My mother has always said we should keep the farm no matter what happens. My brother and I have never had much interest in farming and we have viewed the farm as an asset waiting to be sold so that we might put our share of the proceeds to "better use." I can't speak for my brother who is having his own financial struggles (as am I), but I'm starting to think the best use of the farm is to keep it. And the way things appear to be headed in the world, productive farm land might be as safe an investment as anything. not to mention a steady source of reliable income.
LAWTON, N.D. — Whatever Dennis Miller decides to plant this year on his 2,760-acre farm, the world needs. Wheat prices have doubled in the last six months. Corn is on a tear. Barley, sunflower seeds, canola and soybeans are all up sharply.
“For once, there’s great reason to be optimistic,” Mr. Miller said.
Naturally, surging prices means we pay more for basic staples at the supermarket so the extra income from higher crop prices is far from being all profit. Fertilizer and insecticide prices are higher, and diesel fuel has skyrocketed which also means higher costs to plant and harvest, so we'll have to wait and see if the end result means more money in the pockets of farmers. But global demand for agricultural products is definitely on the rise.
Many factors are contributing to the rise, but the biggest is runaway demand. In recent years, the world’s developing countries have been growing about 7 percent a year, an unusually rapid rate by historical standards.
The high growth rate means hundreds of millions of people are, for the first time, getting access to the basics of life, including a better diet. That jump in demand is helping to drive up the prices of agricultural commodities.
Farmers the world over are producing flat-out. American agricultural exports are expected to increase 23 percent this year to $101 billion, a record. The world’s grain stockpiles have fallen to the lowest levels in decades.
“Everyone wants to eat like an American on this globe,” said Daniel W. Basse of the AgResource Company, a Chicago consultancy. “But if they do, we’re going to need another two or three globes to grow it all.”
And there's the problem. No one on the globe needs to eat like an American and Americans would be wise to abandon the all-you-can-eat mentality and adopt more frugal and conservative standards. The problem of food shortages has the potential to eclipse our dependence on foreign oil. We are now facing a double whammy with escalating fuel prices in an era of inflation and recession in which prices for food basics are increasing at a far great rate than wages which, for many, are actually decreasing.
We would be wise to monitor this situation closely. Many of us may soon find we have more in common with our brothers and sisters in places like Nigeria than we realize.
Nigeria’s wheat imports in 2007 were forecast to rise 10 percent more. But demand was also rising in many other places, from Tunisia to Venezuela to India. At the same time, drought and competition from other crops limited supply.
So wheat prices soared, and over the last year, bread prices in Nigeria have jumped about 50 percent.
Amid a public outcry, bakers started making smaller loaves, hoping customers who could not afford to pay more would pay about the same to eat less. Sales have dropped for street hawkers selling loaves. With imports shrinking, mills are running at half capacity.
Welcome to the 21st century in an overpopulated world.