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Farming declines so food prices rise
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by Amy Judd | November 18, 2008 at 04:00 pm
428 views | 19 Recommendations | 8 comments
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Food prices have apparently dropped in some areas in recent weeks, but this could in turn put some farms out of business.
According to The Wall Street Journal, "A slowdown in new farmland development could hinder efforts to ease the global food shortage. Earlier this year, those shortages triggered riots from Haiti to Egypt to Pakistan and raised fears of permanently higher prices for basic foodstuffs."
Everyone assumed that a recession would move food prices lower or at least keep them at current levels. Budgets that were strained by high commodities prices might gets some relief which they will need as employment and consumer prices fall.
The problems may be especially acute in the US where some farmers have been making a fortune off corn due to feed demand and ethanol. Many of those farmers decided to expand, take on more debt, and buy new equipment. The price of corn has dropped like a rock over the last five months. How are those farmers going to keep up with the debt service? In many cases, they won't.
Get ready to pay more for an ear of corns and a loaf of bread. Farm failures are sending food prices back up.
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Most RecentMost Recommended Comments (8)
at 16:06 on November 18th, 2008
The price of food commodities are declining steadily and have done so for at least the past 50 years.... recession or not. The last two years of increases have been an anomaly - so the drop in prices wouldn't have been a surprise.. really....
at 04:25 on November 19th, 2008
Yes, and this has pushed many farmers out of business, In Canada alone about 4000 farmer go out of business every year. We are now reaching a point where we do no longer have enough farmers to produce food, to the point that we all ready have a weed shortage of 17 million tone of weed for this year and this is only the tip or the beginning so to speak. in about 5 to 10 years food prises will go up by about 60% due to the lack of production and the mega farms can no longer pic up the missing production due to the simple fact that they to are going out of business due to high machinery prises and Fossil fuel prises that have gone up. For the past 5 years Farmers world wide have gone into major dept to keep up and are now 120% in dept over their actual assets all this to stay alive and produce cheep food. THis can no longer go on and will have a chocking end very soon, mainly for the consumer that has profited from this madness for now two generation and will have to pay up or starve. Fair, certainly not, however was it fair to push the farmers to the limit? I think not.
at 16:22 on November 18th, 2008
not an anomaly ... BIOFUELS!!
at 00:09 on December 14th, 2008
Bio fuel is not the main reason here even though it is often blamed for the problem. 65% off all farms are still small Family farms yet those produce over 75% off all the food available and those family farms are also the once going out of business due to low commodity prises, High dept loads and no young people taking over meaning an aging farm population.
In Japan alone 60% off all farm land is now abandoned and not longer being used, in Europe it is close to 50% and in North America 30% today.
at 19:17 on November 18th, 2008
Good posting, Amy. The state of agriculture (especially small farmers in places like India) is in a mess at present. Ive looked up recent publications on Amazon and there is real dearth of good analysis on the present situation!
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zeal photographyat 23:00 on November 18th, 2008
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at 00:48 on November 19th, 2008
In Pakistan, which is called by its government as an agricultural country, the farm production is on the decline because of the exploitation of farmers by the middleman and industrialists as well as high input costs because of the criminal inaction of by the successive governments. For example, price of some of the produces at retail level is thrice than what the farmer is paid. Interestingly, in some of the cases there is no value addition is involved. Majority of farmers being uneducated or under-educated and this is the reason that they easily fall victim to exploitation.
at 19:41 on December 16th, 2008
Small farmers here in British Columbia are under stress too. Land prices are escalating where the good land is, putting it out of reach for farmers. There is currently a land assessment review going on in this province that may raise taxes on farms and put even more out of business. The small farms on Vancouver Island won't be abandoned, they will be sold for mini-estates for the well heeled and be lost for farming forever. If people here want safe, fresh food they are going to have to pay increasing prices.