Saturday, March 29, 2008

The Age of the Food Economy.

Google "Food Riots" and get to see the stories coming in from Egypt, Morocco, Senegal, Cameroon, Thailand, the Philippines, Burkina Faso, Haiti, and many other countries as people scramble to find food for their families. Commodity prices have risen 25-50% around the world. Each year more grain crops have been diverted into ethanol production and the practice has finally hit the tipping point: people are starving and food is being sold to the highest bidder. The highest bidder, of course, is the fuel production industry where a pound of corn can be converted to fuel with a 50% profit margin.

In the past 10 years we have all been exposed to the vegetarian idea that it takes 8 pounds of grain to produce 1 pound of meat. Here is a new and more disturbing idea: it takes 450 pounds of corn to make 1 gallon of ethanol. If eating meat for a day means that 7 other people go hungry that day, then using 1 gallon of ethanol means that 449 people will go hungry that day for EVERY GALLON OF FUEL USED. Use 3 gallons....1347 people go hungry....Fill up an SUV tank....near 9000 people go to bed with an empty stomach. Even if you only fill up with 10% Ethanol Blend (10EB), you directly contribute to 900 people going hungry.

American know we need to move away from petroleum products and we have invested billions of dollars trying to do that, but ethanol is like many other "Green" ideas I have seen recently....FAKE GREEN. I seen the beginning of this movement and made a very accurate prediction more than 20 years ago, "People will starve to keep American cars on the road." When I first predicted that many of my Peak Oil friends laughed it off. 20 years ago no one thought that it would ever be worth turning corn into was just too expensive to even think about. Yet, here we are....the fuel industry is actually willing to pay MORE for corn than the food industry can afford.

Ethanol, and most the the rest of the "Green" movement is powered by the same motivation that lead to Love Canal, Hanford, strip-mining and deforestation...GREED. BP isn't getting on the Ethanol band-wagon because they want to "do the right thing." BP is making money. Toyota isn't producing hybrid cars because it wants to save the Earth, they are doing it to make money.

And these companies are making money like crazy....billions of dollars in profits, driven by GREED with little thought to their impact to future generations. It doesn't matter what 3rd world population suffers starvation, or mercury poisoning, or birth defects as long as the stock-holders get a good return on their investment.

The problems with this wild GREED are just starting to come to light: people in poor nations are starving. American farmers have turned away from traditional crops to grow for higher profits. The USA now imports 50% of our food crops from other countries and that number is expected to rise to 90% by 2012. That prediction may not work out though if the people growing all those fresh fruits and veggies for us can't afford wheat, corn or rice for themselves. The lag time between grain shortages in Mexico, Chile, and China will be 1 to 2 years at the most, then we will see fresh produce skyrocket at the supermarket. 50% increase in the price of corn will be a small thing compared to 200-300% increases in the price of fresh foods we depend on in the US.

When reading the news of food shortages and price increases in other countries, keep in mind that those increases directly affect the wholesale cost of growing food to send back to us and by the time our food finally gets to the market the cost is going to be astronomical.

I am thinking of growing a little more in my garden this year and much more next year. I don't know when fresh foods are going to become un-affordable but I can guarantee that it is just a matter of time.


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