Is the world running short of food?

Gwynne Dyer, a London based independent journalist, recently wrote an interesting article in the New Zealand Herald on this matter.

In short, he explained how the world's existing grain supply is being taken away from human consumption for the production of meat, heat and bio fuels.

Grain to meat

The world now consumes 5 billion hoofed animals and a staggering 14 billion poultry every year. A lot of these animals are being grain fed to produce high calorie beef, pork and chicken. In terms of utilization of the resource however, the conversion of grain to meat is poor.

Heat or droughts

There are very clear indications that for every one degree increase in mean temperature from the optimum, grain production drops by 10 %. We only have to take a look over the ditch at Australia, where the drought has already started this year to see the substantial drop in growing production.

Bio fuels

As Governments push for production of bio fuels, including ethanol, we will see grain crops diverted to fuel production. Gwynne Dyer noted that the amount of grain it took to fill a SUV once, would feed a human for a year.

The world has been through the "green revolution" where more fertilizer and better technology produced increased yields. Even with all this knowledge, since the 1990's crop yields have stopped rising and are starting to fall.

So how does all this affect the kiwi farmer you might ask? If you project forward, it is clear that static or reducing feed supplies for humans, along with an expanding population will see an increased demand for food. World demand for grain grown as human food will start to compete with grain that is being utilized for meat and bio fuel production. Fortunately, some grains can be readily changed from one use to the other.

New Zealand has a huge advantage of being able to produce meat and protein food cheaply using pasture land. This should give us a competitive edge as world food demand rises against static or falling supply.

We see large continents such as China, who were net exporters of grain and rice, are now net importers. New Zealand is fortunate to be a net exporter of food, unlike any other country in the world. As the demand for food increases, New Zealand agriculture industry will be strengthened and accordingly should see some good times going forward.

Because food production is going to become an even more important industry in New Zealand, I believe if you own land you should try and keep it in the family by either forming family trusts, or planning some form of succession into the next generation.

In summary, the world is becoming a hungrier place. Humans are now competing for grain grown for their food, against those wanting it to feeding it to animals or converting it bio fuel production. Put on top of that increasing world population and static or falling grain yields and New Zealand looks well poised to capitalize on a hungrier world.

And what is New Zealand's major export? Food. I believe we need to hang onto our farms as this could all get more interesting going forward.


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