Outsized appetite in a finite world
Gwynne Dyer says the current round of drought-induced surges in crop prices is just a taste of what could come if consumption is not checked
Two months ago, the US Department of Agriculture forecast the biggest corn harvest in history: 376million tonnes. After two months of record heat and drought in the US Midwest, it has dropped its forecast to 274million tonnes. It is now forecasting the price per bushel could go up to US$8.90.
The heatwave in Russia is also cutting deeply into Russian wheat production. There will still be enough for domestic consumption, but Andrei Sizov of the Moscow-based farming consultancy SovEcon said last week that he expected Russian wheat exports to drop. For this and other weather-related reasons, wheat prices are on their way up too.
High wheat prices hit human consumers directly, but high corn prices hit even harder in the long run because huge amounts are used to feed animals and provide oil for processed foods. World food prices in general are on the way back up, and it's beginning to look like a pattern, not a series of accidents.
Meanwhile, on a different planet entirely, the McKinsey Global Institute, the business and research arm of management consultancy McKinsey & Company, published another report in June. It's the latest in an endless series of ever-bolder estimates by various "global institutes" of how fast the demand for goods and services is growing around the world.
The themes of McKinsey's new report, "Urban World: Cities and the Rise of the Consuming Class", are familiar enough. The world's economic centre of gravity is moving to Asia; huge numbers of new "consumers" will be joining the global market by 2025; there are wonderful opportunities for investors.
Then come the numbers. As the emerging economies grow, they'll all start buying fridges and baby food and, eventually, cars. But nowhere in the report does McKinsey deal seriously with the impact of a predicted total of 2.6billion consumers on world demand for food.
