Biofuels not responsible for food crisis?

[Karl]

NEW DELHI: Speculative buying rather than diversion of food crops and oil seeds for biofuels has resulted in skyrocketing commodity prices, according to an analytical firm. F O Licht opined that reports blaming increased biofuels production for the present food grain crisis are exaggerated and the share of oil seeds and grains in the total global usage for biofuels is limited.

In 2007, 4.5% of global grain usage was to make fuel alcohol and 3.3% in 2006. However, once animal feed biofuel co-products are factored in, those figures fall to 3% for 2007 and 2.2% for 2006, F.O. Licht said.

The price increases in wheat, corn and oil seeds over the past year could be due to speculative buying and higher energy costs for agricultural production. Increases in prices were also due to “the often-repeated assumption that the expanding biofuels sector was boosting these markets,” F.O. Licht said. However, the report added the influence of biodiesel on the global vegetable oil market was more significant, with some 5.9% of total supplies used to make biodiesel, up from 3.7% in 2006.

Source: Biofuels not responsible for food crisis: report

[screener]

I expect that some of the concern comes from the higher levels of crop produced fuels projected by some governments. Speculators definitely leaped on the bandwagon driving prices further. The countries that are often exporters of grains who in the last six months threw tariffs on exports or simply shut them down had a bigger impact.

Climate change variations are having big impacts on food prices, and the other thing that has happened is that farmers who have been steadily squeezed out of the profit picture by high input costs and low returns, at least those still in farming, are struggling with getting crops in the ground.

[Rog]

I don't suppose they are solely responsible, but they're certainly not helping matters.

[Cricket Tragic]

The current “food crisis” has a number of contributing factors. These are: increased demand for food, particularly in India and China, recent droughts in the southern Hemisphere and a increased corn production for ethanol in the US. Biofuels are only part of the equation and quite a small part. However, what has occurred is that biofuels, by reducing the amount of corn available for animal feed, have soaked up any excess course grain availability.

The net result of all these factors is upward pressure on food grain prices. This in turn has seen some countries ban the export of food and a degree of hoarding by both countries and grain traders. There is actually grain in the system, it is just not getting to buyers. A better crop this year will take a lot of the pressure off, but it is highly likely that grain availability will be tight for some time to come and prices will stay elevated.

Screener, the “climate change variations” having an impact on food prices are normally called droughts and are quite normal. The climate change concern is that droughts might become more widespread into the future. At present prices have increased more than input costs (at least where I live) meaning farmers are more financially sustainable now than they have been recently – provided there is not another drought.

[Windguy]

There is also the major concern of farming techniques in third world countries that is increasing desolation of the soil leading to plants dying before reaching maturity. So even though our demand has gone up, our supply is going in reverse.

A plan of attack would be to stop subsidising farmers, and when they can't be cost effective, companies will move in with new technology and techniques that will ensure production.

Let biofuel stand on it's own two feet rather than being subsidised for production and you'll find biofuel to food ratio will go back down until we become more efficient. Somehow we need to do something now if oil keeps on going up otherwise we'll all be fermenting our corn flakes to get to work every morning.

[spadlet]

Originally Posted by Windguy

Somehow we need to do something now if oil keeps on going up otherwise we'll all be fermenting our corn flakes to get to work every morning.

Like live close enough to be able to cycle to work?

[screener]

Originally Posted by Cricket Tragic

Screener, the “climate change variations” having an impact on food prices are normally called droughts and are quite normal. The climate change concern is that droughts might become more widespread into the future. At present prices have increased more than input costs (at least where I live) meaning farmers are more financially sustainable now than they have been recently – provided there is not another drought.

Cricket tragic, climate change variations do happen, and the level that we have always considered to be normal is normal. What the UN is foreseeing is a greater number of climate or weather variation, and to a greater degree. We aren't just talking about drought, there is also frost, rainfall, snow, hail, and wind damage. Farmers that have been squeezed by the high input costs and low prices, particularily grain growers, now also have to worry about not just the weather but worse weather.

When you say that prices have increased more than input costs where you live, what crops are you talking about, over what span of time, and do you mean only if this crop doesn't have problems with the many weather variables? then I could agree with that.

[Windguy]

Originally Posted by spadlet

Like live close enough to be able to cycle to work?

Impossible for me, but how many people do you see still drive to the shop that is a 10 minute walk away? Our car addiction will stay, and the moderately rich will keep on driving their V8's to work five minutes away whilst the poor will have to eventually bike it for an hour up and an hour back just to get to work. If we cut out all V8's and replaced them with 4 donks, fuel might be 20 cents cheaper. USA's greed and unlevel taxing is what is driving european petrol prices through the roof, all we needed was China to get on board to skyrocket the oil price.

House prices are actually related to distance to work and fuel cost (as well as others).

Oil prices are now driving up food prices creating that double whammy. Our food crisis by the media's interpretation will literally scare the food prices higher.

OPEC I believe knows now there is a (maybe to us, or close to never) major change in the wind (they believe we all will hop in a hydrogen/electric vehicle incredibly soon), so they are now unwilling to help their long faithful customers with a production increase, openly stating fuel prices are going to hit 200 dollars. They are going to squeeze us while they can as they will have nothing once their only resource runs out.

[spadlet]

Originally Posted by Windguy

Impossible for me, but how many people do you see still drive to the shop that is a 10 minute walk away?

I live near the city centre and at the moment the roads are a nightmare with all of the layout changes they're making, a trip to the nearest shop by car would take people alot longer than walking (what with the unexpected no entry signs and not having a clue what the latest road layout is), plus the shop is closer than the car park

Out of town shopping centres seem crazy to me though. Why drive to the middle of nowhere, as all the staff must have to do, to buy htings they could easily sell in town? In fact, alot of them do have stores in town.

[Wobs]

Originally Posted by spadlet

I live near the city centre and at the moment the roads are a nightmare with all of the layout changes they're making, a trip to the nearest shop by car would take people alot longer than walking (what with the unexpected no entry signs and not having a clue what the latest road layout is), plus the shop is closer than the car park

Out of town shopping centres seem crazy to me though. Why drive to the middle of nowhere, as all the staff must have to do, to buy htings they could easily sell in town? In fact, alot of them do have stores in town.

Ah yes, Sheffield. They always seem to changing the layout of the roads, just to confuse people. When we went for a gig recently, we were confident we knew the way, only to find that we ended up down a whole series of one way systems. A sly mistress that she is.

Meadowhall out of town shopping centre (mall) is actually one of the better ones transport-wise, as they have a bus station, tram stop, and train station. If I'm feeling masocistic enough, I can get on a train in Hull and go direct to that sterile environment. Fortunately not had much call to do so though.

Much prefer to go around proper towns with lots of independent shops.