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World Bank says biofuels have caused world food prices to increase by 75%.

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World Bank says biofuels have caused world food prices to increase by 75%.

Old 07-04-08, 10:36 AM
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World Bank says biofuels have caused world food prices to increase by 75%.

Robert Mugabe wishes he could cause as much famine as George W. Bush has caused.


http://news.yahoo.com/s/afp/20080704...dbankusbritain

Biofuels behind food price hikes: leaked World Bank report

Fri Jul 4, 2008 3:34 AM ET

LONDON (AFP) - Biofuels have caused world food prices to increase by 75 percent, according to the findings of an unpublished World Bank report published in The Guardian newspaper on Friday.

The daily said the report was finished in April but was not published to avoid embarrassing the US government, which has claimed plant-derived fuels have pushed up prices by only three percent.

Biofuels, which supporters claim are a "greener" alternative to using fossil fuel and cut greenhouse gas emissions, and rising food prices will be on the agenda when G8 leaders meet in Japan next week for their annual summit.

The report's author, a senior World Bank economist, assessed that contrary to claims by US President George W. Bush, increased demand from India and China has not been the cause of rising food prices.

"Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases," the report said.

Droughts in Australia have also not had a significant impact, it added. Instead, European and US drives for greater use of biofuels has had the biggest effect.

The European Union has mooted using biofuels for up to 10 percent of all transport fuels by 2020 as part of an increase in use of renewable energy.

All petrol and diesel in Britain has had to include a biofuels component of at least 2.5 percent since April this year.

"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," the report said.

It added that the drive for biofuels has distorted food markets by diverting grain away from food for fuel, encouraging farmers to set aside land for its production, and sparked financial speculation on grains.

But Brazil's transformation of sugar cane into fuel has not had such a dramatic impact, the report said.

"The basket of food prices examined in the study rose by 140 percent between 2002 and this February," The Guardian said.

"The report estimates that higher energy and fertiliser prices accounted for an increase of only 15 percent, while biofuels have been responsible for a 75 percent jump over that period."
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Old 07-08-08, 10:25 PM
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Agricultural subsidies largely benefit agribusiness rather than small farmers or consumers.

Grundle, you'll remember me as Zorro in the soon-to-be-defunct mrcranky.com forums.
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Old 07-08-08, 10:34 PM
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At least the word is getting out now. Probably won't matter since the corn industry has DC by the balls.
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Old 07-08-08, 11:09 PM
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75%? Seriously? That seems really unlikely.
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Old 07-08-08, 11:18 PM
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Originally Posted by FearlessFreep
Agricultural subsidies largely benefit agribusiness rather than small farmers or consumers.
If they largely benefit agribusiness it is because agribusiness is a much larger part of the overall picture than small farmers. I live around nothing but small farmers and they benefit plenty.
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Old 07-08-08, 11:23 PM
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Originally Posted by GreenMonkey
75%? Seriously? That seems really unlikely.
Hard to say what statistics they are really using. In 2006 wheat was selling around $4 a bushel. It hit around $13 last year and has been staying around $10 this year. Corn is up a huge amount as well. Then you have alfalfa hay, which was around $140 a ton and is now around $200-$240. Barley hay went from around $100 a ton to $150 a ton in the past year. Rice is up over 100% int he past year as well. The products that are made from those are obvious targets, but then think about the cost of beef as a result of the extra money to feed the cows.

Now, have you seen the price jump at the supermarket? Not much. But these prices for the raw comodity can't stay where it is for very long before it trickles down.
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Old 07-08-08, 11:26 PM
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First of all, I say fuck them. They bitch and whine and moan, but it's OURS. We produce it...just one of the benefits of using 'too much' of the world's oil. We decide how to use it, it's not theirs to determine usage.

Then, I also say that, yes, biofuel from corn is a waste of fucking money and it's pushing land prices to 7,500 dollars plus per acre here in Iowa, which is outrageous. Just seven years ago or so, it was 2,000 an acre. I wanted to buy 40 acres of my Grandpa's land, now I'd have to be a multi-millionaire to do it.
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Old 07-09-08, 12:07 AM
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Considering they are talking about "world" food prices, it wouldn't surprise me.

I have to agree with DP to a point, however, if we replace food with OIL in this argument, then we are also saying those prices have a right to be as high as they are and countries who produce the most oil have a right to say "Fuck you."

But I do think countries which are so reliant on handouts, need to start thinking about not having large families, and growing their own crops.
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Old 07-09-08, 12:08 AM
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Originally Posted by kvrdave
but then think about the cost of beef as a result of the extra money to feed the cows.

Now, have you seen the price jump at the supermarket? Not much. But these prices for the raw comodity can't stay where it is for very long before it trickles down.
Beef prices are eventually going to go through the roof. They haven't gone up at all really since corn prices have gone crazy. I do some work with the owner of a slaughterhouse, and he obviously talks to a lot of people "in the know." They all say fill the freezer, buy another freezer, fill that one too. Because sooner or later, prices HAVE to go up a lot, or the feed lots will be out of business.

FWIW, corn and beans have been down near the limit both days this week, and wheat is no longer near $10 - it's about $8.40. Things aren't as bad as they had previously suggested in Iowa (DP, what have you noticed?), and the potential lifting of a tariff on importing ethanol has the market cooling their jets a bit (which Bush has been for in the past).

And I'd like to see more in-depth info on this report...I won't argue that biofuels haven't had a big impact on the increased food prices, but I'd argue that energy prices play a bigger role than the article suggests - and that higher energy prices are due to increased dedication to biofuels as much as anything. Another thing that has had a huge influence on increased commodity prices is speculators who got out of the poor stock market arena and into the new "exciting" world of commodity trading.
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Old 07-09-08, 12:13 AM
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Originally Posted by DarkestPhoenix
Then, I also say that, yes, biofuel from corn is a waste of fucking money and it's pushing land prices to 7,500 dollars plus per acre here in Iowa, which is outrageous. Just seven years ago or so, it was 2,000 an acre. I wanted to buy 40 acres of my Grandpa's land, now I'd have to be a multi-millionaire to do it.
Crazy, isn't it? Here in WI, we went straight from everybody needing their 5 acres and new house in the country driving up land prices to this. Things have leveled off quite a bit in the last year, but top crop acreage is sky high. Unless you are really well established, you better know how to handle your cash flows damn good if you want to expand now, because you'll be bankrupt before harvest time.

You should have bought 7 years ago.
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Old 07-09-08, 12:19 AM
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Good point aktick. One other thing that isn't mentioned so far is the price diesel will have on crops. Big farm equipment uses a lot of diesel. The big increases in hay prices could be completely related to that. But it will still trickle down.
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Old 07-09-08, 01:17 AM
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Originally Posted by aktick
Beef prices are eventually going to go through the roof. They haven't gone up at all really since corn prices have gone crazy. I do some work with the owner of a slaughterhouse, and he obviously talks to a lot of people "in the know." They all say fill the freezer, buy another freezer, fill that one too. Because sooner or later, prices HAVE to go up a lot, or the feed lots will be out of business.
Well, you'll only create a more rapid increase of meat prices if people stock up. Personally, I just won't buy as much meat. If everyone reduces their consumption, prices should level off.

What will be more interesting, is how fast food restaurants and restaurants in general would survive a huge increase in meat prices.
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Old 07-09-08, 07:48 AM
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Originally Posted by DVD Polizei
Well, you'll only create a more rapid increase of meat prices if people stock up. Personally, I just won't buy as much meat. If everyone reduces their consumption, prices should level off.

What will be more interesting, is how fast food restaurants and restaurants in general would survive a huge increase in meat prices.
If I can't get a double hamburger at McD's for $1, I will be very mad
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Old 07-09-08, 09:11 AM
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Originally Posted by DVD Polizei
Well, you'll only create a more rapid increase of meat prices if people stock up. Personally, I just won't buy as much meat. If everyone reduces their consumption, prices should level off.

What will be more interesting, is how fast food restaurants and restaurants in general would survive a huge increase in meat prices.
I agree, and that makes perfect logical sense, but I'm very biased in my opinion as the son of a former beef farmer and whose livelihood depends in large part on farmers.

But just as people will stop buying or reduce their consumption if prices get too crazy, farmers will stop growing crops or raising cattle if their input costs make the business unprofitable. Fuel costs are all part of the business, just as any business has their input costs, but there will be a point of diminishing returns where a lot of guys just say the hell with it if their costs get too out of whack with their income.
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Old 07-09-08, 06:56 PM
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Originally Posted by aktick
And I'd like to see more in-depth info on this report...I won't argue that biofuels haven't had a big impact on the increased food prices, but I'd argue that energy prices play a bigger role than the article suggests - and that higher energy prices are due to increased dedication to biofuels as much as anything. Another thing that has had a huge influence on increased commodity prices is speculators who got out of the poor stock market arena and into the new "exciting" world of commodity trading.
That's what I would have thought accounted for most of the increases...escalating fuel prices.
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