News

High Food Prices Expected to Climb Further

UN world food price index hit a high in January

One of the key factors pushing up food prices is the growing use of food crops to produce fuel.
One of the key factors pushing up food prices is the growing use of food crops to produce fuel.

World food prices remain near record-high levels, according to the latest UN world food price index, and they're expected to climb even higher.

The index hit a record in January and has not come down much since.

Today's high prices come less than three years after the index hit its previous peak in 2008.

"I'm not surprised at all," says Shenggen Fan, head of the International Food Policy Research Institute. "The factors that pushed food prices higher remain the same."

Food for fuel

He says one of the biggest factors pushing up food prices is the growing use of food crops to produce fuel.

In just the last few years, ethanol production from maize has skyrocketed in the U.S. In Brazil, it's sugar cane. And in Europe, fields of canola are sprouting up to produce biodiesel.

That means food and energy prices are more closely linked today than they were before the biofuels boom, says Iowa State University economist Dermot Hayes.

But that's just one way food and fuel prices are connected, he adds, "the second one being the increase in transportation costs."

Transporting food from field to fork costs more when fuel prices are high. And it also costs more to run the trucks, tractors and machinery to produce it.

The cost of prosperity

Meanwhile, the demand for food is growing where prosperity is increasing and diets are changing, especially in emerging economies such as China, India and Brazil.

"They deserve a good life. So they want to eat more meat, more diversified food," Fan says. "And that all demands more feed, more grains."

Fan notes that it takes several kilograms of grain to produce each kilogram of meat.

The tremendous global growth in the demand for grains means farmers in the major producing countries need to produce ever-larger harvests.

Bad weather

But last year the weather did not cooperate.

"The midwestern part of the U.S. had too much rain," Hayes says, "and just about everywhere else in the world had too little rain. In particular, Eastern Europe had too little rain. It caused both Russia and Ukraine to literally cut off exports of wheat."

Russia and Ukraine's export ban started prices climbing last July.

Eastern Europe is doing better this year, but the midwestern U.S. is not, Hayes says.

"We're really dry right now, so it's the opposite of last year," he says. "But I personally am getting more and more concerned about the size of the U.S. crop, both for corn and soybeans. So, potentially, things could evolve next year as they did last year and we could see higher prices next year as well."

Hayes says high prices are actually good news for farmers. They will encourage farmers around the world to produce more.

The question is whether they will produce enough to keep up with the ever-growing demand, and if weather extremes brought on by climate change will make it harder for them to do so.

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs