As
crude oil reaches record
highs of $110 a barrel, the connection between the cost of food and the
rise in energy prices can no longer be ignored. In a recent
statement, Josette Sheeran, executive director of the UN's World Food
Program, said the global economy had created "a perfect storm for the
world's hungry, caused by high oil and food prices and low food stocks."
Sheeran continues, “Higher food prices will increase social unrest in a number
of countries which are sensitive to inflationary pressures and are
import-dependent. We will see a repeat of the riots we have already reported on
the streets such as we have seen in Burkina Faso, Cameroon and Senegal."

Sheeran
notes that food prices have been aggressively increasing to historic highs
and cites four major drivers for this:

1.
The rise in oil and energy prices which affect the entire value chain of food
production from fertilizer to harvesting to storage and delivering and access
to water;

2.
The economic boom in nations such as India and China, creating increased demand
for all commodities including food and forcing China, which was a major food
exporter just a little more than one year ago, to now being an importer of
food;

3.
Increasingly harsh and frequent climatic shocks like hurricanes, floods and
drought, have made for some bad harvests in particular regions like Australia
and regions of Africa;

4.
The shift to increased biofuel production that has diverted hundreds of
millions of metric tons of agricultural output out of the food chain, and has
caused food prices to be set at fuel price levels in many places, including,
for example, palm oil in Africa which is now being priced out of household
reach because it is being set at fuel prices as a biofuel addition.

On
the energy front, Sheeran's claim is supported by recent reports coming from farms
across the globe. Although farmers appear to enjoy record commodity prices, the
recent spikes in the cost of fertilizer
and fuel are eroding gains. Not only has the price
of nitrogen fertilizer risen 113% since 2000, but also potash has risen
from $225 a ton to nearly $500 a ton and increasingly scarce phosphate has gone
from $312 to between $800 and $900 a ton this year. The ingredients of these
fertilizers are often imported to the United States from other countries
and these resources are mined and processed using markedly energy-intensive processes
that consume diesel and natural gas.

In
other news, the world’s
largest poultry processor closed a U.S.
processing plant-cutting 1, 100 jobs. The processor blames record feed prices
and U.S.
ethanol policy for the current industry-wide crisis. Even if you are a
vegetarian, the implication of this news is still hard to hear, as it is illustrates
the fact that agribusiness is designed to grow food in a way that creates high
profit. Once the profit margin is challenged the corporate producers of food
may simply quit the job of growing food.

These
trends should be clear indicators to all of us to reduce consumption of
non-renewable resources and begin to support those that are willing and capable
of producing food, fuel, and organic fertilizer close to where we live. Click here to see if there is a CSA or farm in
your area.