Recently, a leaked report from a United Nations scientific panel had some bad news for the world and consumers in particular. The scientists are predicting that climate change, coupled with an increase in demand, have set food prices on an upward trajectory for decades to come.
Readers of this column should not be surprised. Over the last several years I have written extensively on the subject of weather, climate change and the demographic shift to higher consumption of food within the emerging markets. We have all felt the impact in our pocket books every week at the supermarket. What is recent and most alarming in the panel’s preliminary findings is the extent by which food production will shrink and demand rise.
Through this century, the United Nations Intergovernmental Panel on Climate Change, the world’s foremost authority on the subject (and winner of the 2007 Nobel Peace Prize), expects food production will decline by 2% per decade. They blame climate change for the decline.
They forecast that higher temperatures due to greenhouse gases will reduce crop production in tropical climates while increasing production in cooler zones. Back in 2007, when the panel’s last report was released, scientists believed that any reduction in production in the southern hemisphere would be nullified by increased production in the Northern parts of the globe. That is no longer the case.
At the same time, consumption demand for food is predicted to rise by as much as 14% each decade. This increase in demand has two parts. The world population is expected to grow from 7.2 billion today to 9.6 billion souls by 2050. At the same time, the on-going change in the economic fortunes of those living in the lesser developed parts of the world will increase demand for the quantity and quality of all sorts of food.
Places like China, India and other emerging markets, where much of the world’s population lives, have seen a drastic and welcome increase in living standards, wages and consumption habits. For the first time ever, peasants-turned -factory workers and shop keepers can afford to enrich their diets with pork, beef, chicken, and various dairy products. As salaries increase further so will the demand for food.
Over the last few years, I have pointed out the impact of weather (drought, floods, hurricanes, etc.) in our own country on the prices of various food staples such as corn, wheat, sugar, beef and other commodities. Worldwide, we have witnessed huge spikes in all sorts of crop prices from coffee to cocoa. And don’t forget that crop shortages and rising prices have already had an immediate and negative impact on the populations and politics of various countries.
Food riots in Haiti, Bangladesh, and Egypt and in various countries in Southeast Asia have occurred with depressing frequency. Recently the scarcity of food has had regional implications, most notably in the Middle East. Discontent was as much about food as it was about autocratic rulers during the Arab Spring. In 2010, droughts in Russia, Ukraine, China and Argentina and torrential storms in Canada, Australia and Brazil — all major wheat and grain producers — considerably diminished global crops, driving commodity prices up. The Middle East was already dealing with internal social, economic and climatic tensions, and the 2010 global food crisis helped drive it over the edge.
The most obvious answer to combatting this coming food scarcity is to bring more land into agricultural production. In my next column, we will take a look at what is happening in the United States in response to this challenge and what players will stand to benefit the most by this trend.