Global Starvation Imminent as US Faces Crop Failure
Marc Davis
The Midwest is at the heart of our grain production. All it takes to devastate food supplies is one bad drought or flood. We are already seeing previews of these events. Last year the Midwest experienced extreme flooding and too much rainfall, which ruined at least $8 billion worth of crops. Conversely, an on-going unrelenting 3-year drought threatens America's "salad bowl". Most startling though, is this year's unusually cold spring that delayed plantings, stressed crops and hurt fruit production. In the background is a ticking food time-bomb – wheat rust – the No. 1 threat to the world's most widely grown crop.
Worst of all is the emotional toll these crop failures and financial strain take on growers. Farm-related suicides are becoming all too common in America, Australia and New Zealand and India.
Daily news address rampant concerns over rice, wheat, corn and soybean shortages. Last year, food rationing and hoarding crept into reality...
It's not enough that a huge portion of our grains goes to biofuel, tenuous crops are further impacted by a higher global demand for wheat-based foods on dinner tables.
Stock up now - buy in bulk - and pack for long-term storage any grain products and foods you regularly consume. It's easy, it's great insurance and will save you loads of money in the long run. The longer you delay, prices are only going to escalate, your options will dwindle, along with selection. Please do this before your options close.
When reading news articles, it is our hope you'll read beyond the headlines and hear the unspoken message - a quiet urging to prepare.
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June 19, 2009
By Marc Davis
Commodity Online
The world faces “mass starvation” following North America’s next major crop failure. And it could even happen before year’s end. So says Chicago-based Don Coxe, who is one of the world’s leading experts on agricultural commodities, so much so that Canada’s renowned BMO Financial Group named the fund after him.
Photo: Corn stands in floodwaters June 23, 2008 near St. Paul, Mo. More than a week of flooding in the country's heartland may be the region's biggest economic disaster in decades with tens of thousands of acres of farmland from Minnesota to Arkansas damaged for the season. (Joe Raedle / Getty)
Climate change will cause shorter crop growing seasons and the world’s under-developed farming sector is ill-prepared to make up for the shortfall, Coxe says. He has been following the farming industry for many years and benefits from more than 35 years of institutional investment experience in Canada and the U.S. This includes managing the best-performing mutual fund in the U.S., Harris Investment Management, as recently as 2005.
In particular, an imminent crop failure in North America will have particularly dire consequences for major overseas markets that are highly reliant on U.S. crop imports, Coxe cautions. Sadly, this scenario could have been avoided had successive North America’s governments not weakened the farming industry with too much political interference, he suggests.
“We’ve got a situation where there has been no incentive to allocate significant new capital to agriculture or to develop new technologies to dramatically expand crop output. We’ve got complacency,” he told BNW News Wire. “So for those reasons I believe the next food crisis – when it comes – will be a bigger shock than $150 oil.”
As the key strategist for the Coxe Commodity Strategy Fund, he has an astute understanding of the mounting challenges that the farming industry has contended with in recent years. Prior to entering the investment business, he served as General Manager for the Ontario Federation of Agriculture and General Counsel for the Canadian Federation of Agriculture.
He notes that farmers, not just in North America, but the world over are still reeling from the global economic meltdown and have consequently curtailed their output. Thus, the inauspicious prospect of a drop in global food production this year – the first annual dip in living memory – means that farmers will not be able to keep pace with current grain demand.
“And when we have the first serious crop failure, which will happen, we will then have a full-blown food crisis, which we will not be able to get out of because we will still be struggling to catch up (as a result of diminished crop yields),” he says.
Furthermore, the prospect of a near-term global food crisis has been exacerbated by a surge in demand for high-quality protein (meat) in emerging super-economies such as China and India, Coxe says. This means that burgeoning global demand for crop staples is already beginning to outstrip supply.
“During this decade, the annual increase in hectares of global cultivated farmland has been roughly 1.5 per cent, at a time global demand for grains and soybeans has been growing at double that rate,” he says. “We will be dealing with mass starvation with the first serious crop failure. It could happen as early as this fall if for instance we have a killing freeze in Iowa in August.”
In recent years, North America has been blessed with ideal weather conditions for crop cultivation, leading to bumper harvests, Coxe says. But he believes that climate change will soon lead to a trend towards shorter dry cycles, beginning maybe as early as this fall, which will exacerbate a supply-demand squeeze.
“We’ve been incredibly lucky with the weather up to this point. But if you cut the growing cycle by four weeks, that will dramatically reduce yields,” he warns. “People assume that the good times will last forever. There’s a sense that food has always been readily available and that it will always be there.”
Yet, we only need to look as far a back as the mid 1970s to an era when food staples suddenly became far less plentiful due to poor crop yields resulting from adverse weather, he says.
“There were major food surpluses going into that era. Yet, they were gone so fast,” he adds. “In fact, the major inflation of the 1970s was driven more by food than by oil.”
If society is to avoid a far worse situation than the food crisis of the 1970s, especially with the onset of a global population explosion in emerging economies, then the world has to dramatically ramp-up crop production. Especially crops like corn and soybeans, which are the best forms of livestock feed for producing animal protein, he adds.
Hence, the world can no longer settle for anything less than optimal crop yields, which requires exponential growth in fertilizer applications, he says. Yet, the under-application of such crucial nutrients, particularly indispensible potash-based fertilizers, has been a pronounced problem for decades in the world’s most populous nations such as China, India and Malaysia.
Without the long-overdue doubling of fertilizer applications, as well as a greater societal emphasis on preserving and nurturing the world’s arable land, the next global food shortage promises to be both pronounced and prolonged. And that could topple governments and destabilize the world’s political order, Coxe further warns.
An ominous omen of humanity’s first great challenge of the new millennium came just last year. This was when a short-lived spike in the price of food staples led to widespread hunger and ensuing political unrest in some emerging economies, including food riots.
(Marc Davis is Managing Editor, BNW Business News Wire)
http://www.commodityonline.com/news/Global-starvation-imminent-as-US-faces-crop-failure-18791-3-1.html
www.standeyo.com/NEWS/09_Food_Water/090621.global.starvation.com.html