Food Prices – Trending Upwards Forever?
While food prices have risen significantly over the last several years, they’re still well below levels that prevailed during the food crisis of 1975 and for most of the last century. That was one of the key points that Sandra Polaski, a policy wonk at the Carnegie Endowment for International Peace, made at the U.N. roundtable discussion I described in my last post.
Polaski noted that food prices historically have been volatile, falling and rising whenever supply and demand get out of whack. For that reason, Polaski wasn’t ready to bet that food prices are on a permanent upward trend, reversing 100 years of generally falling food prices.
Polaski was later challenged by a representative of the U.N.’s Food and Agriculture Organization (FAO) in the Q&A session. The FAO representative – didn’t catch his name – noted that a growing middle class and rising global population would put enormous pressure on the world’s capacity to feed its inhabitants. The speaker felt that demand for food would outpace the supply, leading to persistent increases in food prices.
Polaski’s response? Rising demand, she contended, is not outstripping our ability to increase supply, noting that demand for food has been rising 1.3 percent annually, while productivity has increased 46 percent. In the short- to medium-term, she felt confident, we could “easily increase supply to meet demand.”
It was comforting to hear those words, but who knows who’s right. Most of what I’ve been reading seems to conclude otherwise. In an editorial in the New York Times, Victor Davis Hanson, a fellow at the Hoover Institute at Stanford, notes that technology and machinery can “now only marginal improve on past serial leaps in production.”
Whatever happens, one thing seems certain: how and what we eat will become more and more important as we continue to strain the world’s finite resources.