial powers are presumably China, India and (perhaps) Brazil.
All those countries have a fertility rate around or below replacement http://en.wikipedia.org/wiki/File:Countriesbyfertilityrate.svg.
Yes, I agree … it’s bozo simple. But most bozos don’t do research, they just read press releases with tales of gloom and doom.
If it’s not bio-fuels it’s the new strain of wheat rust which attacks previously rust-resistant wheat crops. Right now it appears to be mainly impacting parts of Africa, but the fungal spores can travel quickly to infest new areas of the globe. While the impact isn’t being seen globally yet, it can be devastating to those parts of Africa where crop losses are major.
Still, there is hope on the horizon in the form of new varieties of wheat that are not only resistant to the new strains of fungus, but also promise a 10% to 15% improvement in crop yields.
So, what’ll it be … government studies and grants to give us another useless computer model, which feeds no one, or studies and grants to keep improving food crop varieties and yields? Again, it’s bozo simple.
There are many reasons why commodity prices fluctuate, weather being only one of them. The futures market and a desire to make a profit is a big part of it. Here’s a bit of info from Ag Online that discusses recent stocks of the big 3. http://www.agriculture.com/news/crops/watch-out-f-falling-cn-stocks_2-ar17068 .
As others have commented, food prices are being increased by climate change – climate change policy, that is. European Union directives require that road fuels contain a proportion, up to 10%, of biofuel – ethanol or biodiesel as appropriate. Wheat, corn, and agricultural land are being diverted to make fuel to burn in our engines, which reduces the amount available for food and pushes up food prices – globally.
So we have to pay more for our food. An inconvenience for the comfortably off, a real worry for those on the breadline, life and death for the very poor in developing countries.
What does this crazy policy achieve? About a 1% decrease in CO2 emissions (road transport accounts for 20% of EU emissions, 10% of that is 2%, and a lot of fossil fuel goes into producing and distributing the biofuel, so maybe 1% net). I leave it to others to calculate how many milli (micro?) degrees of warming that may or may not save.
Re: My previous comment.
Here’s a link to the story on wheat rust –
http://www.physorg.com/news/2011-06-super-varieties-wheat-boost-yields.html
The alarmists will simply look at the graph and conclude the doubling of corn and wheat from 2005 to 2008 is due to hitting the tipping point of CAGW coupled with Peak Oil. Their summary statement will be that we are doomed and it is worse than we thought.
News just in Konfacela……………. Now this is what I call climate disruption. /sarc end.
Also
24% of the U.S. corn crop is now mandated to go to ethanol!!!!
Remember Indonesia’s massive deforestation for palm oil based biofuels? Let’s hope this madness stops soon. :>(
Greens are just in the pay of BIG BIOFUELS. /sarc? :O)
The developing major industrial powers with their increasingly affluent and still massively growing populations are influencing world demand in a big way and extra demand necessarily contributes to the price rise of food. (Just as it has contributed to the rise of fuel prices world-wide)
Except you’re talking rot.
Firstly the major industrial powers don’t have “massively growing populations”. Many are stable, some are retreating. It’s the poor countries (largely Africa) that have growing populations. The First World just isn’t eating that much more than it used to.
Secondly, fuel prices aren’t rising consistently in line with population or demand. They are high at the moment, but US domestic crude hit a post WWII low in 1998. If the Middle East calms down the price will come down. It has very little to do with demand at all. (I would guess, but couldn’t find that production and distribution costs have lowered, and the quality of petrol has certainly improved greatly.)
In most countries fuel is very expensive because it is heavily taxed. Even then it’s cheaper than bottled water in many places!
Hey, but don’t let facts spoil your Malthusian enthusiasm!
Recent rise in global food prices is due to commodity futures speculators – in short – greed. It is another bubble ponzi scheme that must be burst to protect people at large from predatory economic forces, especially the poor. Even the UN sees this now.
R. Farr
Good catch! It seems the terrible floods had a silver lining.
And……
@ A C Osborn says:
June 10, 2011 at 1:44 am
Corn shortages caused by Ethanol production then?
No, but tight corn supply results in higher input costs for ethanol producers, which means the price of ethanol goes up slightly. http://www.dtnprogressivefarmer.com/dtnag/common/link.do;jsessionid=9E613E5D3DAEEE3147E2D66A85295110.agfreejvm2?symbolicName=/free/news/template2&product=/ag/free/news/rightnow&vendorReference=0702E6A8&paneContentId=2002&paneParentId=70104
Well written, thought through, well done! My dog pooped on the wrong side of the lawn this morning, can I attribute that to AGW?
Nice one Tallbloke, I understood he won bets of the price of wheat by watching Sunspots.
Konfacela says:
June 10, 2011 at 1:27 am
Willis has answered you on that point. However, if using a limited start & finish point, of Willis’s choosing, he would only be matching people like the Wet Office’s Dr Vicky Pope on her temperature graphs which, to prove the 21st century was still warming just as the end of the 20th century, chose a finish point of 2007 for her trend line, but of course published in 2009. She chose to ignore the last two years because they didn’t fit her argument! It’s all about where you start & where you finish in the climate game,
Looks like life was good in Kansas in 1919.
Rumour has it that the Phosphorus supply is going to run out within 90-300 years (depending whom you beLIEve) — and without P in abundant and pure supply, modern agriculture is not going to be possible.
To use a hackneyed phrase (which I like): what’s up with that?
Adding to Ryan’s comment – we should not assume the denominator ($) as an uninvolved and constant measure of value, especially since Nixon’s closing of the gold window. Measured against gold, I think food prices would be pretty level over the past few years – the spike was in the decline in value of that very special paper, not the increase in food price.
We have decided that corn, even at $7.80/bu is plentiful enough to burn in our cars for fuel. Consequently, the price OPEC sets for oil has a substantial influence on the price of corn, and to the extent there is substitution, on the price of other grain crops. And since percent mandates exist, companies that sell gasoline must pay whatever the the market demands for the corn to make the ethanol they must purchase in order to blend with the gasoline they want to sell. So, by this linkage in law and regulations having the effect of law, government has pushed food out of the way as the primary price driver for corn. Or to put it another way, we now grow corn first for fuel and if there is any left over, it is used for food purposes. This is so wrong.
It should be observed that we have this absurd policy in a vain attempt to have “sustainable” energy policy. However, we grow a lot of this corn on land that sits atop an ocean of coal that we cannot mine because to do so is not “sustainable”, But we draw read lines around vast areas of offshore oil and gas deposits because that is not “sustainable” either even as we give several billion dollars in loans to a Brazilian oil company to drill for oil off their shores, but we must not drill off our own shores. Go figure.
Willis, Why not look at it this way:
http://www.geoffstuff.com/Willis.jpg
Maybe you have uncovered another inverted proxy.
Intersting summary. There is, however, a climate signal there at the end of the graph. It is called government subsidies and programs diverting food to produce biofuel! There is also a federal reserve/treasury signal there with all the printing of money and devaluing the USD that is going on.
Climate disruption is here. All around us there are agricultural calamities caused not by the weather but by disruption.
Australia is suffering with record harvests following the climate change caused floods. :O(
Record harvest powers GrainCorp to 66pc profit leap
Record harvest in eastern states despite floods and cyclone
Victoria’s flood-defying record harvest
Blaming climate change on rising food prices is a red herring. It is used to further the green agenda but at the same time hide the problems the green agenda causes. Example: Farms today use tractors. Tractors need fuel. If fuel prices rise, it costs farmer more money to grow crops. Fuel prices rise because of many reason, one of which is because the greens won’t let us drill. So while the greens blame AGW for higher prices, they are one of the ones to blame. Then this green fantasy of ethanol from a food crop is also hurting food prices. If it costs more to feed a cow, it raises the cost of beef and dairy products. And milk is used for a lot of things. Of course we already know that a cow on a farm is 1,000 times as deadly to the earth than a non-domesticated cow because of methane. (At least, that is the way the greenies act.)
The rise in food prices is affected by many things. Although climate change does not affect food prices, climate change hysteria does affect food prices.
Recent food and commodity price increase has more to do with excessive money printing in the US than any other causes. More dollars chasing the same quantity of goods and services bid the price up. Nothing to do with climate!
The Russian wheat harvest is worse than previously thought! This is more evidence of global warming calamity for you. :>(
I re-did the graph to have it up to date, and corn prices adusted for inflation are back to 1984 levels (not 1995). Prices since 2005 tripled (3.3X), not doubled. The last two peaks (2008 and 2011) reflect the increase from competition from energy use. Reasons for this are most probably related to climate change policy rather than climate change. If you need any graphs on commodities (or financial or economic), just let me know, it only takes me a second to do.
The recent rise is all speculation, nothing else. From 1934 to 1999, sane laws restricted agricultural hedging to the actual players in agriculture, which meant hedging was a damper on market swings. In 1999, Congress repealed those restrictions (along with the similar Glass-Steagall restrictions on banking) and the speculators took over. It wasn’t until 2006 that Goldman Sachs found it profitable to move into agriculture in a big way. When they did, all hell broke loose.
Full story here:
http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-how-goldman-gambled-on-starvation-2016088.html
Wheat prices go back further than the graph lists, though as you go further back, transportation time and expense must make a mess of the data.
While writing http://wermenh.com/1816.html and before that, reading Brian Fagan’s The Little Ice Age, I came across something that said wheat prices fluctuated around $1 per bushel between the 1700s, and the US double digit inflation in the 1970s. I can’t find that now, sigh. One excursion was in 1816, where Fagan noted seed corn in New England reached $4 per bushel, the regional crop having been destroyed in multiple frosts. Of course, the constant price is due to the extreme productivity improvements driven by mechanization, fertilizers, and plant husbandry.
(1816, the Year Without a Summer, provided some impetus for the Erie canal, which opened in 1823, and was soon superseded by railroads.)
Worth reading: Influence of Solar Activity on State of Wheat Market in Medieval England which refers to prices between 1259 and 1702. Lead author Lev A. Pustilnik is with the Israel Cosmic Ray Center and they used 10Be data to track solar activity.
Here are the population growth rates from the World Bank indicators for these very “developing major industrial powers with their increasingly affluent and still massively growing populations” – the data shows their population growth rates have been in decline.
According to the Warmists at GRIST
The problem facing us for the rest of this century might not be overpopulation but a stagnant / ageing population.
“Overpopulation: The Making of a Myth”
http://www.overpopulationisamyth.com/overpopulation-the-making-of-a-myth
Curiousgeorge says:
June 10, 2011 at 3:58 am
Guess what caused the tight corn supply in the US? Cold, wet weather. Yes weather and not climate.
http://www.reuters.com/article/2011/06/10/us-ethanol-prices-idUSTRE7591E320110610
24% of the U.S. corn crop is now mandated to go to ethanol.
http://www.usatoday.com/money/industries/food/2011-02-09-corn-low_N.htm
sandyinderby says:
I was under the impression that Hershel didn’t have data going back far enough (sound familiar) initially and the correlation, although weak, was confirmed later.
William Stanley Jevons was the guy who studied records of grains from India (and elsewhere in The Empire) and confirmed it. He also is known for “Jevons’ Paradox” which demonstrated that more efficient use of coal resulted in MORE coal use, not less. (It becomes cheaper for each individual use, so folks have more uses…)
http://chiefio.wordpress.com/2009/05/12/jevons-paradox-coal-oil-conservation/
This is also why we all went to more efficient cars and now consume more motor fuel than ever before… That 35 mph makes it economical top buy a home 40 miles from work and commute longer… Thus the rush to the suburbs…. The “conservation uber alles” folks hate that, so have sprouted a variety of post normal economics to try to erase Jevon’s Paradox … It isn’t working, IMHO…
Per Corn Prices
Major impacts:
40% of USA Corn now goes to bio-fuel. We have LOTS of corn. Enough to burn, it seems.
Oil Prices. Lots of fuel is used in agriculture. Put an oil price chart on a grain price chart and you can see the fuel price spikes. Oil spiked to about $120/bbl and food prices rose… Gee… Like in both WWars, and in the ’70s.
China is becoming wealth. As folks get some money, they eat more meat. You can eat a pound of grain (takes a couple of days…) or feed 10 pounds to a cow to get a nice 1 pound steak that is gone in 30 minutes 😉 For pork and chicken it’s more like 3 pounds of grain / lb of meat. China is buying a lot of grains now. They will buy even more as they have more steaks and KFC ….
Weather has resulted in some minor price moves as the cold and wet has caused delayed planting. This ought to resolve in the next couple of seasons (as things tend to even out, or farmer adjust). It’s not hot that’s being the big deal, it’s the wet…
There are other less pervasive impacts as well (noted by others). One thing I would note, though, is that “speculation” does not set the price. It can “discover” it faster, but the price is set by supply and demand. If a speculator buys a 100,000 ton wheat futures contract and then can’t sell it, he has 100,000 tons of wheat dumped on him.
From the wiki:
So any speculator that “guesses wrong” and can’t sell the contract by settlement is going to be eating a lot of corn and wheat….
A batch of speculators can only drive up the “price of wheat” to the point where the demand and supply curves are in balance. They can make that happen much faster than the process of waiting for all the harvest to be in and auctioned at market. This is called “price discovery” and happens daily and at high speed. To the extent some speculators buy a lot of wheat and drive prices too high, they need to then sell out those contracts before anyone notices that fact or one of two things will happen. a) Price of their futures contract drops as others short it into the overpriced condition. or b) They are going to have a LOT of wheat delivered…
Basically, speculation can move the price faster, but not further, than it would otherwise go; though there can be wobbles on the way to equilibrium as “news hits” and folks bet on what the news will mean. But bet wrong and you get slaughtered… because the demand / supply curves win in the end.
Summary:
Want cheap porkchops and bread? Stop feeding 40% of the corn to cars and drill baby drill for oil… Oh, and use known Gas To Liquids and Coal To Liquids technology to make those into gasoline and Diesel. Help China plant more crops more efficiently too.
@ Jimbo says:
June 10, 2011 at 5:49 am
Curiousgeorge says:
June 10, 2011 at 3:58 am
Guess what caused the tight corn supply in the US? Cold, wet weather. Yes weather and not climate.
I’m quite aware of that distinction. Did you somehow think I was inferring that climate was the cause?
I agree with many of the comments, thanks for the rational approach.
A couple of thoughts come to mind:
– is the chart adjusted for inflation
– the monetary standard changed from gold and silver to script during the time frame
– agricultural production and imports have radically changed over time
– heat tolerant crops and the related alarmist claims
Scarcity Drives Up Prices
Markets and commodity futures are forward looking, typically 6-9 months, and seasonal. The price of corn, wheat, sugar, etc. is heavily influenced by cost of transportation and weather events. The strong La Nina has, as usual, introduced droughts in some regions and flooding in other areas. In addition to the price of oil, flooding in the central midwest, for instance, has delayed planting which in turn has influenced the crop futures price.
Cost of production and transportation don’t cause scarcity but they do drive the price up.
Related to corn, there’s simply too much of it. So, ADM invented alternative uses for it like high-fructose corn syrup and ethanol in the ’60s. Not the best idea given that corn requires petrochemical fertilizers, returns very little to the soil, and takes a longer time to grow. Corn is a very inefficient crop but farmers like to grow it over other more labor intensive crops.
There are a number of factors that have influenced the price of corn and wheat (1866-2007). Its not just supply and demand.
“Fourth, I see no trace of a climate-related signal in that graph. Might be one, but if so, it’s well hidden.”
Ah, but you forgot all the conditions for all the scenarios! The vulcanos! The aerosols! The hidden heat! The comets!
Willis, any connection to the recent Malthusian-like post by Tom Friedman on the NYT a few days ago?
(http://www.nytimes.com/2011/06/08/opinion/08friedman.html)
Amazing how this theme never dies.
JDN2 says:
“I have to wonder how much recent policies of using food for fuel (e.g. corn for ethanol) have contributed to the rise of grain prices. It isn’t climate change that causes higher food prices, it’s climate change scare mongering that’s doing it.”
++++++++++
There seems to be a great deal of speculator activity – enough that President Obama announced a few weeks ago a mildly publicised investigation into price manipulation of the food commodity market. In the same way, the ‘shortage’ of oil is really a shortage of refining capacity, not oil. As it is in no oil company’s interest to increase the total refining capacity (lowers prices!) approximately no capacity has been added since the early ’80’s.
It seems to be that turning maize into ethanol is just a money grab – it involves a subsidy, after all. Having the US toss a few million more tons of subsidised maize onto the world market will only exacerbate the existing problems created for the poor whose local maize vendors sell food below the local cost of production. Some radicals claim that this practise, perpetrated by the EU and the USA in equal measure, is intended to impoverish groups of countries and to prevent the emergence of effective competition from the food industry of those targeted countries. Whatever the case, it is a long-standing policy. One case about which much has been published is the destruction of the South African dairy industry by EU dumping milk products below the cost of hiring a few African labourers to tend their own cows. In Mexico, the same situation prevails only it is small scale maize growers and dumped US maize.
Food prices are similarly being manipulated, subsidised, used as fodder for speculation and the ‘profits’ are retained by middlemen, benefitting neither the farmers nor the consumer not the taxpayers funding the whole shebang. If you see the names of large international accounting firms popping up as beneficiaries, you are closing in on the right stink. It is a sophisticated form of rent-seeking (sophisticated compared with climate change pork-barrelling).
Food prices would probably be a lot higher if not for the natural warming since the LIA, as well as the additional plant food man has added to the atmosphere. Farms have also become more efficient, and that trend will continue as developing countries catch up to developed countries.
On the other hand, Climate Alarmism has probably made food prices somewhat higher, by punishing “carbon”, and, if the catastrophists get their way, food prices will be forced even higher, hurting the poor the most, and resulting in more widespread hunger, malnourishment, disease, and death.
Only if you think that Global Mean Temperature has any meaning. I don’t.
Another issue is the use of farmland in Africa for non-food crops. Europeans are increasingly spending their NDI on flowers for mum which they get not from Holland but from Kenya. The World Bank has encouraged this push for cash crops rather than food crops resulting in huge mega-farms run by European retailers that take all the best irrigated land and leave the poor to scrabble for food amongst the rocks.
It’s OK to worry about the poor when food prices go up, but not a single libtard politician bats an eye when creating policies that either directly or indirectly cause an increase in energy prices, which causes ALL prices to go up. Morons. Damn we need to flush the toilet that is our government (much of the world’s, too.)
Mark
The long postwar slide in real food prices is generally attributed to the technological advances in agriculture, collectively referred to as the Green Revolution. Coincidentally, that is the time that atmospheric CO2 started taking off from a baseline of around 280ppm, to around 310ppm in 1950, to 330ppm in 1975, and 390ppm today. I wonder how much of the increased agricultural abundance of the past 70 years can be attributed to increased CO2. I suspect it is a small, but non-trivial part, based on what we know in general about the effects of increased CO2 on agricultural productivity, drought resistance, etc.
Being seeing ads in the DC Metro that biofuels have helped reduce the cost of gasoline by 89 cents a gallon. How can a fuel that costs more than gasoline reduce the cost of gas when added to gas? Or is such a claim accurate? As is usual, I can find dozens of seemingly reputable reports on the web the report incredible benefits and an equal number that refute the claim. All I know is my “seat of the pants” assessment as a motorcycle racer. I would never run an alcohol blend in my race engine. For performance considerations if nothing else.
UnfrozenCavemanMD says:
“I wonder how much of the increased agricultural abundance of the past 70 years can be attributed to increased CO2.”
The rise in ag productivity closely tracks CO2: click
There is solid evidence that increased CO2 causes rapid plant growth:
click1
click2
click3
Plants don’t grow by using soil for building material. If that was the case, you would have to re-fill your flower pots as your petunias grew. Plants grow by stripping the carbon out of airborne CO2 molecules to build cellulose, and emitting the oxygen as a byproduct. More CO2 is better for plants, as is apparent in the resulting rise in agricultural productivity.
“The idea that a change of a few degrees will shrink the world’s farm production reflects the naive thinking of someone who has never been a farmer. If a couple degrees of warming over the next century were the farmers’ biggest problem, they’d be overjoyed …”
Exactly. Which is why I took issue with the “study” cited on WUWT a couple of weeks ago about a 1C increase in temperatures having a massive impact on (I think it was) wheat production in Canada. There is more than a 1C variance sometimes from year to year already, and yet the food production hasn’t collapsed.
We had a cool wet spring here in the US midwest. However, even though the corn planting was 2-4 weeks late, the corn is taking off like crazy. I expect to see another year of great yields unless we have dry July/August like we sometimes do.
As for ethanol impacting prices … not much in the US. We still have surpluses EVERY year. We’re just producing more corn than before. The corn for food is still sufficient. The real problem is monetary policy. Quantitative Easing is the real cause of the higher prices. It has driven up the price of ALL comdodities not just oil and food. We don’t make ethanol from silver.
As so many of your posts demonstrate, we have lazy ignorant media creating meaningless emotional reports to a population that is increasingly susceptible to such drivel by virtue of their own ignorance and inability to understand rational thought. I’ve long argued (unsuccessfully) that we need to see our failed education systems as central to the long slow decline we are in.
It’s not because of any lack of particular nuggets of imparted knowledge. It’s because we aren’t creating thinkers. We aren’t creating (Wilis type) people who can develop a meaningful context for anything they witness. As a result they’re easily manipulated by emotionally driven arguments. They’re unarmed in the battle of ideas.
As a related thought on supply and demand pricing, if we here in the U.S. were to go strongly into developing our own….shudder….fossil fuel resources, it’s possible that we could control World oil prices to the effect of seriously challenging OPEC’s abilities to do the same – or at least its ability to effect us in particular – as well as its member countries’ income with which to fund Islamofascism’s terrorism and the spread of Sharia’s blatantly supremist Totatitarianism, and even progressively threaten the existence of the Islamic Theocracies themselves via peacefully increasing the forces from within those countries directed towards the evolution of freedom and against Totalitarianism.
Therefore, I also hereby announce my intention to run as a candidate for the Presidency of the United States of America!
Geoff Sherrington says:
June 10, 2011 at 4:23 am
Willis, Why not look at it this way:
http://www.geoffstuff.com/Willis.jpg
Maybe you have uncovered another inverted proxy.
Plus, CO2 = CO2 + warming, is good! But I’m afraid it wouldn’t pass peer-review due to the lack of Catastrophe.
The food supply is being negatively impacted by the following: climatic cooling / drying (it may only be a short wave version but God forbid it’s the long wave version e.g. the end of the interglacial), reversals of human development, economic stress, the carbon markets. As the next Age of Migrations unfolds and the cooling proceeds we’ll be thrown back into a much more primitive, less scientific set of food development methodologies.
Witness it, we are walking in the footsteps of 5th Century Europeans.
David says:
June 10, 2011 at 5:18 am
Thanks, David. Did you do the calculations in constant dollars?
w.
Humans have enjoyed a relatively mild climate during the last 10,000 years or so of the Holocene. Even the 8.2 kyr event and the less dramatic “Little Ice Age” were nothing compared to what the climate has been like for hundreds of thousands of years before the Holocene (i.e. very variable and tending to be cold and dry). A strong case can be made that the mild Holocene allowed the rise of human civilization through the rapid advance of farming the major crops like wheat, rice, corn, etc.
What the Holocene has been (and some would argue it is now coming to and end) is a period where the climate stayed in a nice RANGE, not too cold and not too hot, and more importantly, not too variable. The highest peaks of the Roman warm period down the coolest of the Little Ice Age were nothing compared to the rapid and much larger swings in temperatures during the last glacial.
The price of food this month, or next, month, much like SST’s or the ENSO cycle is pretty unimportant when trying to look at longer term trends. What can be pretty certain in the longer term is that the mildness of the Holocene will end (either to get much cooler or much warmer, it makes no difference) and this will have a huge impact on the ability to grow enough of everything to feed the large human population. Preparing for a change in climate, one way or another, and hardening the food supply through the creation of hardy varieties of crops or changes in agricultural practicies is just smart and prudent.
And of course, in addition to climate changes, the food supply and food prices are now completely dependent on the flow and supply of oil. Any disruption in that, or huge spike in oil prices will complete disrupt and adversely affect the price and availability of food.
Fascinating graph! You can read history by it!
Rising grain prices are not bad news for small grain produces in the 3rd World. In many places, the small farmer has greatly benefited from the increased cash he (and his family) can get for their rice, barley, or wheat crop. It is the urban poor — and the ‘welfare poor’ in many countries — that are adversely affected. And, as many point out, the rising prices are not so much due to the actualities of grain supplies, but due instead to manipulative commodities futures trading. …… that and the senseless turning-food-into-fuel mania.
All the assertions that corn for ethanol is pushing up food costs simply does not fit the facts. Corn today is 1/2 the price it was in the late 1970’s when we had not meaningful fuel ethanol program and before mandates for ethanol added to gasoline existed. That price spike for corn to 2x todays inflation adjusted price was due to energy costs.
Oil prices are a major factor in the cost of food, and food prices closely follow world wide fuel prices.
If the corn for ethanol assertion was true corn prices today would be much higher than they were in the late 1970’s on an inflation adjusted basis. We are just so used to artifically low corn prices, that we think getting actual cost of production to grow the stuff is a rip off. It is not.
http://www.inflationdata.com/inflation/images/charts/Corn/corn_inflation_chart.htm
Corn production is not stagnant, but has been increasing steadily for 60+ years.Corn yields per acre have increased 4x since 1940, today corn yields are between 150 and 160 bushels per acre, in 1980 they were about 120 bushels/acre and in 1940 yields were near 40 bushels per acre.
There is no corn shortage due to fuel ethanol. U.S. Corn Output Per Pound of Fertilizer rose 55% in The Past 35 Years (circa 2007)
http://www.agry.purdue.edu/ext/corn/news/timeless/YieldTrends.html
In the 1970’s we exported 13 million metric tons, by 1979/80 we exported 62 million metric tons.
By 1985 exports dropped to 31 million metric tons due to low demand growth in production in other countries and U.S. Government price supports that held prices up. In the second half of the 1980’s exports went back up to the 60 million metric ton range. In 2007/2008 we exported 61 million metric tons of corn AND fed the booming fuel ethanol industry at home.
2009 corn yields were at a record 165.2 bushels per acre, and our corn exports are only 15% of the U.S. corn production. We produced something like 13.3 billion bushels from 88.8 million planted acres of corn in 2010.
Larry
The weather would affect yield. Production efficiency and market forces (futures, hording, government give-aways to starving third world nations, emerging markets not driven by economics [bio-fuel]) would affect price. Find a profit/yield plot – that may show more.
At the tail end of the graph you can see the inflection point where millenarian Gaia worshiping craziness kicked in right when the temperatures went down and storminess increased in the preferred mid latitude growing locations. Would be interesting to see the more recent data points.
hotrod (Larry L) says:
“All the assertions that corn for ethanol is pushing up food costs simply does not fit the facts. Corn today is 1/2 the price it was in the late 1970′s when we had no meaningful fuel ethanol program and before mandates for ethanol added to gasoline existed.”
I agree that higher energy prices are partly to blame. But ethanol diverts production, and demand being the same, food prices will be higher. In other words, if there was no ethanol production, prices would be lower.
Part of the rise is in response to inflation, which is kept artificially low in the official numbers. In fact, inflation is approaching 10% and commodities are responding. I was a real estate broker in the 1970’s when inflation was this bad, and I remember when VA mortgages were 17.5% and FHA loans were 18.5%. Commodities were rising fast then, too. [The upside was that it helped boot the incompetent Jimmy Carter out of office.]
The real worry is much higher interest rates, which will prick the overspending bubble and cause more economic and social carnage than we have seen so far.
“All the assertions that corn for ethanol is pushing up food costs simply does not fit the facts. Corn today is 1/2 the price it was in the late 1970′s when we had no meaningful fuel ethanol program and before mandates for ethanol added to gasoline existed.”
I don’t know what you;re talking about. I know not very long ago corn was 10 ears for $1. Then we started making ethanol. Next thing I know corn is 2 ears for $1. If those 2 things are not related, it is an unbelievable coincidence, and pure coincidences are really quite rare…
em smith; my memory is clouded but I seem to remember that the price of certain goods, foodstuffs notably, are very elastic at the margin. As such a speculative witholding of a fraction of supply will have a more than compensatory increase of price on the remainder; aka price hikes and starvation. As such the speculators do not “find the price” they can control it very simply.
Willis Eschenbach says:
June 10, 2011 at 11:21 am
David says:
June 10, 2011 at 5:18 am
I re-did the graph to have it up to date, and corn prices adusted for inflation are back to 1984 levels (not 1995). Prices since 2005 tripled (3.3X), not doubled. The last two peaks (2008 and 2011) reflect the increase from competition from energy use. Reasons for this are most probably related to climate change policy rather than climate change. If you need any graphs on commodities (or financial or economic), just let me know, it only takes me a second to do.
Thanks, David. Did you do the calculations in constant dollars?
=============
It would be very interesting to see David’s corrected graph given 5 cent bread in the day, any chance it can be posted with the article?
Eyal Porat says:
June 10, 2011 at 6:49 am
“Willis, any connection to the recent Malthusian-like post by Tom Friedman on the NYT a few days ago?
(http://www.nytimes.com/2011/06/08/opinion/08friedman.html)
Amazing how this theme never dies.”
It’s the way Friedman earns his money. What is amazing is that anyone would still buy the NYT.
Some here seem to think that small changes in temperature averages make little difference to agricultural productivity given the large diurnal range in temperatures. The following figures show movements in the Köppen climate boundary in the US during the 20thC.
http://www.sturmsoft.com/climate/suckling_mitchell_2000_fig2_3.gif
Small changes in average seasonal temperatures translate to non-trivial changes in growing season length. Hans Erren provided the figures to me when I asked why, if the temperatures over the continental US were rising, that the USDA had revised its planting charts to reflect the opposite case?
It’s worth noting that in the coolest decade, the 1970s, that the People’s Paradise (USSR) had to import wheat from the US to avoid mass starvation.
@paul brackley. M memory is also clouded, but I seem to remember that this sort of speculation was one of the reasons for Victorian Robert Peel ramming through the Corn (wheat) Laws in the UK, thereby earning the eternal enmity of the landed class.
Agricultural production levels are influenced by many factors; fuel prices, seed cost, livestock costs, land costs, regulations, labour costs, technological innovation, fashion, disease, social changes, and the weather. Agricultural output is only one of a number factors which in turn influence agricultural commodity prices, which in turn, amongst other things, influence the price of food.
I would suggest that the recent rises in world commodity prices has absolutely nothing to do with climate ( or probably even bio ethanol) and everything to do with economics, otherwise you have to come up with a convincing argument as to how climate change has caused a doubling in the gold price!
I am old enough to remember when the government had huge wharehouses full of food. Our population was less then half what it is today and our food storage was 100 times greater. While I agree that food prices are NOT that bad yet I want to point out that we are more susceptable then ever to any problems in the food supply chain. When something does happen to interrupt food supplies the prices and availability we will be in trouble. Look at the chart you used in the story. You see a couple of major spikes? THAT is what will hurt us.
“One German organic farm has killed twice as many people as the Fukushima nuclear disaster and the Gulf Oil spill combined.”
Instapundit » Blog Archive » QUOTE OF THE DAY: “One German organic farm has killed twice as many people as the Fukushima nuclear…
I say, ban organic foods. We can’t know if they’re safe!
If we keep feeding the planet via organic food prices will go lower as less demand will ensue.
Once again I find myself recommending “Scarcity and Growth” by Barnett and Morse (the original version – there were a couple more involved sequel editions by other authors). They performed a similar analysis for several commodities, which thoroughly debunked the alarmist models of the Club of Rome in “Limits to Growth.” Ironically the wheel has come around again and we find ourselves battling those who would peddle alarmist models in order to push their policy agenda upon society.
Concluding Remarks [ American Journal of Agricultural Economics — from the graph caption above]
“The percentage price increases for grains from 2006 through 2008 were among the largest in the 140-year history for which U.S. data are readily available (figure 2). That said, at the end of 2008, real prices of grain remained near those of just two decades earlier (figure 3). Government policymakers often fail to appreciate the strength of forces driving commodity prices, and policies often exacerbate market imbalances or use commodity market flux as a rationalization for income transfers to favored groups. Looking forward, relatively minor demand-side adjustments to biofuels policy may allow grain prices to moderate significantly….”
Government policy should not be allowed to interfere with free markets <– I like that part. Would someone please tattoo it on the EPA's forehead.
GoneWithTheWind says:
June 10, 2011 at 1:27 pm (Edit)
I am old enough to remember when the government had huge wharehouses full of food. Our population was less then half what it is today and our food storage was 100 times greater. While I agree that food prices are NOT that bad yet I want to point out that we are more susceptable then ever to any problems in the food supply chain. When something does happen to interrupt food supplies the prices and availability we will be in trouble. Look at the chart you used in the story. You see a couple of major spikes? THAT is what will hurt us.
We live in a topsy turvy world where the supply of food is kept to a minimum in order to maximise profit for speculators. These people are looking for a killing, of millions…
Complacency is a killer. We need to take control before the inevitable happens.
Yikes, last comment should read:
Government policy should NOT be allowed to interfere with free markets <– I like that part. Would someone please tattoo it on the EPA's forehead.
[Fixed. ~dbs]
As an economist I would like to toss my 2 cents into the QEI and QEII camp. Perhaps it is not obvious from within the USA as yet, but the quantitative easings (QEI and QEII) have debased your currency. The Australian dollar (heavily influenced by commodities exports) is at all time highs since it was floated in 1983. Because much of your imports come from China and they are pegged against the US$ (although slowly increasing the renimbi) the inflation impacts are not flowing through strongly yet. Another factor is the weak consumer demand over there at the moment.
QEII ends this month and the Fed has said no immediate QEIII … economists are split on what that means for the US currency. There is no obvious pent up demand for US bonds in a market that was dominated by the Fed. Personally I think the second recession is about to hit, probably triggered by European debts woes, and it’s anyone’s guess what happens after that. Traditionally people run back t o the US$ in time of crisis, and I suspect some of that will happen, but one has to wonder how long before Asia becomes the dominant economic force in the world. The latter is a question of when, not if… the economic centre of gravity is slowly shifting from the west.
as a lad i lived in northeastern montana. (really really big wheat country.) the farmers would grow and harvest their wheat and sell as much of it as they needed to to at least “service” the bank loans. the rest they would put in storage. (those round tin buildings that you see all over the place in the area.) every morning that whole end of the state comes to a stop about 9:00 in the morning when the radio stations broadcast the prices. when the price gets high enough then the people sell the wheat and use that money for daughters college money, new combinders, a davenport for the front room (parlor)……….
one of the folk above was worrying about a rust problem with the wheat. wheat gets rust problems, fungus problems, you name it it gets it. HOWEVER the united states government in the form of the department of agriculture has been developing rust resistant (for the particular strain that is giving the current problem) strains of wheat on “laboratory farms” since before 1900. (my great grandfather got fired off of one in 1906 for plowing an inelegent furrow at the edge of a test plot.) this is one of the reasons that russian peasants have been eating bread made with american wheat since the great depression.
anyone that claims to have “natural wheat” is not exactly truthful as the current wheats have been developed and redeveloped so many times over the last century + that none of the original wild wheat exists in commercial quantities. if any of it was planted the various rusts that the modern wheat is resistant to would gobble it up in short order.
C
pompous git:
if you are looking for figures for wheat exports you may not find true indicators in the agriculture figures.
look up dot railroad figures on the millions of tons of grain moved to west coast, mississippi and great lakes ports for export.
BNSF is the major railroad in this endeavor and their basic quantity is 26 cars of 110 short tons per car. they make a major attempt to run them in 104 car trains of which they have several hundred.
the reason that people don’t know about this trade or the size of it is that it is right in the middle of fly over country.
in this area during harvest time you get passed on the highway doing 80 by herds of large trucks hauling grain from the field to the elevator on the railway.
C
hotrod:
please comment on the crop rotation that when it happens will invietabley take at least some of the corn acreage out of production.
then bounce the ~8 year “bumpercrop” cycle off of that.
just asking.
C
Actually it’s shortages which drive up prices. Any economist can tell you that scarcity is a totally different concept. Indeed, my pupils a few years ago sat an exam in which one of the questions required them to explain the difference.
Bulldust says:
June 10, 2011 at 2:01 pm
As an economist I would like to toss my 2 cents into the QEI and QEII camp.
=======
Hi Bulldust,
I’ve been following the Fed statements closely as well as many of the QE related objectives. QE1 had its purpose but QE2 (IMO) is a complete failure.
QE3 is currently off the table though the “Street” mistakenly believes Pres. Ob will find a way to stealth it in under the table to support his 2012 hopes. The probability of a QE3 success is zero if openly discussed.
I disagree about a 2nd recession and suspect we’ll see a flight to USD quality which will significantly impact market pricing and turn the precious metals and emerging markets trades into a tail spin.
I’d be very interested in your opinion of the following article related to the actual economics.
The Balance Sheet Recession Continues
http://caps.fool.com/Blogs/the-balance-sheet-recession/602214
Regards,
John from CA
If we were facing a food shortage, I don’t think we’d be facing an obesity epidemic…..nice analysis, Willis!
After all, where else are you going to see – or induce – double digit ‘gains’ (the stock market, for any gains/upward movement previously evidenced in the DOW are actually done so with very thin stock trading volumes) using the results of seeding the investment banks with the products of QE1 and QE2 (Quantitative Easing) …
Hence, the movement in commodities …
.
This idea, that farmers can adapt to changing climate, may be a false one. The whole CAGW movement is a movement to turn our entire economy from a free enterprise/capitalist economy to a command economy. If it succeeds, farmers will no longer be able to adapt, because they will not be allowed to. They will do whatever their new masters, who believe in CAGW, tell them to do, or else.
Now the question is, what if, as seems increasingly likely, this whole farming idea is Wrong? What if, at the very least, we are in for several decades of 70’s style “ice age scare” cooling, or worse, are heading into a mini ice age? With our new masters having spent so much capital on convincing us of warming, they will not admit to cooling, as it would result in their losing power that they worked so hard to gain. Result, it may cool, but we will not be allowed to adapt to it because that would mean admitting that warming is wrong.
Result, we could have mass starvation. This has, indeed, happened before. During a previous little ice age, farmers adopted, substituting potatoes fror wheat on many farms when wheat was found to be subject to the new late springs and especially early falls. However, French peasants where unable, unwilling, or not allowed to adapt (they had a command economy). Result: famine followed by revolution, dictatorship, and war. Could this happen again? Do we learn from history?
mkelly said @ June 10, 2011 at 1:34 pm
“One German organic farm has killed twice as many people as the Fukushima nuclear disaster and the Gulf Oil spill combined.”
Instapundit » Blog Archive » QUOTE OF THE DAY: “One German organic farm has killed twice as many people as the Fukushima nuclear…
I say, ban organic foods. We can’t know if they’re safe!
——————————————————————————————————————
“Two workers missing since the natural disasters of 11 March have now been found dead in the turbine building of Fukushima Daiichi unit 4.
Kazuhito Kokubo and Yoshiki Terashima, aged 24 and 21 respectively, were found in the ‘-1’ level of unit 4’s turbine hall. The chairman of Tokyo Electric Power Company, Tsunehisa Katsumata, said they had been “working to protect the safety of the Fukushima power station after the earthquake and tsunami.” Similar basement levels of other reactors on the site have been found to be flooded, possibly by tsunami water flowing through cabling trenches close to the seafront.
One worker also died at Fukushina Daini after suffering serious injuries and becoming trapped in the crane operating console of the exhaust stack of one of the units during the earthquake.”
Two drownings, one trapped in a crane.
“U.S. Coast Guard Adm. Thad Allen, incident commander of the Deepwater Horizon disaster, said the deaths of two spill workers were reported Wednesday. One of the dead was from the “vessel of opportunity” program in which local boats are enlisted to help the cleanup effort. The other involved a swimming pool accident. He gave no further details.”
Two deaths, presumably both from drowning. That makes five deaths.
“German scientists were working today to confirm an organic vegetable farm as the source of an outbreak of E.coli bacteria that has killed 22 people and caused a food scare across Europe.”
Twice five makes twenty two? And where did the E coli come from? One of the workers forget to wash their hands after taking a dump? Now that would never happen on a conventional farm, would it? Get a life…
You’re making me hungry
Many years ago, Scientific American published a whole special issue about food worldwide, and one of the articles showed world food production versus energy input to the food system, for every conceivable economy from the most primitive hunter gatherers (yes they still exist) to the most well fed western “civilizations”. That straight line graph showed very clearly that energy input equals food output. You give an “Eskimo” bullets with gun powder energy instead of his spear, and he can kill more seals. His snowmobile burning gasoline, out does his dog sled for covering plenty for terrain searching form food.
So guess what the world wide consequence is of the present administration’s deliberate starving of the US energy market. If the USA doesn’t get energy (our own or someone else’s), the world is going to be short of food; this isn’t rocket science. Only New Zealand and France produce significantly more food per Joule, than the world wide ratio; a simple fluke of local weather patterns (at the time of the study). And collectively, those two don’t amount to a hill of beans as regards world food needs, so it is academic that they are a bit more efficient.
So the greens can go back to clambering around in fig trees for food if they want to; I’ll take a nice steak, even if I have to shoot it myself. And if the almighty hadn’t intended for us to eat cows; then why did she make them out of meat ?
The last refuge of politicians is to blame the speculators-or the Jews. So, I understand why there are many comments above condemning speculators. Each time there is a price spike, damned fool politicians have to blame someone (rather than being responsible and accountable themselves!) But very few people understand that speculators play a positive and important role in sharing the risk of unanticipated price fluctuations. Please see Dr. Thomas Sowell’s book “Basic Economics”.
http://www.amazon.com/Basic-Economics-4th-Ed-Economy/dp/0465022529/ref=sr_1_1?s=books&ie=UTF8&qid=1307800763&sr=1-1
Unfortunately, blaming the “speculators” can be a useful tool for politicians to cover up either their own causation of a problem or their inability to cure a problem. There is a long and (dis)honorable tradition of politicians doing just that. For example, every time the price of gasoline goes up Congress has investigations of the oil companies. And the fools in the so called main-stream-media carry the denunciations of “greedy oil companies” and “obscene profits”. Yet each time when the investigations come to naught, the same media boot licks never report that all those charges were baseless. Another example is how demagogues and politicians have, for some 2000 years, blamed the Jews for everything. And still do, after all they are the speculators.
It is discouraging that people fall for the same identical hoax every time. One would hope that eventually they would learn.
In recent years, the only politician of note who HAS NOT blamed others for his problems has been George W Bush. And see where it got him! (I would welcome examples of other politicians who did “man up” to the problems of the day.) When poor GW was president, he was deemed a failure when unemployment was around 5%. Now that unemployment is oficially 9%+, it is STILL his fault. And a recent study indicates that the real unemployment rate for African-American males is closer to 50%. But nobody, other than a few like me, seem to care.
Regards,
Steamboat Jack (Jon Jewett’s evil twin)
More bad news for the Malthusians:
http://nextbigfuture.com/2011/06/new-super-variety-of-wheat-is-rust.html
From 2002
World agriculture 2030:
Global food production will exceed population growth
http://www.fao.org/english/newsroom/news/2002/7828-en.html
So, Jack, can you give us an idea where all the cash paid out by the fed to former bond-holders via QE2 is residing right now?
Quantitative easing –
” Quantitative easing (QE) is a monetary policy tool used by some central banks to stimulate their national economies when conventional monetary policy has become ineffective. The central bank creates money through open market operations, such as buying government bonds and other financial assets, in order to increase the money supply and the excess reserves of the banking system”
Quantitative easing and the commodity markets
“QE is likely to boost investment allocated to commodities (derivatives and physical stocks of raw materials) by altering both prospective returns on different asset classes and the composition of instruments available for investors to include in their portfolios.”
Trapped: The Fed Has Painted Itself Into a Corner
” The Fed intended [“easy money” policies of zero interest rates (ZIRP) and quantitative easing (QE2) ] .. to lower long-term interest rates and to nudge investors into riskier assets, thus stimulating growth. At least one part of that strategy is working. By lowering the yields on traditional financial investments such as bonds to near-zero, the Fed has essentially forced trading desks and hedge funds to scour the globe for higher yields.
Many traders and investors have found that higher yield in commodities, which is where speculative money is now flowing in abundance, helping to push up prices. Because the price of wheat, for example, is roughly the same everywhere in a global market, these rapid price increases are destabilizing poorer countries where much of household income is devoted to food. ”
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Bolding above is mine.
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There are two things that are causing food prices to rise and scarcity of production is one and the second is stockpiling to make a bigger profit. Now we have technology to safely store food basics in best condition it makes this easier to hoard products.With wheat prices fluctuating it is hard to know the right decisions if you are a farmer or investor. It’s imperative to know commodity trading tips, trend and strategy guides. For anyone interested in finding the options available for wheat trends, I wish you would check out Agriculture.com. While I am working for them, I can trulyy tell you that the data they offer is both useful and complete from farmers and marketing firms available, as well as other information such as daily weather reports.. They are definitely worth following up on.
Legatus: “The whole CAGW movement is a movement to turn our entire economy from a free enterprise/capitalist economy to a command economy. “
AHA! It was those darn COMMUNISTS all along!
How do you respond to articles like this one about the US Navy’s concerns about the national security implications of climate change?
Are they part of the conspiracy?
Footagus says:
June 12, 2011 at 6:32 pm
How do you respond to articles like this one…
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Read the 2nd paragraph of the summary. Does anyone really need to respond to articles like the one you’ve cited — studies that blindly apply IPCC conclusions?
Sorry for not coming back earlier. I re-did the graph of corn corrected for inflation. I can also do wheat or any traded commodity. I’m just not sure how to post it here. I can email to anybody if I have an email.
Hi David,
If you post the graphs to a free site like flickr [ http://www.flickr.com/tour/10 ] you can then list a link.
Thanks for taking the time to adjust for inflation. It should be interesting to compare it to the graph above.
Hope this works, This is the link.
http://www.flickr.com/photos/64035064@N06/
Prices of wheat and corn is divided by the 1982-1984 base year CPI, so it’s in constant dollars of 1982-1984. Data doesn’t go further than July 31 1959.
Thanks David,
Works great.
Hi David,
Well the graph above is surprisingly close to your results and the peaks, until recently, appear to be inflation related.
If there is a climate signature in the price, its likely ENSO related and regional. Is it possible to run corn and wheat for just the US and Beef for the US and Australia over the same time frame?
I added a graph of live cattle to the same link. All futures (wheat, corn and live cattle) are from a US Exchange. Data for Australia is not readily available, although I would guess prices tend to follow each other, since these are easily exportable products (prices should tend towards a world level, taking into account transport prices). I agree with you, there is no climate signature in the prices. Recent spikes in corn and wheat could be link to the use of corn to produce ethanol, driving prices higher. The high prices of oil probably pushed prices of corn (and one of its substitute, wheat) higher.
Thanks David,
Well I have to agree with Willis, “… a look at the historical record shows that we’re doing pretty well, thank you very much.” But, I disagree about the scarcity part of the premise.
Thanks for taking the time to do the inflation adjusted charts!
The high prices of oil probably pushed prices of corn (and one of its substitute, wheat) higher.
That makes sense from the petrochemical fertilizer standpoint and the cost of fuel for farm equipment etc. What a mess if the Carbon tax inflates costs across the board. I wonder what idiot came up the the carbon tax idea.