Last Saturday at the Stoke Newington Farmer’s Market, Tim and I bought our usual 12 eggs. Unusually, however, we jumped at the price: £4/dozen, up a £1 since last week. The reason? The rising cost of chicken feed, particularly wheat.
The crisis comes after two successive years of disastrous wheat harvests, which saw production fall from 624m to 600m tonnes, according to the United Nations’ Food and Agriculture Organisation (FAO).
Experts blame climate change as heatwaves caused a slump in harvests last year in eastern Europe, Canada, Morocco and Australia, all big wheat producers.
Booming populations and a switch to a meat-rich diet in the developing world also mean that about 110m tons of the world’s annual wheat crop is being diverted to feed livestock.
via The Times
In the U.S., all wheat stocks are down 17% from last year according to this week’s USDA Grain Stocks Report.
I’ve read about the wheat problems in developing countries but didn’t take it to heart until it impacted my grocery bill. It makes me wonder: what other global crises are happening right under my nose? I need to start paying more attention.
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Wow. Once again I’m literally dumbfounded that the mainstream media, even across the pond, don’t understand the market forces at work.
“Though shortages are often blamed on the use of land for biofuel crops, the main biofuel cereal crop is maize, not wheat.”
Hmm…if I’m a wheat farmer, and I realize that the U.S. is going to impose a ridiculous mandate to produce unreasonable amounts of ethanol, and I realize that this will directly push up the demand for corn, well, I’m gonna grow corn instead of wheat. You can see how this affects the amount of wheat grown.
I hardly call changing wheat supplies and prices a global crisis. The crisis is that policies are implemented without any fundamental understanding of the economics that underpin said policies. Government fiat always interferes with the use of real assets, often with negative unforeseen consequences.
Of course, given this “crisis” in agricultural commodities and food prices, governments will feel emboldened to do something about *that* instead of, oh, I don’t know, stopping their efforts to decide for the rest of us what the best way to produce energy is.