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The World

Sep 5, 2012

Food prices soaring thanks to global warming

A report released by the World Bank in late August showed that global food prices rose by 10% in July. Climate change is being blamed, writes ANU's Simon Copland.


A report released by the World Bank in late August showed that global food prices rose by 10% in July. The price hike has been largely due to the massive heatwaves and droughts that have swept across the United States and eastern Europe over the past few months, causing havoc for farmers, destroying crops across the continents.

The Food Price Watch report is released by the World Bank each month and tracks global food prices for several staple items. The July report found  that maize and wheat prices rose 25% and soybeans by 17%. Only rice saw a drop in prices, by 4%.

The price increases have been felt hardest by those in the Third World. For example, maize prices increased by 113% in July in some markets in Mozambique. In South Sudan, sorghum prices rose by 220%, while they rose by 180% in Sudan.

Australia has in no way been immune to the drought shock. In August Australia’s biggest bread maker Goodman Fielder said that bread prices were set to rise over the coming months. The price increases are due to the collapse in the corn harvests in the US. These harvests are forecast to drop by 100 million tonnes this year, in turn pushing wheat prices in Australia from $214 a tonne to $310 a tonne.

The shock in grain was also predicted to have an impact in chicken prices, with chicken feed accounting for about 65-70% of the cost of producing a chicken. In July, some retailers predicted prices were set to double almost immediately because of the drought.

This is not the first time extreme weather have been directly linked with food price hikes in Australia. For example, during the 2002-03 drought, food prices rose by 4.4%, nearly twice the rise of 2.7% in the consumer price index. Over 2005-07, drought prices rose by 12%, again double the CPI increase of 6%. The Queensland floods of 2010-2011 saw significant increases in food prices, although these increases were temporary.

These price increases are now seen by scientists as a direct result not only of global warming, but also in increasing climate variability, which is causing more droughts, floods and extreme weather events.

The World Watch Institute, a global sustainability research institute, blames increased prices directly on the climate variability that comes with climate change. As it states:

“Climate change has been attributed to greater inconsistencies in agricultural conditions, ranging from more-erratic flood and drought cycles to longer growing seasons in typically colder climates. While the increase in Earth’s temperature is making some places wetter, it is also drying out already arid farming regions close to the equator.”

New research coming from NASA scientist James Hansen earlier this year said that we can comfortably predict that not only are these sorts of events more likely to occur, but that we can also link current extreme weather events such as the US drought with climate change, meaning we can directly link climate change to significant increases in food prices. Even if the July price increases are temporary, with increasing climate variability, we should be prepared for increased prices and more shocks.


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17 thoughts on “Food prices soaring thanks to global warming

  1. Michael James

    It doesn’t help that large proportions of several food staple crops are sucked up to feed the insatiable maw of the ethenol market.

    Comes down to what’s better, trying to combat climate change using ethenol based fuels, or watching families in the third world starve.

  2. lindsayb

    Food prices also soaring due to massive greed in the handful of corporate giants who control the world’s grain trade and the bankers who manipulate international trade with their billions of free US Fed dollars. And a big thanks to the Howard government for selling off the AWB so that these multinationals could control our grain exports too.
    These psychopaths see food shortages as an ideal way to increase profits, caring little for the millions who starve as a direct consequence of their greed. My prediction is that this is going to end badly.

  3. Microseris

    And what are our governments doing to fight reduce carbon emissions? Federally relying on the purchase of overseas credits to reduce net emissions and in Victoria the Baillieu govt has given every nimby the power of veto for new windfarms within 2km of their home thereby strangling wind power (no restriction for coal) and has reduced the solar feed in credit to 30% of the per kwh retail price of electricity, thereby killing solar.

  4. Jim McDonald

    And still we have no national, no regional food security strategies….

  5. shanghai

    The grain futures market has been creating wild price fluctuations for years. It’s called speculation! All the coffee drinkers will recall the crazy coffee prices a couple of years ago – the reasons given were varied including crop failures – but there was actually plenty of coffee. Then the ‘coffee speculators’ moved to something else and the prices stabilized. By the way, the producers didn’t share in the spike in coffee prices…….
    And then how about the tons of fruit that were ploughed in or left unpicked this year in Australia because the price was too low to justify the cost of harvesting……..
    Then there’s the insane US legislation to force the use of bio-fuel…..
    Then we have the grain business to feed cattle………
    Then we have the tons of fish that are pulped into fertilizer…
    And of course the insane waste in the first world countries…..
    The list goes on …………….
    Hope someone has the answer!


    Last months data out of China showed a modest increase in some food crops too, although the real impact is yet to hit. They are dependent on imported soy for oil so that will obviously have an effect in their market.

    Meanwhile, the Rombot makes cheap jokes about climate change.

  7. heavylambs

    We have no food security strategies because economists do not talk to ecologists.

  8. Liamj

    Worry not, only the poor will feel it, just avoid the ungentrified burbs and check DFAT before next OS holiday, food riots are rather awkward for the overnourished.

  9. Frank Campbell

    “Food prices soaring thanks to global warming”

    No wonder the Right is on the cusp of a generation in power. No wonder the Greens languish, or that every redneck in the bush is salivating at the prospect of untrammelled extractive rapacity…it’s already started: cattle in Victorian national parks, demands for renewed logging in State Parks…

    The prime cause of this impending disaster is the endless repetition of intellectually dishonest tosh such as this piece by Copland. Exactly as climate change deniers claim in reverse, regional weather events are “evidence” of global warming. They are no such thing. Linking regional drought to geographically disparate prices rises and to global warming is a travesty both of science and economics. Commodity speculation, the latest global financial distortion developed by casino capitalism, is grossly magnifying short-term price increases. And there is as yet no proveable connection between regional weather variations and global warming, anthropogenic or otherwise. It’s only a few years since we suffered the absurdity in this country of claims that the last drought was “unprecedented” , with “unprecedented” bushfires, and assertions that certain regions would remain in permanent drought. The fantastically stupid $20 billion (over 20 years) Vic desal plant is the biggest bastard child of climate extremism. But there are many lesser examples.

    I’ve been saying on this site for over three years that the political fallout from climate millenarianism will decimate progressive politics. Until the end of 2009, not a word against the cult was allowed in the respectable media, leaving the field open for Rightwing opportunists like Jones and Bolt, not to mention the career criminal Murdoch. Since then, the ABC and Fairfax have gradually retreated from zealotry. Which leaves Crikey marooned alone on its stinking rock.

    What comment has Crikey made on the entirely predictable collapse of Gillard/Brown climate policy in the last few weeks? Just one confused piece of apologetics from C. Alexander…the floor price was dumped, now the buyout of “dirty” coal power stations. The idiocy of having a $23 carbon tax followed by a likely $5 or $10 price in 2015 is obvious to all. Why would coal plant operators sell cheap when they know their margins will return in three years? What’s left for the govt? Dump the tax altogether. Quite likely. Many in the ALP never believed in the vast rickety carousel of “climate policy” anyway. The ALP is stuffed full of closet Martin Fergusons just aching to come out.

    We need a new Left /Green movement. And we need it now.

  10. Ken Lambert

    A piece of AGW alarmism of the worst kind. No particular drought or flood can be directly linked to so called climate change.

    ENSO is the main driver of dry and wet periods on both sides of the Pacific. ENSO is supposed to be a redistribution of heat already within the Earth system.

    Not much warming has been measured in the oceans over the last 10-15 years and the oceans store 90% of any increase in heat energy from a warming imbalance.

    Hansen himself has reduced his estimate of the warming imbalance from 0.9W/sq.m to 0.6W/sq,m over the last 5 years – hardly in line with CO2GHG theory which predicts logarithmic increase of radiative forcings.

    If you want to increase food supply and reduce CO2 release into the atmosphere – get rid of corn ethanol and use gas for electricity generation – piss off all black energy holes like wind turbines and try making PV solar panels reproduce themselves.

  11. Ken Lambert

    Frank Campbell take a bow. Although not on the left of politics, I agree you with several good points you make.

    “What comment has Crikey made on the entirely predictable collapse of Gillard/Brown climate policy in the last few weeks? ”

    NOTHING. A trail of Gillard disaster is the Carbon Tax and its $23 price and absurd linking to the European trading price and the collapse of the ‘dirty filthy polluting brown coal generators’ – and Crikey says bugger all.

    Only Ferguson amongst Labor’s rabble has enough brains to work out that brown coal is still so cheap than even with a carbon price of $23 – it is still competitive, and at $10 still cheap. BTW what is the new green source and cost of 80% of Victoria’s central generation??

    A completely predictable fiasco wrought by technical and economic illiterates in the Labor/Green coalition, cheered on by noisy kiddies like Hansen-Young.

    All this and the crap slow website – banners which pollute it and failure to print my rants all make good reasons to not renew my subscription.

  12. Mark from Melbourne

    Surely it’s a tad more complicated than the headline indicates?

  13. Chad

    New research from James Hansen. This would be the same research that is missing southern hemisphere data, the period chosen 1959-1999 leaves out the warmer 1930’s and the cooler 2000’s. Please stop confusing weather with climate. Like the alarmists in Australia such as Flannery and the CSIRO, who hilariously did exactly that during the last drought which we were repeatedly told was going to be our new climate. Then that cyclical drought ending rainfall came.

    Predictably no mention of the continuing effect of biofuel support policies. Simon Copland has a history of producing misleading articles on the subject of catastrophic anthropogenic global warming. Though, being a member of the Green’s, you can understand why.

  14. Scott


    Yep, I would say so. If you look at the world bank report from 2011, you see that there are a few other factors identified that feed into food prices.

    Two others specifically mentioned are the US dollar value and the oil price. Two of the greatest food price increases were in 1974 (when the US dollar was weak and the oil price high due to OPEC supply shock) and in 2008 (again, US dollar weak and oil high).

    Performing a regression of monthly wheat prices and US/Australian exchange rates and Oil prices between the 70’s and now produces a statistically significant (at the 1% confidence level) result of a 1% increase in the US/AUS exchange rate (hence a weakness in the US currency) producing a 0.65% increase in the price of wheat (holding the price of oil constant). Obviously there is OVB in this regression, but it gives some insight into how financial factors affect prices as well.

    There is no doubt that supply and demand factors (caused by weather shocks) influence the food price, but like everything, best not to look for monocausality. There are usually a range of factors involved.

  15. Captain Planet

    “Food Prices Soaring Thanks to Global Warming”

    Let me rewrite that headline for you, Crikey.

    “Food Prices Elevated, Most Probable Cause is U.S. and European Droughts exacerbated by Food Price Speculation”

    Any link to Global Warming needs to be appropriately qualified. Making such a sweeping claim in the headline is just asking to have your credibility destroyed by the denialist brigade, and quite frankly doesn’t do anybody any favours.

  16. green-orange

    @”Australia has in no way been immune to the drought shock. In August Australia’s biggest bread maker Goodman Fielder said that bread prices were set to rise over the coming months.”

    Except Australia is likely to have a _record_ wheat crop this year.

    Food prices are climbing moderately (after a big fall post 2008) because of :

    – Rising oil and fertiliser prices.
    – Rising labour costs particularly in Africa, South America and Asia.
    – Increasing demand from China and India.
    – Falling levels of subsidies in USA and Europe.

    BTW, food prices are still well below those in 1975 in real terms.

    The current drought in USA has virtually no effect on supply because most of the wheat crop is harvested in WINTER.

  17. Captain Planet

    i didn’t know america’s wheat harvest was in winter….
    that crazy american wheat, eh?
    so different to australian and european wheat, which has alwys been, and always will be, harvested in SUMMER.


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