Food production over time

[doom&gloom]

Re: Food production over time

The land owners and the banks make lots of money at $50-60k per hectare, and they don't even need to do any work.

If I could flip my land in Uruguay tomorrow for $50k/ha I would do it. then again, what do I buy?

I think inflation (in dollar terms) will easily double my land value (nominal) over the next two decades.

[doom&gloom]

Re: Food production over time

Mike Snyder does HIS analysis of the food situation...

http://theeconomiccollapseblog.com/a...d-crisis-looms

*snip*

B

ut it isn't as if food is not already expensive enough. The price of food rose much faster than the overall rate of inflation last year.
As I wrote about yesterday, American families found their grocery budgets stretched very thin during 2011. Just check out these food inflation rates from last year....

• Beef: +10.2%
• Pork: +8.5%
• Fish: +7.1%
• Eggs: +9.2%
• Dairy: +6.8%
• Oils and Fats: +9.3%

If prices rose that fast last year, what will those statistics look like at the end of this year if this drought continues?

*snip*

A

nd all of this is very bad news for a world that is really struggling to feed itself.

In many countries around the globe, the poor spend up to 75 percent of their incomes on food. Just a 10 percent increase in the price of basic food staples can be absolutely devastating for impoverished families that are living right on the edge.

You may not have ever known what it is like to wonder where your next meal is going to come from, but in many areas around the world that is a daily reality for many families.

*snip*

[globaleconomicollaps]

Re: Food production over time

supply of what? meat? or grains that get fed to meat? because we all know the more grains fed to create meat products, the less grains for everyone and everything else.

You guys are working on the wrong paradigm. All of that grain that is currently being used to feed cattle will be turned into first class hooch and poured into your car. This is not just the end of cheap food it is the end of cheap meat.

[BadJuju]

Re: Food production over time

Mike Snyder does HIS analysis of the food situation...

The problem with using this is that it neglects the trends of prices over the years.

http://data.bls.gov/cgi-bin/surveymost

Either way, things are rising and rising in general compared to a decade ago.

[raja]

Re: Food production over time

Originally Posted by raja

1) Peak Oil will significantly reduce food production IF present dietary practices are maintained.

I don't agree at all. There are all sorts of other uses oil is presently being used for; ultimately is food more or less important than all of these others? I think it is more important and will retain priority over many of these other uses. Basic pyramid of needs concept.

Under Peak Oil, food will become more expensive.
When costs rise, people find ways to economize.
Food production will go down as demand declines . . . .

Let's say oil jumps to $10/gallon in the US, and everything connected with oil goes up in price.
For the average family, what will they do? They will spend less . . . on everything.
They will turn down the house thermostat, drive less, make do with older cars and clothes, reduce entertainment epenses, and they will economize on food. Economizing on food may mean eating out less, buying cheaper food items such as vegetarian meat extenders, eating expensive foods such as meat less often, etc.

For many people in the 3rd world, they may simply starve.

[BadJuju]

Re: Food production over time

Under Peak Oil, food will become more expensive.
When costs rise, people find ways to economize.
Food production will go down as demand declines . . . .

Let's say oil jumps to $10/gallon in the US, and everything connected with oil goes up in price.
For the average family, what will they do? They will spend less . . . on everything.
They will turn down the house thermostat, drive less, make do with older cars and clothes, reduce entertainment epenses, and they will economize on food. Economizing on food may mean eating out less, buying cheaper food items such as vegetarian meat extenders, eating expensive foods such as meat less often, etc.

For many people in the 3rd world, they may simply starve.

This is how I see things. There is a lot of room for cutting consumption for American consumers to offset the decline in their wealth. If people need a vehicle to get around, they'll downsize. When I needed a vehicle to get to where I needed to go, I had a scooter. I got 100 mpg, it cost only $2,000, and it was a cinch to maintain. Insurance was $150 a year and would be less for others because I was a first-time driver. When people tell me that you cannot ride it all year, I laugh at them and tell them I did whether it was freezing cold or the rain was so bad you could barely see. So I think I am a good example of this. I don't drive now. I eat well on 2-3 dollars a day. And I pay all of the bills for my mom, yet I spend only about $300 a month. Could probably get that down to $225 if she didn't keep the heat pump on all the time and run the water all of the time. And that is one reason why I simply do not see peak oil as being too problematic, at least on a personal level. A lot of people are going to lose a lot, but if you didn't have much hedged around it in the first place, then there is not much to lose.

The biggest thing that sucks for me is that I am pretty much the only one preparing for this crap. So with my meager amount of money, I have to hedge for everyone in the family. And that is a major strain on me when I could be using that money elsewhere.

[lakedaemonian]

Re: Food production over time

Under Peak Oil, food will become more expensive.
When costs rise, people find ways to economize.
Food production will go down as demand declines . . . .

Let's say oil jumps to $10/gallon in the US, and everything connected with oil goes up in price.
For the average family, what will they do? They will spend less . . . on everything.
They will turn down the house thermostat, drive less, make do with older cars and clothes, reduce entertainment epenses, and they will economize on food. Economizing on food may mean eating out less, buying cheaper food items such as vegetarian meat extenders, eating expensive foods such as meat less often, etc.

For many people in the 3rd world, they may simply starve.

Hmmmmm.....I'm wondering if an effective hedging strategy could include going long on Hamburger Helper and long on the media company that produces the next Bandaid for Africa "We Are The World" album.

I'm back in the US again in a few weeks and I look forward to being stunned yet again with how such high volumes of food are served so cheaply like I perceived back in February.

Honestly, it felt like the food version of the price of gasoline circa 1999........a feeling like prices shouldn't be that low for some reason.

[doom&gloom]

Re: Food production over time

You guys are working on the wrong paradigm. All of that grain that is currently being used to feed cattle will be turned into first class hooch and poured into your car. This is not just the end of cheap food it is the end of cheap meat.

oh no no no, not me. That was also part of my thesis for investing in ag, that soy makes biodiesel so even a poorer country like Uruguay (in relation to the US) will have a constant supply of some form of diesel to runs its tractors to sell ag into the world.

[reggie]

Re: Food production over time

Is there any data on nutritional value per calorie over time? I would that graph to be in steep decline.

[BadJuju]

Re: Food production over time

Is there any data on nutritional value per calorie over time? I would that graph to be in steep decline.

Why would you think that?

[doom&gloom]

Re: Food production over time

Hmmmmm.....I'm wondering if an effective hedging strategy could include going long on Hamburger Helper and long on the media company that produces the next Bandaid for Africa "We Are The World" album.

I'm back in the US again in a few weeks and I look forward to being stunned yet again with how such high volumes of food are served so cheaply like I perceived back in February.

Honestly, it felt like the food version of the price of gasoline circa 1999........a feeling like prices shouldn't be that low for some reason.

If you come up Seattle way i'll buy ya lunch and we can talk farming.

[doom&gloom]

Re: Food production over time

Under Peak Oil, food will become more expensive.
When costs rise, people find ways to economize.
Food production will go down as demand declines . . . .

Let's say oil jumps to $10/gallon in the US, and everything connected with oil goes up in price.
For the average family, what will they do? They will spend less . . . on everything.
They will turn down the house thermostat, drive less, make do with older cars and clothes, reduce entertainment epenses, and they will economize on food. Economizing on food may mean eating out less, buying cheaper food items such as vegetarian meat extenders, eating expensive foods such as meat less often, etc.

For many people in the 3rd world, they may simply starve.

People used to eating good steak economize down to cheap steak. Or they go to chicken or pork. I would say fish but fish is generaly pretty expensive except tuna, though now you can acquire thet Fukishima glow with enough tuna.

People will give up a lot of stuff before they give up eating. Eating is part of the FEW (food, energy, water). I sold wheat two years go at roughly 8 cents a lb. I don;t remember what my recent soy went for but I can look it up if you want to know. there's a lot of "spread" between the producer at the raw level and the stuff on the shelf. What is a $4 box of AllBran but a lb of wheat that has been processed, marketed, packaged and delivered? And you ever read the ingredient labels of your food? you find some soy in just about everything nowadays. If not that there will be some corn in there somehow.

People used to eating meat do not give it up to go back to beans and rice. Look at McD's -- even in a not so good economy they are just screaming along.

If anything, you may see some margin compression (we see it now) in the middle sector, but the producers are not going to produce for less than a profit. the marginal land would fall out of production, the better land stay in, supply and demand would drive up prices again until the marginal land makes sense to put back into production again. Ag is like any other market where the weaker players wash out from time to time. Then it all balances again.

In my particular case, I use absolutely zero credit. I operate as a "cash" business in that I self fund and borrow nothing. So I am ahead of anyone who has to borrow right there. Though the avge US farmer carries a debt load of about 7% nowadays. They learned from the experiences of the 80's.

Bart did a nice post on weather cycles, etc. I expect that too will be a big part of what happens as we go forward.

[BadJuju]

Re: Food production over time

People used to eating good steak economize down to cheap steak. Or they go to chicken or pork. I would say fish but fish is generaly pretty expensive except tuna, though now you can acquire thet Fukishima glow with enough tuna..

It will be interesting to see what happens with aquaponics. It has been predicted that most of the fish we consume in the future will be farmed as opposed to wild caught. And it is very cheap, even cheaper than chicken, in terms of energy required per pound of meat produced. I imagine it is because aquaponics can involve a closed system where you control all the variables. Furthermore, you can take advantage of vertical space so the rents associated with land are minimized.

[doom&gloom]

Re: Food production over time

It will be interesting to see what happens with aquaponics. It has been predicted that most of the fish we consume in the future will be farmed as opposed to wild caught. And it is very cheap, even cheaper than chicken, in terms of energy required per pound of meat produced. I imagine it is because aquaponics can involve a closed system where you control all the variables. Furthermore, you can take advantage of vertical space so the rents associated with land are minimized.

I too find it interesting, and there are a few operations doing that in the US in warehouses right now.

Atlantic salmon farming has some big issues with pollution and disease when they pen them in the Puget Sound, and I am sure in other places as well. and even though they are supposed to be "sterile" some have been ofund ot mate with the native runs. I can see some blowback coming in that sector one day.

[doom&gloom]

Re: And Zero Hedge gets in with a report from Morgan Stanley on soybeans

http://www.zerohedge.com/news/forget...oy-poised-lift