“The End of Cheap Food” Cover Headline of Economist Magazine, December 10, 2007

What they should have said is “The End of Cheap Oil Means the End of Cheap Food”. Still they have come a long way since their 1999 cover story of “$5 Dollar a Barrel Oil?” That was the equivalent of the Boston Red Sox error of the century in print journalism. (I often wonder if the fellow who came up with that is in any way embarrassed. He should not be, forecasting is inherently failure prone.)

The New York Times ran a cover story in the Sunday Business Section 2 days ago on the mathematical certainty that oil imports into the U.S. are going to fall – although they did their best to obfuscate just enough so that their readers were left with plenty of hope for a techno fix.

Why these august publications are not capable of making the link and connecting these dots – and what it means to food prices and economic growth – is beyond me. As the volume of imported oil into the U.S. declines the rate of food inflation is more than likely to accelerate. The question is at what rate? Does a 3 % annual decline in oil imports mean a 3 % annual rise in food prices, or is it more like 30%?

It has been calculated by a number of credible sources that roughly 80% of retail price of food in the U.S. was to pay for the fossil fuel inputs of oil and natural gas into cultivating, fertilizers, pesticides, harvesting, transportation, etc… of our food. If the cost of fossil fuels doubles (not an unlikely event in my opinion) does the price of food rise 80%, or might it be more?

I prefer to believe that the market will respond quickly with more locally and personally produced food products, and if this means my neighborhood smells more like a barnyard street market in Peru than a fresh cut lawn in spring how will that affect housing values in my neighborhood? JUST KIDDING!! (about housing values in my neighborhood, pretty serious about the rest) Had you for a second… People will respond, working class and poor folks simply won’t be able to afford not to (if I may use the double negative). How else can a population with ZERO savings afford a near doubling of their food and energy costs?

Can you imagine, instead of marching for a cure for breast or prostate cancer, we have Johnny Appleseed marches for fruit trees and raspberry bushes? Al Sharpton marching for equal rights to inner city gardening space? Martha Stewart giving instruction on not just goat cheese dressing, but on milking the goat as well?

“May you live in interesting times”.


Mentatt (at) yahoo (d0t) com