Soylent Green

Here’s some food for thought contributed by Jon Markman, a stock market analyst writing for MSN.money. In an article entitled ”Could we really run out of food?” he reports that grain surpluses in storage are at an all time low, while new acreage planted is also at an all time low (despite recent efforts in the rain forests), and that the combination has put grain commodity prices at an all time high. Several factors have combined to cause this phenomenon, including not only farmland lost to urban sprawl and the manufacture of biofuels by both the US (using corn) and the Euros (using soybeans), but also pressure from developing countries like China and Indonesia, where animal protein (from grain fed stock) is breaking into the diet in record amounts, and always the relentless population growth with famine ubiquitous in the third world.

 

The numbers are chilling.  Prices on basic grains have tripled in the last three to five years, with the poorer exporting countries like Russia and the Ukraine (wheat) and Vietnam and India
(rice) now holding back exports to encourage lower prices at home.  Hardest hit are the Philippines
and Indonesia, which warn of impending famine and civil unrest unless grain imports resume. And Mr. Markman didn’t point out, but I will, that some of the countries at risk have nuclear weapons. This should be kept in the back of mind forever, when any idea of trade embargos and protectionism arise. The global economy is here to stay.

 

While this hasn’t had much effect on US food prices yet, presumably because of our far larger storage capacity and good weather in the Midwest for the last two decades, signs are near. Markman suggests following pizza prices as the best indicator. Hmm. He also suggests investing in agro-biz stocks, such as Monsanto, as a protection against the downward market. His advice is to invest in seed companies, especially the ones involved in genetic research, fertilizer and pesticide producers, and companies that make big farm machines. I doubt if this advice will be welcome news to our readers.

My advice would be my version of Michael Pollan's now familiar phrases: eat less, mostly vegetables, not so much meat, which always applies. Vote against biofuel, though right now both parties support it, so good luck. And finally, if you feel forced to invest in food technology stocks, avoid the one that produces Soylent Green.  You won’t like how they make it.

 

 

Comments

[greensgal]

Isn't it ironic that in America we talk, in a time of impending famine, about investing in and profiting from the very companies that have helped cause and control the extent of world famine - disgusting!

[Napanite]

That's harsh, not entirely wrong, but harsh. I don't think that the technology that allows mass production of grain crops in huge yields is to be blamed for famine, but it probably has allowed the world's population to expand to the point where it is an unavoidable evil.

Of course the system isn't sustainable, but dealing with 6 billion lives that double every decade isn't itself sustainable. Ask Malthus. On the other hand, the technology that used these excess harvests to make paint and nail polish and diesel fuel during a period of world famine is disgusting, and must stop, if for no other reason than as an example of social justice.

The engineering solutions of bigger yields, farming of marginal land, genetic pest resistance and so on should be thought of as stop-gap measures needed to preserve the social order while other changes occur. The other changes need to be rapid modernization of the third world, population control and eventual downsizing, and a more equitable sharing of wealth, with developed countries recognizing they can't sustain their Whole Foods standard of living any longer.

The fact is, I see no signs that any of these needed changes is happening, and nuclear technology is spreading faster in the third world than either agricultural yields or population control. Meanwhile, Monsanto's grain shipments around the world are more necessary than ever to maintain what little international stability we have, and to keep the wolf away from the door a bit longer.