I don’t know if you read the newspaper. I do. I read the Globe and Mail. Not so much because I have chosen it over other sources of news, but more because it magically appears on the lunchroom table every day. It’s like the news fairy visits before I come in and leaves me some information in case I somehow missed something in my RSS feeds on my computer. Besides, sometimes it’s fun to actually hold paper, read from it and turn real pages – it’s like reliving memories from my childhood.
On Wednesday, I was reading said paper when a headline grabbed my attention – “Analysts warn that anything less than a glowing report this Thursday on the outlook of this years [corn] crop is likely to send global food prices into a new period of volatility.” I know what you’re thinking – the article would only be slightly longer than that headline – but if you’ve been paying attention to the last few blurbs we’ve sent out from World Relief Canada offices, then you know that food prices are an area of serious concern. So I read the whole article.
June 9, 2011 U.S. Report Impacts Global Food Prices
The concern is based on a report from the US that will shed light on the status of global food stocks and forecast supply and demand for the coming months. Corn from the US feed 2/3 of the global market, so even a dip in output could have huge ramifications. The weather has been less than helpful in the States, with rain and flooding causing havoc in some of the growing regions. So everyone was waiting for the crop report on Thursday.
If you are like me, you might be wondering why a corn crop report is so important. As a kid, I would have gladly donated any corn that my mother put on my plate to anyone. News of a corn shortage would have been a welcome report to my palate. But I was just a child, and besides, we always had plenty of corn. But food prices around the world are sitting at record highs. There is a drought in Britain, Germany and France (Europe’s largest wheat producers) that is threatening this year’s wheat crop, and that is on the heels of the fact that since the second half of last year, global wheat prices have more than doubled according to the World Bank. The Cereal Price Index has soared a shocking 69 percent from May 2010 to May 2011. We are at the point where it is safe to say that we could have a crisis on our hands very soon. Given that, this report had become, understandably, a matter of some import for many, many people.
So, Thursday came and the report was delivered. The gist of it was captured in the first line of a news story from the Dow Jones Newswire: “U.S. corn futures soared to an all time high Thursday.” The worst fears were realized. The U.S. Department of Agriculture cut by 22% its domestic inventory estimate for the coming year. Prices rocketed up to $7.93/bushel – the highest price ever in the 163 year history of the Chicago Board of Trade.
With Prices Spiking, G20 Promises Response
The U.N. Food and Agriculture Organization says food prices are higher than they have been in the last 20 years, surpassing the 2008 price spike that set off food riots in cities around the world.
At this year’s G20 meetings, the leaders vowed to assemble agricultural ministers to tackle market volatility – and that meeting is scheduled to happen in 2 weeks, so the timing of this report couldn’t be more apropos. Recently, Sophia Murphy, a B.C. based senior advisor for the Institute of Agricultural Trade Policy, voiced her concern this way, “If countries are being asked to rely on international markets for food security, they need to have some security that food is available.” Most of the governments’ mechanisms to deal with these issues are about money, and this worries her for obvious reasons. “That’s all very well if there’s something to buy, but you can’t use money when the shelves are empty.”
Food Security Projects More Important Than Ever
At World Relief Canada we tend to agree with her assessment. Food scarcity, supply and demand issues, government interventions, and competing market forces are complex matters that deserve more time and ink than a simple update can provide, but at the end of the day it really doesn’t matter how much money there is – you can’t buy something that isn’t there. That is the crux of food security and the basis of our agricultural projects. We cannot do anything about the amount of corn that the US has in reserves, but we can directly affect the amount of food that small farmers and their families have in the areas where we work. Teaching them better farming techniques (and how to use more efficient tools) ensures better yields for their crops. And that means having enough food for their children and more for their community. That is sustainable. That is working. And that is what we are doing together.
Like you, we will continue to pray for farmers – everywhere in the world. Food prices affect us all. For some of us, it means higher prices at the supermarket. For others, it means acute hunger and malnutrition. Either way, we are all impacted, and it will take all of us – working and praying together – to make a difference.
Thank you for continuing to partner with us.
