The Price of Feed is Soaring, and the Price of Food Will Follow

And what do you think the reaction is going to be? A reduction in ethanol or a reduction in the US consumption of meat? Farmers throughout the country face a Fourth of July where big decisions are going to be made--cut costs or go under.

“This used to be 50 bucks for the full barrel,” [David] Hale said, pointing to a barrel of chicken feed.

And now?

“Seventy-five dollars - a fifty-percent increase," he said.

“All these cattle will eat 40 lbs. of feed a day and it went from two cents to nine cents a pound for that feed, that's a big big difference," [Steve] Foglesong said.

Corn prices are at the highest levels they’ve ever been; and meat farmers are hit especially hard.

It takes 2.6 lbs of corn to make one pound of beef or chicken. It takes 3.6 lbs. of corn to make a single pound of pork.

“Chicken feed is supposed to be an idiom for 'cheap,' right?" Hale said.

But not any more. The mountains of corn it takes to feed Hale’s chickens and Foglesong’s cows are getting more expensive, because of increased domestic demand from ethanol plants, higher overseas demand thanks to a weak dollar, increased transportation costs - and let’s not forget tight supplies.

As feed prices soar, the question over how much ethanol we are going to manufacture in this country becomes a hot topic for discussion. Before Iowa came along in the Presidential primary process, you heard a lot of good things--now, you hear virtual silence. The scarcity of materials and the cost of making it make this a bad year for ethanol.

The recent floods in the Midwest wiped out an estimated two million acres of corn and soybean crops.

“The only thing a guy's got the opportunity to do is cut back on the number of cows he's carryin', because he doesn't have any feed for 'em,” Foglesong said. “So those cows go to market."

And that means sticker shock at the grocery stores, as farmers fold under pressure of high feed prices.

Now, if people are already facing a dilemma between food and gas for their car, how much do you want to bet they're going to cut down on expensive foods--and that means red meat and other high cost staples of the dinner table.

Tuesday morning quick hits

Survivors pulled from wreckage in China after being trapped for a week 164 hours after the magnitude 7.9 (some reports say 8.0) quake rocked southwest China, a 56-year-old man was pulled from a manganese mine where he had been trapped, and almost simultaneously a 61 year old woman was being rescued from the rubble of a collapsed dormitory. The man was uninjured but suffering from dehydration, hypoxia and renal insufficiency, and the woman had a couple of broken bones, but both were expected to make full physical recoveries.

This is why you should never deign to rig justice Military lawyers representing Khalid Sheik Mohamed and four of his alleged co-conspirators are arguing that charges against their clients should be dropped because the case is now tainted, after the tribunals' legal adviser, Air Force Brigadier General Thomas Hartmann, meddled in the the case inappropriately. Hartmann was previously removed from the Hamdan case for not merely lacking neutrality but for actively interfering in the case. It sounds like it's time that Hartmann be "asked" to retire, or at least removed from the tribunals process. If he won't retire, let him finish out his career running the JAG office at Minot. And Congress? No more stars for this bastard, either.

As food prices climb, food stamp recipients feel the pinch The poor among us who rely on food stamps for their basic sustenance needs are struggling to make ends meet as food prices spiral up but the amount of monthly benefit does not track with food prices. The benefit amount adjusts once per year, in October, then remains static until the next year. People are feeling the pinch so acutely, and are so hungry by the end of the month that stores in low income areas that serve disadvantaged people have started opening at midnight on the first of the month, so people who haven't had a real meal in several days are able to buy food as soon as their Department of Agriculture cards reload automatically on the first of the month. Dennis Kladis, who owns One Stop Food & Liquors on Chicago's south side started opening his store at midnight once a month several months ago in order to give desperate families a chance to buy food as soon as possible. "I'm telling you, by the end of the month they're just dying to get back to the first," said Kladis. "Obviously, they are struggling to get through the month."

Fossella won't run for re-election Two people close to the beleaguered congressman who was arrested three weeks ago for driving under the influence say the only republican in New York Cities congressional delegation will announce on Tuesday that he has decided not to seek a seventh term. It's too bad Vito couldn't keep his Id in check, because the district he represents is solidly republican and pigs will be kosher before the NY 13 elects a Democrat, but then I said something similar about the LA 06 and MS 01, too, soooo... I say it's too bad he couldn't keep his fly zipped because he has been a very effective voice for the victims of the terrorist attacks of September 11, and when people started getting sick after working at the scene, he started pressing the congress to help them with medical care. Since the odds of a Democrat taking the seat are slim and none, I almost wish he wasn't going anywhere, because being an effective voice for the victims of that tragedy goes a long ways, no matter where on the political spectrum that voice falls.

As South Africa succumbs to xenophobia, immigrants become targets of violence for poor South Africans who take out their frustrations and insecurities on poor immigrants who migrate to the country seeking a better life. At least 22 people had been killed by Monday in the unrelenting mayhem, the police said, but the number of fatalities is only part of the story. Thousands of immigrants have been scattered from their tumbledown homes. They now crowd the police stations and community centers of Johannesburg, some with the few possessions they could carry before mobs ransacked their hovels, most with nothing but the clothes they wore as they escaped...“They came at night, trying to kill us, with people pointing out, ‘this one is a foreigner and this one is not,’ ” said Charles Mannyike, 28, an immigrant from Mozambique. “It was a very cruel and ugly hatred.”

Pentagon Begins Assessing Impact of Rising Food Prices

In light of growing unrest around the world over rising food prices, the chairman of the Joint Chiefs of Staff is asking for a closer look at the crisis and its security implications, a U.S. military official said Monday.

Adm. Michael Mullen has instructed his staff to investigate the matter so his office can be prepared in the event the crisis becomes a defense issue, the source said.

It's the first time the highest levels of the U.S. military have become involved in the issue.

The crisis first gained international attention when riots broke out several weeks ago in Haiti and Egypt over the high cost of food.

The U.S. military official emphasized that there is "no military planning" and no intention of getting U.S. troops involved in the crisis.

The source acknowledged there is little the U.S. military can do, but said, "This is an area that has certainly got our attention now."

Even as they look into the matter, Mullen's staffers are not expected to come up with any formal recommendations to the chairman.

The rising cost of bread in Egypt has led to government crackdowns

Police clashed with protesters in the Nile Delta city of Mahalla on Sunday, firing tear gas and arresting dozens after angry residents demanding an end to price hikes and soaring inflation set two schools ablaze and burnt tyres along the city's railway.

Egypt is the world's biggest consumer of bread, with each Egyptian eating 400 grams of bread a day. That compares with France - the land of the baguette - where the figure is only 130g per day.

The shortages have forced bakers and consumers on to the black market. According to the state-owned daily Al-Ahram, 12,000 people have been detained in raids across the country in recent days and they are all to face justice over selling flour on the black market.

A 100 kilogram sack of subsidised flour is worth about $3.14. The same sack costs $377 on the black market.

The government is desperately scrambling to contain the crisis.

On Friday the authorities announced plans to suspend rice exports for six months from April and the commerce ministry said cement exports will also be frozen over the same period in an attempt to combat price rises.

The Pentagon views what is happening in Egypt as a crisis:

Egypt could be one area of concern for the Pentagon because unrest there has continued sporadically over food prices, two senior U.S. military officials have said.

Cairo is a major ally of Washington in the global war on terror, and the United States does not want the unrest there to grow, possibly risking the regime of President Hosni Mubarak.

Other countries throughout the developing world have been hit hard by the rise of food prices:

There also have been riots over high food costs in Haiti, sparking concern about another wave of illegal immigration to the United States.

The rising costs and chaotic riots have prompted several countries to stop exporting wheat and rice, and the U.N. World Food Program has cut food rations to millions of displaced people in Sudan's Darfur region because so many food convoys have been hijacked.

In other areas of the Middle East, bread is a symbolic basic staple of life, and as prices rise, resentment of wasteful government spending begins to grow:

In Yemen, where food riots broke out in recent months, the answer to nearly every question we asked about food elicited emotions ranging from fear of malnutrition to anger over the exorbitant rise in prices.

The cost of one round of traditional flat bread, roughly two slices of bread in the United States, has risen sharply, from about 10 Yemeni rials (about 2.5 cents) to 20 rials in the local bakeries. This may not sound like much to an American who’s used to paying $3.50 or more for a loaf of bread, but it is to a Yemeni – and to many others in the developing world for whom food expenditures can represent 60 to 80 percent of a family’s spending.

Few of the Yemenis we met, if any, understand why food prices have risen so sharply. Even Americans awash in information are as confused and confounded as Yemenis. More than one person made a connection between higher food prices and the ongoing construction of what they call the “President’s Mosque” – a mosque named after the country’s leader and reported to cost $65 million. (They had no proof, which, of course, seems an unnecessary part of any discussion about supposed government excess.)

In Yemen, when the price of bread rises, so does anger and resentment of the government. Elsewhere, because of government subsidies, the price of bread is stable, contributing to different kinds of headaches.

In Iran, inflation is now up to an annual rate of 18 percent; earlier this month, that cost the economic minister his job. The bakers get government flour and are allowed to charge only a certain low rate for the bread they sell.

[SNIP]

The menu that people hit by this immediate crisis are using is fairly simple: flour and rice, even as these staples double or quadruple in price; cakes in Haiti made largely of mud, choked down in a desperate attempt to fill one’s belly; bread baked by the military in Egypt. But from our travels, it seems that the menu items that helped create the current crisis are more complex, processed and partially hydrogenated than these modest items.

Food corporations have learned how to enter the developing world. Few of the families we met could afford a week’s worth of a processed food item at one time, so the global food companies make their wares more affordable by offering them in single-serving packets. In Manila, individual portions of “foods” such as imitation-cheese spreads, chips and spiced rice dishes are much like the convenience packs sold in the United States. Highly processed foods are making inroads into the diets of the developing world, and with that comes dependence.

In fact, there are many organizations throughout the world who are expressing concern about the rise in food prices:

UN staff in Jordan also went on strike for a day this week to demand a pay rise in the face of a 50% hike in prices, while Asian countries such as Cambodia, China, Vietnam, India and Pakistan have curbed rice exports to ensure supplies for their own residents.

Officials in the Philippines have warned that people hoarding rice could face economic sabotage charges. A moratorium is being considered on converting agricultural land for housing or golf courses, while fast-food outlets are being pressed to offer half-portions of rice.

The UN Food and Agriculture Organisation says rice production should rise by 12m tonnes, or 1.8%, this year, which would help ease the pressure. It expects "sizable" increases in all the major Asian rice producing countries, especially Bangladesh, China, India, Indonesia, Burma, the Philippines and Thailand.

Holmes is the latest senior figure to warn the world is facing a worsening food crisis. Josette Sheeran, director of the UN World Food Programme, said last month: "We are seeing a new face of hunger. We are seeing more urban hunger than ever before. We are seeing food on the shelves but people being unable to afford it."

The programme has launched an appeal to boost its aid budget from $2.9bn to $3.4bn (£1.5bn to £1.7bn) to meet higher prices, which officials say are jeopardising the programme's ability to continue feeding 73 million people worldwide.

Robert Zoellick, president of the World Bank, said "many more people will suffer and starve" unless the US, Europe, Japan and other rich countries provide funds. He said prices of all staple food had risen 80% in three years, and that 33 countries faced unrest because of the price rises.

In the UK, Professor John Beddington, the new chief scientific adviser to the government, used his first speech last month to warn the effects of the food crisis would bite more quickly than climate change. He said the agriculture industry needed to double its food production, using less water than today.

He said the prospect of food shortages over the next 20 years was so acute it had to be tackled immediately: "Climate change is a real issue and is rightly being dealt with by major global investment. However, I am concerned there is another major issue along a similar time-scale - that of food and energy security."

The possibility that the Pentagon might need to deploy US troops to prop up various "friendly" regimes throughout the world hinges on whether such a move would be feasible. The strain on US troops because of the wars in Afghanistan and Iraq have left the Pentagon less likely to resort to full scale invasions.

Any plan to invade a country or countries due to instability would likely resemble the plans revealed by General Wesley Clark:

GEN. WESLEY CLARK: I knew why, because I had been through the Pentagon right after 9/11. About ten days after 9/11, I went through the Pentagon and I saw Secretary Rumsfeld and Deputy Secretary Wolfowitz. I went downstairs just to say hello to some of the people on the Joint Staff who used to work for me, and one of the generals called me in. He said, "Sir, you've got to come in and talk to me a second." I said, "Well, you're too busy." He said, "No, no." He says, "We've made the decision we're going to war with Iraq." This was on or about the 20th of September. I said, "We're going to war with Iraq? Why?" He said, "I don't know." He said, "I guess they don't know what else to do." So I said, "Well, did they find some information connecting Saddam to al-Qaeda?" He said, "No, no." He says, "There's nothing new that way. They just made the decision to go to war with Iraq." He said, "I guess it's like we don't know what to do about terrorists, but we've got a good military and we can take down governments." And he said, "I guess if the only tool you have is a hammer, every problem has to look like a nail."

So I came back to see him a few weeks later, and by that time we were bombing in Afghanistan. I said, "Are we still going to war with Iraq?" And he said, "Oh, it's worse than that." He reached over on his desk. He picked up a piece of paper. And he said, "I just got this down from upstairs" -- meaning the Secretary of Defense's office -- "today." And he said, "This is a memo that describes how we're going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran." I said, "Is it classified?" He said, "Yes, sir." I said, "Well, don't show it to me." And I saw him a year or so ago, and I said, "You remember that?" He said, "Sir, I didn't show you that memo! I didn't show it to you!"

The Pentagon has long maintained plans to invade virtually any and all countries in the world:

It sounds like a joke but it's not. War Plan Red is real. It was drawn up and approved by the War Department in 1930, then updated in 1934 and 1935. It was declassified in 1974 and the word "SECRET" crossed out with a heavy pencil. Now it sits in a little gray box in the National Archives in College Park, available to anybody, even Canadian spies. They can photocopy it for 15 cents a page.

War Plan Red was actually designed for a war with England. In the late 1920s, American military strategists developed plans for a war with Japan (code name Orange), Germany (Black), Mexico (Green) and England (Red). The Americans imagined a conflict between the United States (Blue) and England over international trade: "The war aim of RED in a war with BLUE is conceived to be the definite elimination of BLUE as an important economic and commercial rival."

In the event of war, the American planners figured that England would use Canada (Crimson) -- then a quasi-pseudo-semi-independent British dominion -- as a launching pad for "a direct invasion of BLUE territory." That invasion might come overland, with British and Canadian troops attacking Buffalo, Detroit and Albany. Or it might come by sea, with amphibious landings on various American beaches -- including Rehoboth and Ocean City, both of which were identified by the planners as "excellent" sites for a Brit beachhead.

Wheat Is No Longer King

Inspired by the Washington Post series on The Global Food Crisis...
Now, more than ever, we need to focus on what has been going wrong in farm country. From bad farm legislation to indifferent politicians to ignoring the expansion of big agribusiness conglomerates, what we should be doing this spring is adjusting our policies. Instead, we're focused on Reverend Wright, St. John McCain, and Grand Theft Auto IV.

...with 100-pound bags of North Dakota flour now above $50 -- more than double what they were a few months ago -- he [Stephen Fleischman] sees no alternative to a hefty increase in the price of his signature product, a bagel made by hand in the back of the store.

"I've never seen anything like this in 20 years," he said. "It's a nightmare."

Fleishman and his customers are hardly alone. Across America, turmoil in the world wheat markets has sent prices of bread, pasta, noodles, pizza, pastry and bagels skittering upward, bringing protests from consumers.

But underlying this food inflation are changes that are transforming U.S. agriculture and making a return to the long era of cheap wheat products doubtful at best.

Half a continent away, in the North Dakota country that grows the high-quality wheats used in Fleishman's bagels, many farmers are cutting back on growing wheat in favor of more profitable, less disease-prone corn and soybeans for ethanol refineries and Asian consumers.

"Wheat was king once," said David Braaten, whose Norwegian immigrant grandparents built their Kindred, N.D., farm around wheat a century ago. "Now I just don't want to grow it. It's not a consistent crop."

It is precisely because of the fact that we don't engage on these issues anymore that farm policy means virtually nothing in America. It's been scrubbed from our consciousness. It's been eliminated from the culture. Did you happen to notice--the Ashton Kutcher-inspired trend of wearing a mesh farmer cap never really took off. If you live on the East Coast, as I do, you see nothing farm related and almost no relevant news on major websites. Don't go looking for it in the paper--you won't find much there.

In fact, the series I'm quoting from is one of the few times you will see these issues talked about with any substance. Even then, without agriculture beats and without prominent news divisions based in the Midwest these days, you're only getting a small sketch of the issues.

In the 1980s, more than half the farm's acres were wheat. This year only one in 10 will be, and 40 percent will go to soybeans. Braaten and other farmers are considering investing in a $180 million plant to turn the beans into animal feed and cooking oil, both now in strong demand in China. And to stress his hopes for ethanol, his business card shows a sketch of a fuel pump.

Across the Red River and farther north, in Euclid, Minn., Don Strickler, 63, describes wheat as "a necessary evil." Most years, he explained, farmers lose money on it. Still, it provides conservation benefits and can block diseases in soybeans and sugar beets when rotated with those crops.

Wheat's fall from favor, little noticed when it was cheap, has been long coming. Though still an iconic symbol of American abundance -- engraved on currency and praised in song -- the nation's amber waves of wheat have been increasingly shoved aside by other crops. The "breadbasket of the world," which had alleviated hunger and famine since World War I, now generally supplies only a quarter of world wheat exports.

U.S. farmers are expected to plant about 64 million acres of wheat this year, down from a high of 88 million in 1981. In Kansas, wheat acreage has declined by a third since the mid-1980s, and nationwide, there is now less wheat in grain bins than at any time since World War II -- only about enough to supply the world for four days. This occurs as developing countries with some of the poorest populations are rapidly increasing their wheat imports.

Sadly, this same type of story appears often, and this one from almost two years ago could have been written today:

Once the driving force behind transforming the United States into the “breadbasket of the world,” wheat is being steadily replaced by corn as the crop of choice for American farmers.

Genetic modifications to corn seeds, the growing demand for corn-based ethanol as a fuel blend and more favorable farm subsidies are leading farmers to plant corn in places where wheat long dominated. In Kansas, known for a century as the Wheat State, corn production quietly pulled ahead of wheat in 2000, with Kansas producing 23 percent more corn than wheat last year.

This year’s drought-ravaged crop is expected to be the second-smallest harvest for American farmers since 1978. It follows a year in which American farmers planted the fewest acres of wheat since 1972. And while corn acreage nationwide passed wheat about a decade ago, its footprint and that of soybeans are spreading across a greater swath of the Midwest, farther north and west into the Dakotas and central Minnesota — traditional wheat country, where growing corn and soybeans was once almost unthinkable.

“It is getting harder and harder for American farmers to say they feed the world,” said Ken Cook, president of the Environmental Working Group, an environmental research group based in Washington. “Instead, they feed S.U.V.’s.”

The decline of wheat and the broad relandscaping of America’s farmland have come about for several reasons. Better seed technology has given corn and soybeans a widening edge over wheat, and more favorable subsidies have encouraged farmers to abandon wheat. Changing consumer tastes and food packaging advancements have slowed American wheat demand.

It's not like we haven't been warned. It's time for policymakers to engage on these issues and stop rewarding big agribusiness conglomerates for their bad behavior. It's time to hold hearings and try to add some incentives to stick with wheat growing. As the latest farm bill goes into effect, it's time to take the steps necessary to grow more wheat and stabilize our supply.

Governments Will Fall

I can't help but look at stories like this and think about what comes next:

The U.N. World Food Program has flagged 30 nations confronting mounting food insecurity this year as a direct result of market forces; 22 of them are in Africa. As prices climb, Mauritania, Burkina Faso, Cameroon, Senegal and other net food importers have been racked by civil unrest. Hunger is spiking in parts of the continent in patterns similar to past bouts of drought, floods or civil strife. In Mauritania -- a nation of 3 million straddling Arab and black Africa -- the number of people not getting enough food is up this year by 30 percent in rural areas despite a relatively good annual harvest, according to the WFP. A food emergency has been declared in broad sections of the country, with the food program rushing to roll out feeding stations.

U.N. experts, World Bank officials and aid groups fear it marks the onset of the worst food crisis in the region in decades; officials are calling for $755 million in fresh emergency food assistance from rich countries. Aid groups are already falling behind in their efforts to provide food across the continent, leaving even the poorest communities increasingly dependent on the market.

"This is the new face of hunger," said Josette Sheeran, WFP executive director.

Globalization was supposed to eliminate this kind of recurring disaster. With economists radiating confidence about the new efficiencies of the global market, the need for food self-sufficiency seemed almost archaic. In that new reality, global markets would provide the long-term cornucopia that the arid earth here could not, and at reasonable prices.

Globalization is the cause of these problems, not the solution. If you consider that having one genetic strain of seed material can lead to a lack of biodiversity, then that's globalization in a nutshell, pardon the pun. If the same seed grown in Iowa, Kenya and the Ukraine is susceptible to drought or some other type of failure, you have the makings of a global problem on your hands.

Everything has a cause and effect, and if people are starving and going without basic necessities, then the consequence of that is going to be unrest. Governments will fall. Revolutions will happen. Arable land that can sustain crops is going to increase in value, and armed men are going to protect their arable land or take it away from someone who is weaker. Flooding Africa with cheap arms and weapons means a greater chance of seeing ten or fifteen or even more regional wars could break out over scarce resources. If you don't think the issue of Ukraine trying to break away completely from Russia and become a separate entity matters, think of Russia starving while Ukraine feeds Europe. No, I don't think Putin is going to stand by and let that happen, either.

And, just in time, the Pentagon has created AFRICOM so they can "keep a handle" on all of these issues, right? Well, right now, they're temporarily based in Stuttgart, Germany.

No, that's not a joke.

Biofuels, food prices, and you

I started noticing food prices creeping upward a little over a year ago. It was in the winter, and I started hearing on the BBC overnight that Mexico was in the grip of a tortilla panic, as corn prices, driven by ethanol demands, increased to the point that the food staple was priced out of reach of hundreds of thousands of Mexico's poor, and new price controls were put in place after people filled the streets in protest. I made a conscious effort to start noticing food prices.

I live an urban existence - I rarely shop in a supermarket or purchase processed foods, instead I shop at produce stands, specialty markets, the natural foods store, farmers markets, and Costco. Prices at the produce stands haven't changed all that much. What I have noticed most acutely have been increases in prices of staple food items at Costco. The price of 25-pound bags of flour, rice and pinto beans have either doubled or nearly doubled in the last year.

Across Africa, NGOs and scientists have joined their voices to form a chorus calling for a moratorium on converting food crops to fuel crops.

Wooed by the possibility of an emerging "green OPEC," struggling nations of sub-Saharan Africa have rushed to convert their farm land from food crops to fuel crops - and decreased food security for the people who live in those countries.

In Asia, skyrocketing prices of rice have fueled fears of social instability driven by food insecurity. In Pakistan, thousands of troops have been deployed in recent months to guard shipments of wheat and flour. Soybean shortages in Indonesia have sparked street protests and driven fears of social unrest. China has implemented stringent price controls on cooking oil, grains, meats, eggs and milk.

The universal increases in food prices prompted World Bank President Robert Zoellick to speak out about the looming crisis in food security yesterday.

Zoellick held up a bag of rice during a news conference Thursday to illustrate the severity of the food crisis.

"In Bangladesh a two-kilogram bag of rice ... now consumes about half of the daily income of a poor family," he said. "The price of a loaf of bread ... has more than doubled. Poor people in Yemen are now spending more than a quarter of their incomes just on bread."

And Zoellick says prices for basic staples will remain high for an extended period of time.

"I think you have a perfect storm of things coming together," he tells NPR's Steve Inskeep in an interview. "You have high energy prices. You have the increase in demand from some of the developing countries. ... As the Indian commerce minister said to me, going from one meal a day to two meals a day for 300 million people increases demand a lot.

Not only is food insecurity increasing; globally, diets are changing and becoming homogenized; more and more of the world's people rely on mass-produced, factory farmed food stuffs that are shipped all over the world. In this reality, that a Big Mac tastes exactly the same in Tokyo as it does in Topeka is a goal to be worked toward, rather than a fact that sets off creepy, sci-fi, spine-tingling like it ought to.

This trend toward dietary homogenization ought to spark rounds of worry, and panels of United Nations experts should be seated for brainstorming sessions to reverse this disturbing trend. The fact that dietary diversity is decreasing globally increases the vulnerability of vast numbers of people as reliance on external sources of food increases and self-sufficiency becomes a thing of the past, and cereal grains that could feed millions of hungry people end up in gas tanks of Ford Extinctions and Dodge Dinosaurs.