About food.

As Becker points out, Paul Ehrlich and others predicted in the 1970s (beginning with the first "Earth Day," in 1970) mass starvation as a result of continuing population growth. They were wrong, in part by failing to predict the Green Revolution, which greatly reduced the cost of food production. The situation today is different.

The green revolution is misunderstood. The development and/or introduction of new food crops and new cultivars of old crops isn't novel, isn't revolutionary. It has happened repeatedly in the past and will happen again in future. New materials and methods for increasing soil fertility have also happened repeatedly in the past, and will happen again in future. It is no accident that these advances do not happen before time, before they are needed. So long as a given agronomic system is good enough, it will endure. When it isn't, it changes.

The demand for agricultural products has grown, though not as a result of population growth; instead as a result of increased demand for ethanol and other biofuels, and for food that requires more agricultural acreage to produce. Today, besides people and pigs eating corn, our motor vehicles "eat" corn that has been converted into ethanol. And in China and India, which together contain a third of the world's population, increased wealth has led to an increased demand for meat, in China for beef. Cattle eat corn and other crops and are in turn eaten, but the amount of crops consumed in this process is several times greater than the amount that would be consumed if people ate the crops directly, rather than indirectly by eating vegetarian farm animals. China's consumption of beef, which has been growing rapidly for a number of years, is expected to grow 4 percent this year--yet it will still be only about 15 percent of U.S. beef consumption per capita.

Increased demand for agricultural products should lead to increased supply, but the supply response is limited because of the higher price of gasoline, an important input into food production, and because of scarcity of good agricultural land (in part a result of population growth), which implies an upward-sloping supply curve for food..

It is misleading to say that cattle eat corn. They can, but this is not required. It's a business decision. Until recently corn was cheap enough to burn, even cheaper than grass. It's true that it takes a lot of corn to make beef fat, but the price was right. The cost of shipping the corn around was a major part of the price. It was cheaper to move the animals to the corn than to move the corn to the animals. The location of such feeding systems seeks to reduce shipping costs.

Both the cost of grain and the cost of shipping have risen. It is no longer cheaper to feed cattle corn than grass. Some feedlots have already changed the rations used. Change will continue as people adapt to new realities. The grain based system took decades to develop, and we can expect it to take some time to change again. Consumer preferences are also changing. Ever fewer people want fat meats. The whole rationale for feeding grain to ruminants is weakening. It took a marketing effort to persuade the public to value such fat meats. It took decades but it worked. It will take some time for those learned preferences to disappear.

One change in feeding systems is instructive: the use of silage. There's nothing novel about silage, it's traditional. The whole corn plant, not just the grain, is chopped and fermented. It's great feed and comparatively cheap since the volume and energy of the whole plant greatly exceeds just the grain. But it's too heavy to ship around. It's 65% moisture. It doesn't keep as well either since exposure to air spoils it fairly quickly. So, it is produced and consumed locally. No shipping costs. The combination of hugely increased nutrition and elimination of shipping blows the old grain equations into the past. Besides, neither people nor cars can eat corn cobs and stalks, but cattle can and do.

Agricultural land is not scarce. It all depends on what is assumed under the description of "good". The Cerrado region of Brazil, the “closed land”, was not considered to be good, but it now produces 54 percent of all soybeans, 28 percent of the corn, 59 percent of its coffee and supports 55 percent of Brazil’s beef industry. It is only 1/3 cultivated. Production could more than double.

The techniques for making those previously closed lands bloom are applicable to other nations in South America as well as Africa. Research continues to develop even better systems. There is no reason to suppose that the green revolutions will not continue in future, as they have in the past. The great population centers in China and India will benefit too. They have made some advances but it is still very early days for them. They have achieved no where near the productivity levels of more advanced systems.

We need to take a broader and longer term view of agronomic systems, despite the present pain. This is the way to avoid bad policies based in ignorance and short term expediency. Ehrlich and that whole cohort of doom mongers were wrong for many reasons, not just failure to predict agronomic improvement. It lets them off too easy, as if they just made that one great blunder, when they have been wrong so often about so many things. Just as we have less than desirable energy systems being constructed at a rapid rate in developing countries - coal in other words - we have less than optimal agronomic systems. They have great potential for improvement, but they have to bootstrap themselves out of abject poverty first. Merely extrapolating present behaviors, and predicting doom, is juvenile at best, but more likely instrumental. They have short term political motives.

The other shoe.

. . .the boom in petroleum prices and subsidies to ethanol and other biofuels are the most important forces explaining the recent increase in food prices. Both the sharp run up in oil prices, and the continuing subsides to ethanol production in the United States, and to a lesser extent Europe, induced an increasing diversion of corn from feed and human consumption to the production of biofuels. The main goal of the diversion has been to produce more ethanol as a substitute for gasoline. During the past year, one quarter of American corn production, and 11 percent of global production, was devoted to biofuels. . .

The Malthusian forces of population and income growth contributed only a little to explaining the big increase in grain prices since 2002. The large rise of world food prices came after food prices had been either stable or declined for many years. Although incomes in China and India, countries that account for almost 40 percent of the world's population, did grow rapidly during this decade as well as during the 1990's, global consumption of corn, wheat, and rice grew more slowly since 2000 than during the five years earlier. To be sure, the slower growth in consumption is partly the result of the rapid increase in grain prices. However, if an unusually large increase in world wide demand for grains to use as feed for animals and for human consumption explained the rapid increase in these prices, consumption should have grown more rapidly during the later period, even after adjusting for any induced increase in grain prices.