According to Sue Fisher, an economics analyst at the Meat and Livestock Commission world food prices, as measured by the UN's Food and Agricultural Organisation, rose by at least one-third in the first nine months of 2007.
Last season resulted in a fall in production of wheat and maize in the UK, Canada and Australia by as much as 60 million tonnes. World stocks are now at the lowest level for almost 40 years . U.S. wheat stocks in 2008 will hit a 60-year low and world barley stocks a 42-year low. Global oilseed stocks are projected down 22 percent in one year.
In 2007, Chicago Board of Trade prices -- world benchmarks for wheat, corn, rice and soybeans -- soared despite big U.S. harvests. Wheat prices rose 90 percent, soybeans 80 percent, corn 20 percent. U.S. prices are key because America is still the world's breadbasket, the single biggest grain exporter.
"The fact we're having higher commodity prices here will have an impact around the world on food prices," Lapp , president of consultancy Advanced Economic Solutions , said. "We've only started to see the impact of higher costs translate into higher consumer prices,"
"Things are really getting tight now and the importing countries are getting worried and some of them may even be panicking a bit because they need to import grain and are not sure if there will be enough," Lester Brown , president of the Earth Policy Institute and author of the 1995 book, "Who Will Feed China?", said, noting that world grain stocks have fallen in seven of the last eight years. "There is going to be continued upward pressure on prices. One of my concerns is that this will lead to social unrest and growing political instability in the low- and middle-income countries that import a large share of their grain supply."
The Food and Agriculture Organization in Rome on December 17 said 37 countries are facing food crises and called for aid.
"High international cereal prices have already sparked food riots in several countries," the FAO said.
FAO chief Jacques Diouf pointed to political unrest over food markets in countries like Yemen and Senegal."There is a very serious risk that there will be less people able to get access to food because of prices," Diouf said.
The reasons apart from bad weather and the suspected climate change , income growth and population growth in China and India -- they are westernizing their diets . Moving up the food chain to meat has a built-in accelerator for draining grain supplies . Chinese consumers ate an average of 20 kilograms (44 lb) of meat a year in 1985, but this shot up to 50 kg in 2007. This reduces the amount of grain available because one kg of beef can take as much as eight kg of grain to produce.
And then there is the effect of the new darling of farmers, politicians and agribusiness: biofuels.
About 24 percent of a record U.S. corn crop in 2007 will be diverted to ethanol , a percentage that could shoot well past 30 percent within two years after President George W. Bush signed the new U.S. energy bill into law on December 19.
"If we convert our entire grain harvest into fuel for cars, it may satisfy 16 percent of our total automotive fuel needs. So it's not really a solution," Brown said. At a time when more than 800 million people go to bed hungry every night, history will judge the U.S. energy bill as "one of the great tragedies," he added.
So importer and biofuels demand look set to continue to shrink world grain stocks, even without major weather or climate shocks. It all adds up to rising U.S. food price inflation with knock-on effects for the world.
A Very Happy New Year