Posted: Tue Jul 22, 2008 2:56 am Post subject: Re: US food groups plan hefty price rises
Quote:
Once the baby came and it was time to do some parenting I realized how hard it is to get some of that stuff done. Parenting done right is a full time job all by itself.
I've gone from having a full time job with a crazy commute (2 1/2-3 hrs each way, how environmentally friendly!) to being a stay at home mom with a baby. I couldn't agree with you more. I have less "free" time now than I did when I left my house at 3:50am and returned at 8:00pm each night. I am breastfeeding my son which also seems to take up a lot of time throughout the day, unlike just slamming down a quick bottle of formula. On that note, I'm sure we'll see a rise in breastfeeding as it becomes more difficult for mothers to buy formula, which is already expensive to begin with.
Posted: Tue Jul 22, 2008 3:15 am Post subject: Re: US food groups plan hefty price rises
Thanks for your comments Bruce. I also come from a farm family, and those in the extended family that are involved in industries directly related to farming. This general disrespect for farmers is upsetting to me as well.
As you say, farming today is about business. You have to make decisions based on economics otherwise you're broke in no time, and someone else will be farming your land. It is not that we cannot grow more food on our existing land. It is that there is no economic incentive.
We have spent the better part of the last twenty years straightening our fields, so that it makes it easier to farm. Sure we can plant more fruit trees and potatoes in those corners, but we have enough for our own use, and the price such seasonal produce brings hardly justifies the effort.
Also, it did not pay to fence the big hill for a couple of steers each year. If you want to run a cow and calf operation you have to be there all the time. That is the product of commodity prices that have been in decline in real terms for 200-years. We have only just put in a bottom in commodity prices in 1999-2001, so the increases we have seen have come from a very low base.
As you said, some land is just better off left to pasture. Not all of it can or should be farmed due to soil erosion. As for inorganic fertilizers there is a great deal of misconception about its sourse, its application and its alternatives. Basically, if you're making production decisions based on economics then you're looking for the best combination of input to output. That does not mean there are not alternatives. Just one that is the most cost effective. You either have to be a farmer or an agricultural economist to understand that. But then again if you're not a farmer it really does not concern you directly.
The Doha Round of WTO talks is failing precisely because developed nations can still produce an agricultural surplus cheaper and more efficiently than the developing world. And developing nations want to protect their farmers. Okay, fine, but that is even without a rise in real, farm prices that would encourage western farmers to increase production on existing land as well as bring marginal land into production. At the moment young farmers can earn more working off the farm, so why bother? Due to high grain prices cattle farming is barely profitable. That does not sound like a lack of food production to me? That sounds like prices for beef, chicken, hogs, etc. are still too low. And as the developing world wants higher prices to support their farmers then it looks like they are getting their wish.
The greatest worry seems to be that the ME is not going to sell us oil, so we cannot afford to grow food. Maybe, there may be physical shortages at some point, in which case we will transition to bio-fuels to grow food. You cannot compare the economics of gasoline and diesel with bio-fuels if there are no petroluem products. But that is beside the point in the immediate future. The immediate reality is that the ME is an importer of food to support their growing populations in what is essentially a semi-arid, desert like environment where there is a real lack of fresh water. We can survive longer without their oil then they can survive without food imports.
The reality is that food, fuel and fertilizer prices are all related to one another. As fuel becomes more expensive so does food and therefore there is more money to buy fertilizer. Those alternatives to inorganic nitrogen fertilizer made from natural gas become more economical. And food prices rise to the point that bio-fuels can compete with petroluem products.
No farmer with a 40-HP tractor with a 3-point hitch and a front-end loader that can run on bio-diesel is going to be farming by hand, by ox or by hiring farm labor. I do not want to be Malthusian, but domestic demand will be satisfied before it is exported to non-oil producing countries that have nothing of value to trade in return for our expensive food. That leads us to Jarrod Diamond's 'life-raft argument', but that is another story. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Jul 02, 2008 Posts: 436 Location: Espinho, Porto, Portugal
Posted: Tue Jul 22, 2008 8:49 am Post subject: Re: US food groups plan hefty price rises
So, in a nutshell, you are pointing out that food will get more expensive, therefore becoming a greater consumer of capital in personal and familiar finances. That, I believe, does not bode anything good for people and for companies within other branches of business. In an economy where most families are already too much indebted, a steep increase in pricing of food will hurt.
I agree that it can be fought, of course. The buying of non-precessed products helps a bit, but the price of these is more dependent of the increases that the large producers decide. An increase of 10% in corn will amount to, say, 1 or 2% in Corn Flakes. When you buy Corn Flakes, you mostly buy processing, shipping, packaging and marketing. That's why these increases are hurting more in developing countries, where foodstuffs are bought mostly raw. Buying raw will help for a while but will bring the same problems in the long run.
One of the greatest conquests the usage of fossil fuels has brought is the decrease of costs from feeding, releasing people's capital for other investments. That's where the idea of consumer goods for the masses came from, I guess. In nature, most of your energy in used in getting food. We broke that chain, and good for us we did so, but it's another unsustainable process we're on, and so in the future there will be a greater percentage of our income to get food. OK. More incentive for growing food. That's good. Will probably allow feeding more people, although with a greater cost per capita.
Problem is, we don't really know if there will be as much food as we need. First impressions (I'm not in the area of agriculture - I will be come next September, though! ) suggest there will not be. OK, so there will be incentives - ultimate score for free markets there, if it happens, but I am concerned there will be a physical limit to the amount of food produced without current practices.
As for GMOs and the rest, I will shut up. You're right, it's pretty much what the green party says. I don't know the truth about the percentage of crops that use GMOs, and what are the purposes they use them for. But I will argue that some of those crops are asking for too much, too quickly from the land, to eventually leave us with a less productive agriculture in the future, because of the wasting of soil capacity.
Posted: Tue Jul 22, 2008 9:01 am Post subject: Re: US food groups plan hefty price rises
Food, fuel and fertilizer will increase in real, inflation adjusted terms as a percentage of total income that will reduce discretionary income.
This will reverse a process that has been in place since the end of the second world war if not since 100-years (see chart). That is a direct result of post peak oil resource depletion, but also a function of growing populations; soil degradation, erosion and salination; falling fresh water tables; destruction of marine habitats and over-fishing; unsustainable foresty practices; climate change and other factors related to the above.
This process has very little to do with the debt loads of consumers or their ability to service those debts. This has to do with the physical limits to growth; the pace of technological and societal change; resource depletion and scarcity; as well as manmade inflation that has eroded our individual and collective ability to deal effectively with discontinuous change.
No one said the news had to be good. It is what it is. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Tue Jul 22, 2008 9:15 am Post subject: Re: US food groups plan hefty price rises
[quote="Snowrunner"][quote="bruce2288"]Snowrunner. I sure would send a PM,would enjoy conversing with you. I know a little about farming and not much about computers. I can't figure out how to PM on this site. Help
Posted: Tue Jul 22, 2008 9:46 am Post subject: Re: US food groups plan hefty price rises
mr Bill, Excellent posts. As you have pointed out ag products have not come close to keeping up with inflation. This narrowing of profit margins has led to farms getting larger to make a living. I probably have half a million net worth in my farming operation and could qualify for food stamps. There is an old saying that farmers live poor and die rich. Your reference to meat prices due to go up is spot on. Feed lots are losing money on fat cattle sent to market to the tune of a couple hundred dollars. Hog producers in the same boat. Either prices will rise to profitable levels or production will decline which will raise prices to that level. People in the US spend the smallest % of disponsible income on food than anywhere in the world. Last year for the first time more than 50% of food spending was dining out. Amazing!
Joined: Jul 02, 2008 Posts: 436 Location: Espinho, Porto, Portugal
Posted: Tue Jul 22, 2008 9:56 am Post subject: Re: US food groups plan hefty price rises
MrBill wrote:
Food, fuel and fertilizer will increase in real, inflation adjusted terms as a percentage of total income that will reduce discretionary income.
This will reverse a process that has been in place since the end of the second world war if not since 100-years (see chart). That is a direct result of post peak oil resource depletion, but also a function of growing populations; soil degradation, erosion and salination; falling fresh water tables; destruction of marine habitats and over-fishing; unsustainable foresty practices; climate change and other factors related to the above.
This process has very little to do with the debt loads of consumers or their ability to service those debts. This has to do with the physical limits to growth; the pace of technological and societal change; resource depletion and scarcity; as well as manmade inflation that has eroded our individual and collective ability to deal effectively with discontinuous change.
No one said the news had to be good. It is what it is.
Again, thank you. I keep mixing economy with finance. That sums up my idea, with evidence data to boot. Perfect.
You said a very interesting thing in an earlier post: that we have placed petroleum-based fertilizers very low in the value chain of food. That's the problem, the reason why food is getting more expensive: the raw material (oil) is getting more expensive because it's more scarce.
Here's a question: do you know of any study of the weight (in value) of petroleum in today's value chain for food production? I'd like to see that.
I'm off to search for info on the fertilizer alternatives to oil. Cheers!
Posted: Tue Jul 22, 2008 11:58 am Post subject: Re: US food groups plan hefty price rises
Byron100 wrote:
When I hear stories like this, I can only hope that the Age of the Corporation is drawing that much closer to its inevitable end. I would love nothing more than to see a huge, debilitating increase in food costs just so the people demand that we switch over to a socialistic economic system, nationalizing everything in sight.
This would be marked by an utter lack of advertising, very limited choices in supermarkets, very little "processed" foods and the virtual elimination of junk food. And oh, let's hope for an end to fast food as well...a world without McDonald's, Burger King, et al will be a far better place indeed.
It's going to be so much fun watching all those evil corporations commit hari kari on themselves....LOL.
You obviously have no idea how the world works. Thats ok, everyone was a dumbass at some point. _________________ "Battle not with monsters, lest ye become a monster, and if you gaze into the
Abyss, the Abyss gazes also into you."
Ammo at a gunfight is like bubblegum in grade school: If you havent brought enough for everyone, you're in trouble
Posted: Tue Jul 22, 2008 3:45 pm Post subject: Re: US food groups plan hefty price rises
Specop_007 wrote:
Byron100 wrote:
When I hear stories like this, I can only hope that the Age of the Corporation is drawing that much closer to its inevitable end. I would love nothing more than to see a huge, debilitating increase in food costs just so the people demand that we switch over to a socialistic economic system, nationalizing everything in sight.
This would be marked by an utter lack of advertising, very limited choices in supermarkets, very little "processed" foods and the virtual elimination of junk food. And oh, let's hope for an end to fast food as well...a world without McDonald's, Burger King, et al will be a far better place indeed.
It's going to be so much fun watching all those evil corporations commit hari kari on themselves....LOL.
You obviously have no idea how the world works. Thats ok, everyone was a dumbass at some point.
unfortunately some people remain dumb-asses for the rest of their lives!
Posted: Wed Jul 23, 2008 1:22 am Post subject: Re: US food groups plan hefty price rises
CarlosFerreira wrote:
Again, thank you. I keep mixing economy with finance. That sums up my idea, with evidence data to boot. Perfect.
You said a very interesting thing in an earlier post: that we have placed petroleum-based fertilizers very low in the value chain of food. That's the problem, the reason why food is getting more expensive: the raw material (oil) is getting more expensive because it's more scarce.
Here's a question: do you know of any study of the weight (in value) of petroleum in today's value chain for food production? I'd like to see that.
I'm off to search for info on the fertilizer alternatives to oil. Cheers!
The value of petroluem in our food production chain is one that most of our modern agriculture infrastructure and farming practices are built on cheap energy. Legacy investments that take time and are expensive to reverse. Especially, if you move to alternative fuels that are not, yet, commercially viable and in any case have a lower EROEI than petroluem products. But, for example, new tractors in Europe (CNH for example), already come from the factory ready to run on bio-diesel. The changes are coming. However, it will be change by a thousand cuts and not one killer solution.
We do not need GMO technology so that tomatos are square and fit in a box better for transport. Or other Frankenfoods. But scientists are working on crops that are resistant to pests, hardier, grow in wetter or dryer conditions or in salinated soils. Actually, crops that can actually soak up soil salts and leave the land less salinated. That would be a boon to some areas of the Golden Crescent.
Three separate investment groups are buying up hundreds of thousands of hectares in Russia and Kazakhstan. They will obviously need seeds that produce crops quite far north, and so must mature rather quickly, not unlike crops in N. Canada. And that are less dependent on irrigation. Obviously, we cannot afford to repeat the environmental mistakes made by the Soviet Union of trying to grow irrigated cotton in Kazakhstan, and in the process destroyed the marine ecosystem of the Caspian Sea that in turn ruined the livelihood of the fishermen in the region. Not too mention destroying the value-added caviar industry that relied on healthy sturgeon stocks.
I had a lot more, but I would have to look for them. There are also the organic sources of nitrogen, and crop rotation using legumes that fix nitrogen in the soil as well. Cheers. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Wed Jul 23, 2008 7:48 am Post subject: Re: US food groups plan hefty price rises
GMO's are not necessarily a bad thing, its a powerful new technology with the potential to solve quite afew of the food production problems raised in this thread.
A family member is involved in a charity that works on GM versions of staple crops in the developing world... apparently looks promising.
Given the relatively small size and low technology required for GM I think there's a good possibility of it helping us at least partly outta the hole we're in.
Joined: Sep 08, 2005 Posts: 749 Location: Atlanta, GA
Posted: Wed Jul 23, 2008 8:54 am Post subject: Re: US food groups plan hefty price rises
Specop_007 wrote:
Byron100 wrote:
When I hear stories like this, I can only hope that the Age of the Corporation is drawing that much closer to its inevitable end. I would love nothing more than to see a huge, debilitating increase in food costs just so the people demand that we switch over to a socialistic economic system, nationalizing everything in sight.
This would be marked by an utter lack of advertising, very limited choices in supermarkets, very little "processed" foods and the virtual elimination of junk food. And oh, let's hope for an end to fast food as well...a world without McDonald's, Burger King, et al will be a far better place indeed.
It's going to be so much fun watching all those evil corporations commit hari kari on themselves....LOL.
You obviously have no idea how the world works. Thats ok, everyone was a dumbass at some point.
And the whole human race is a dumbass for f*cking up this planet with such a f*cked up economic system.
Momma Nature and the law of *finite* resources will have the last laugh.
Bring on the die-off...we have it coming to us. _________________ Nowhere to run, nowhere to hide...
...and the meek shall inherit the Earth!
Joined: Jul 02, 2008 Posts: 436 Location: Espinho, Porto, Portugal
Posted: Wed Jul 23, 2008 9:03 am Post subject: Re: US food groups plan hefty price rises
Don't go around preaching die-off for tomorrow. People get around, and they find solutions. Read the posts in the thread: more expensive food = more incentives to produce food = more food produced. Just hope it's sustainable, and pop reduction does happen steadily and in a controlled way. _________________ Give anyone a lever long enough and they can change the world. It's unreliable levers that are the problem.
Joined: Sep 08, 2005 Posts: 749 Location: Atlanta, GA
Posted: Wed Jul 23, 2008 9:10 am Post subject: Re: US food groups plan hefty price rises
girlscout wrote:
Quote:
Once the baby came and it was time to do some parenting I realized how hard it is to get some of that stuff done. Parenting done right is a full time job all by itself.
I've gone from having a full time job with a crazy commute (2 1/2-3 hrs each way, how environmentally friendly!) to being a stay at home mom with a baby. I couldn't agree with you more. I have less "free" time now than I did when I left my house at 3:50am and returned at 8:00pm each night. I am breastfeeding my son which also seems to take up a lot of time throughout the day, unlike just slamming down a quick bottle of formula. On that note, I'm sure we'll see a rise in breastfeeding as it becomes more difficult for mothers to buy formula, which is already expensive to begin with.
You mean to tell me you used to spend 5-6 hours *each day* in a car, just to go to work? I tell you what, I'm awful glad that you've decided to become a full-time mom, that's for sure. I honestly do not see how you were able to do that and maintain some sense of sanity, I honestly don't.
And oh, going the breast-feeding route is a very, very good idea (round of applause here ) as baby formula has caused more problems for children then we can probably can even imagine. Nature intended for babies to be nursed on their mother's milk, instead of some alien concoction made in a factory. 100 years from now, people won't even conceive of feeding their babies anything other than breast milk...they'll look back at the history books and go, WTF...hehe. _________________ Nowhere to run, nowhere to hide...
...and the meek shall inherit the Earth!
Joined: Sep 08, 2005 Posts: 749 Location: Atlanta, GA
Posted: Wed Jul 23, 2008 9:26 am Post subject: Re: US food groups plan hefty price rises
CarlosFerreira wrote:
Don't go around preaching die-off for tomorrow. People get around, and they find solutions. Read the posts in the thread: more expensive food = more incentives to produce food = more food produced. Just hope it's sustainable, and pop reduction does happen steadily and in a controlled way.
More food produced in a world of climate change, soil depletion and dwindling liquid fuels...mmm, that is an interesting concept....and while you're at it, why don't you pass whatever you're smoking, as I'd sure as heck would like some...hehe.
And exactly how will people pay for food when the typical 8-5 office cubicle job goes the way of the Dodo? There's always the WWII-style Victory Gardens, of course, every little bit does help, for sure.
This thought of the "free market" (which is never free, by any means) solving our problems in the face of declining resources is a dead end, as most of us will find out in a few short years. In a very painful way, I might add.
If we're unable to reorganize our society in a collectivist fashion, so that we would at least have the chance to do things in a sustainable, controlled way, we really are headed for a massive, chaotic die-off. _________________ Nowhere to run, nowhere to hide...
...and the meek shall inherit the Earth!
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) suggest there will not be. OK, so there will be incentives - ultimate score for free markets there, if it happens, but I am concerned there will be a physical limit to the amount of food produced without current practices.
) as baby formula has caused more problems for children then we can probably can even imagine. Nature intended for babies to be nursed on their mother's milk, instead of some alien concoction made in a factory. 100 years from now, people won't even conceive of feeding their babies anything other than breast milk...they'll look back at the history books and go, WTF...hehe. 
