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    Global starvation imminent ?

    http://www.commodityonline.com/news/Global-starvation-imminent-as-US-faces-crop-failure-18791-3-1.html

    2009-06-19

    By Marc Davis
    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.

    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 (TSX: COX.UN), 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)

    #2
    Not sure if I buy into this guys thinking but I found this statistic interesting.

    "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,”

    Comment


      #3
      Fransisco,

      I see Brazil has some of the worlds largest supplies of Potash now discovered... China is developing theirs.

      Sask Potash had better grab a brain... their strangle hold is going to backfire.

      We will have a very short crop in Alberta if we don't get some Precip and heat in a hurry!

      Argentina, Turkey, the areas in trouble are growing.

      Comment


        #4
        Pfhfff.
        The African continent alone, is capable of growing two crops per year.

        Yet, it's always NA farmers who are targeted and EXPECTED to feed the world cheaply, as if we have more of an obligation than do other societies.

        Do ONLY DA farmers have a worldly obligation, the singular duty, the sole moral responsibility, to feed the hungry any more than does Bolivia or Pakistan or Crete or Singapore?

        Growing the crop and getting paid for it are two different issues.

        A lot of smart people expect Canadian farmers to feed the world. With no returns. They will profit from our seeding and harvests, for sure.

        If DA farmers feel guilty enuff, we will continue to respond to these kinds of articles.
        Pars

        Comment


          #5
          Western canadian farmers must be able to afford to do that.

          If this average crop that I am hoping for doesn't come off forget about next year and the continuing of growing cheap food. I will be just another statistic.

          I have put more into this crop than in the past 3 years and I already know it won't be above average. Pretty disappointing. And that's considering I had managed to get cheaper fert and fuel than the past year.

          Rain - its the only ingredient I was missing.

          Comment


            #6
            Do you feel obliged to feed the hungry of the world; morseo than other countries should be doing?

            Comment


              #7
              My answer is no.

              I have a personal obligation to get beyond my break even point. That may or may not coincide with feeding the world.

              The point of the post though is that if supplies are as tight as this guy thinks they are we should see some very nice prices if the crop failure he's predicting happens.

              Comment


                #8
                The good prices would only help if we have
                a crop. Crop in our area looks fairly good
                but without more rain it won't matter how
                good the prices are we won't have much to
                sell.

                Comment


                  #9
                  Is he trying to help the potash producers. I also put a lot into this crop and cheaper fert yet mother nature with very little real rain will destroy this crop. July is here and piss doesn't make a bumper. Still spraying late canola ha ha ha I think I am psiong more cash away on this useless crop. Of to calgary then edmonton stoon and canora.

                  Comment


                    #10
                    A few more cold nights and no more rain and this farmer will be starving.

                    Comment


                      #11
                      If every farmer in the world farmed organically, would the world be a hungrier place?

                      Comment


                        #12
                        80% of the people in the world earn less than $1500.00 per year per capita.

                        and during the same time

                        the remaining 20% body of people in the world earn prob $15,000.00 per year per capita (That's where organics sell...buyers with money)

                        Even if you double your production and halve the price of your grain, need will not be satisified.

                        The solving does not lie in upping production. More wheat. More diamonds. More oil. More cheese.

                        The solving is for that 80% to earn more.

                        Trying to solve a political problem with an agronomic solution is at best, naive.

                        Pars

                        Comment


                          #13
                          Parsley... your data caught my attention and
                          motivated me to do a little research.

                          I checked the the G15 countries, which include
                          China, India, Brazil,Indonesia, Russia, South Korea,
                          Japan, Germany,France,Italy,UK,Spain, Mexico USA
                          and Canada.

                          These countries have about 60% of the world's
                          population... about 4.06 billion people.

                          The GDP of this G15 is about 75% of the world GDP.

                          Average income is measured in purchasing power
                          parity..PPP... which is a hypothetical unit of currency
                          based on the purchasing power the $US had in
                          1990 or 2000.

                          Average income in PPP's is about 13800.

                          I agree that solving the solving of world hunger is
                          not probable with agronomic solutions.

                          However the developing middle classes in China,
                          India, and Indonesia ... for example... will expand
                          the affordable market ... the real market.

                          BTW... solving a global overpopulation.. a
                          sociological problem.... is unlikely with a political
                          solution either.. or any practical solution for that
                          matter.

                          However, Parsley, do you foresee the growth in
                          organic foods to remain strong enough to maintain
                          the pricing premiums with, perhaps, a growth of
                          100% in 5 years?

                          I ask you because it seems to me we farmers tend
                          to be mostly focussed on maximizing production
                          rather than optimizing our net incomes.

                          I don't like participating in "mug's games!"

                          Of course... I could be wrong.... Bill

                          Comment


                            #14
                            The consumer has always driven the organic market in the past. And the consumer has gone out of their way to buy organic food. And pay a premium.

                            It hasn't meant that the organic farmer is more noble. Or more efficient. or cheaper.
                            Rather, I think organics has courted a farmer-consumer relationship . Also

                            Comment


                              #15
                              Also, I think that the organic consumer does not trust conventional farming methods. Organic conusmers are fine print readers, probably because they are better educated and have more disposable income to buy organic food.

                              They are fussy about what they put in their mouth.
                              Will this grow? Are you more aware of what you put into your mouth than you were ten years ago?

                              I will ask you this. Do you prefer knowing where your food comes from?
                              And how it was grown?

                              Everyone should read the book called, "Dying for a Hamburger".

                              Especially if you grow food.

                              Comment

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