Three questions...Originally Posted by Rick M
1. How is the "food" figure generated? What commodities, in what markets?
2. Did he explain why the 2011 projection disassociates the two lines so dramatically?
3. What's the basis for projecting $140 oil in 2011? That doesn't seem to be any kind of consensus figure. We're having a spike at the moment, yes, but that looks to involve a risk premium, not supply/demand issues...
Questions re graph (food & fuel)
Hi, Steve
re your questions:
1. Dave used the International Monetary Fund index of Primary Commodities:
http://www.imf.org/external/np/res/commod/index.asp
The year 2005 equals 100 for the index.
2. The marked dissociation occurs in the latter half of 2010 and only Jan in 2011. Dave and I both presume this is due in large part to climate issues: the ongoing drought in China's wheat-growing provinces and the drought in SE Asia's rice regions:
http://www.atimes.com/atimes/Southea.../LG02Ae01.html
Also Russia's brutal summer:
http://en.rian.ru/analysis/20100920/160654461.html
India in particular has seen severe food price increases, as have several Arab nations.
3. I think you confused the two lines: the black line is for food, which corresponds to the Index on the left. Dave correctly has oil at around $90, but when the stats for Feb are in, that line will continue its upward trend.
By the way, are you still in the Philippines? If so, can you please give us a brief update of things there re food & fuel, political stability, etc.
Yes, I read that one backwards, bit too quick a glance.
Pretty normal here. Politics is as stable as it gets, barring the usual perpetual insurgency. No special price spikes in progress. The Philippines imports a lot of rice, but retail prices don't seem to fluctuate nearly as much as the futures index... possibly long-term deals with Thailand and Vietnam, would have to look into that to say.
It would be interesting to compare the futures index with a graph of farm prices in exporting countries. I suspect you'd find that middlemen are making the money.
Food & fuel
You are correct re middle-men, and that is very much an issue for Canadian family farmers, where net farm income remains at Depression levels in several sectors.
Should fuel prices continue to escalate, I fear that farmers will be forced to cut back on their activities. This would of course be counter to everyone's need, since food imports would also become more expensive and the market for them could shrink as well.
I have yet to see a plan for fuel emergencies which has a viable arrangement to ensure that the food supply chain is maintained during a supply/price shock.
If farmers are not assured that they can recoup their expenses from the marketplace, they will be reluctant/unable to up-front the money. The last time we filled our diesel tank, it was over $1,000. What farmers will do when it costs $2,000 is not clear.
We need a plan....
You better believe it .......except in America planning is Communism and we don't do that.
http://www.pri.org/world/population-...urity2643.htmlThe term "global security" often evokes images of guns and nuclear weapons. "We have inherited a definition of security from the last century, which was dominated by two World Wars and the Cold War," Lester Brown, author and president of the Earth Policy Institute told PRI's Here and Now. "What we're now faced with is a need to re-define security."
The biggest threats to our future aren't coming from invading nations, according to Brown. "It is climate change. It is population growth. It is falling water tables. It is rising food prices. It is failing states."
A scrimmage in a Border Station
A canter down some dark defile
Two thousand pounds of education
Drops to a ten-rupee jezail
http://i.imgur.com/IPT1uLH.jpg
... and Peak Oil
Thanks, Adam
I have been a great fan of Lester Brown/Worldwatch for decades, and of course he is correct.
But in addition to CC, pop'n, water & food, I would also add fossil fuel depletion. It is central to the other four: it's a major source of GHGs, it's allowed the ongoing population explosion, it is a factor in water supply, and it provides the fertilizer & the bull-work in our 21st Century food supply chain (from field to fork, as they say).
Commodity index speculation was up $70 billion last year to around $400 billion; close to 20x what it was before 2003. Structural problems exist, but the speculation is out of hand. This is 2008 all over again, it is sick.
We can start by establishing position limits on certain commodity derivatives.
Bourbon, I think you're right here. It's basically another bubble which will pop at some point just like other bubbles including the housing market. The 'global pool of money' has been sloshing around looking for new places to park since 2007-2008. As you point out, some of that money has landed in the commodities market driving up prices. The real question is who gets hurt when the bubble pops. Obviously the poor world round will benefit from cheaper food prices. Farmers will be hurt, of course. Remember the 80s? Farm aid?
UK decline, speculation
David
You are correct re British silence on your post-peak decline. It is surely a watershed moment in UK history, bound to make the history books.
Energy is not just another commodity to be sold... it provides work, and in the case of oil & gas, very fundamental work (mobility, heating and electricity).
I agree with comments re speculation... the problem applies not only to food 'commodities' but also to oil & gas... they are much too essential to be a play-thing for speculators.
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