Thursday, 27 September 2012

U.S. drought and Russian winter threaten global food security

The United States farming heartland is suffering amid the country’s worst drought in 25 years.

While it’s always hotter in the summer months, a drastic lack of snow caused tiny amounts of meltwater to soak into the soil. Without water the cereals simply cannot grow.

The current drought of course has many causes but the worst U.S. drought for 800 years back in 2000-4 is being blamed by some scientists as a potential amplifier.

A recent study in the journal Nature Geoscience predicts, “the situation will continue to worsen, and that 80 of the 95 years from 2006 to 2100 will have precipitation levels as low as, or lower than, this “turn of the century” drought from 2000-4.

“Towards the latter half of the twenty-first century the precipitation regime associated with the turn of the century drought will represent an outlier of extreme wetness,” the scientists wrote in this study. These long-term trends are consistent with a twenty-first century “megadrought,” they said.

This makes for some depressing reading but the evidence is clear in the brown, withering farming heartland of the United States.

More than 60 percent of the lower 48 states are in drought. The situation is so pronounced that NASA has released satellite images of the Mississippi river at around 2.4 river stage water levels, the lowest for years.

The drought is enormous. Analysis of the U.S. Drought Monitor reveals two thirds of American land area is in mild or extreme drought.

Government agencies in the United States are issuing predictions ranging from severe to the “costliest natural disaster in U.S. history” for the affected states, according to the National Weather Information Service.

The U.S. Department of Agriculture has nominated 1,297 counties across 29 states as disaster areas due to losses caused by low rainfall and extreme heat.

And of course, because the U.S. is an enormous cereals exporter, this drought will inevitably affect the rest of the world as cereal prices rise.

Field corn makes up a large part of the cereal crop produced in America. The starch created from the corn is mostly used in feeding livestock or for producing ethanol.

Less than one percent of the corn produced in the United States is canned or eaten fresh.

Over two thirds are used to produce ethanol, or around 40 percent, up from 7.5 percent in 2001. In other words, an enormous 38 million of a total 96 million acres of planted corn in the United States eventually becomes ethanol.

Ethanol consumption is only going to increase in the years ahead as ‘greener’ technologies move to diversify away from traditional fossil fuels.

United Nations Food and Agricultural Organisation (FAO) director general Jose Graziano da Silva of Brazil has called for the United States to suspend biofuel production to ease pressure on cereal resources.

Coupled with a growing demand for cereals throughout the world, especially in the developing world, the base price for corn and wheat will rise. The drought of 2012 will only exacerbate this trend.

Until cellulosic ethanol, produced from sugarcane, experiences a maturing in technology, developed countries will continue to use corn for transport fuel, even though it is a global food source.

The drought is expected to decrease 2012 corn crop yields by 3 percent in comparison to 2011 while global drops could reach 8 percent.

And the situation hasn’t been much better across the Atlantic this year.

It was reported September 25 that Russian grain prices soared by more than 1,000 rubles per ton in a single week due to low yields of the cereal crop.

Grain belts in the Volga, Krasnodar, and Black Sea regions went through a destructive seven weeks of heavy rain and major flooding.

The rains were made worse because an extreme cold snap at the beginning of the year precluded snow cover and all but cancelled the expected moisture.

The ground was left extremely vulnerable to the floods in May.

Russian President Vladimir Putin visited the area in July to assess the damage that killed 171 people and displaced 12,000.

This was just the most recent in a list of dire problems for wheat production in the former Soviet Union.
Aside from the fact that 20 percent of Ukraine’s wheat does not reach market because of poor quality silos, the transportation options for exporting the rest are equally poor.

Almost all the former Soviet Union countries and Russia have revised down their estimates of wheat production for 2012.

The United States and European Union can usually make up the difference for these countries, but they are experiencing unprecedented problems also. 

French wheat production fell by a third this spring because of biting winter conditions.

France is the world’s second largest wheat exporter and can usually be relied on to cover the deficits in case of failure in other major wheat exporters.

International food prices are expected to rise as a result.

Corn and soybean prices are likely to hit record highs as the United States is the world’s largest exporter of corn, soybeans, and wheat.

At the moment, major concerns for the United Nations are hoarding or export restrictions by food producing countries as supplies dwindle.

The United Nations have discussed a consensus to avoid a repeat of the food riots sparked in 2007-8 by high food prices.

Ultimately, many international agencies are predicting high food prices in 2013 as the pressure of drought starts to reach the world marketplace.

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