“Higher food prices have increased poverty, destabilised governments and helped trigger revolutions,” asserts Paul McMahon, “leading to a revival of fears about our ability to feed the world.” [“Opinion: Food market is increasingly volatile,” Financial Times, 11 April 2014] McMahon is the author of ‘Feeding Frenzy: The New Politics of Food’ and managing partner at SLM Partners, which acquires and manages agricultural land for institutional investors. That might cast him as a villain to some; but, his concerns about rising food prices and the impact they will have on the world are broadly shared. McMahon describes the “rollercoaster ride” that food prices have been on since 2008. He notes that peak prices for foodstuffs are getting higher and, when prices come down, they remain higher than the nadir of the last price trough.
The culprit most often pointed to as the reason for rising food prices is climate change. A study from the United Nations’ Intergovernmental Panel on Climate Change, asserts that the world is “ill-prepared” to meet the risks that are emerging as a result of a changing climate. “Global crop yields for maize, rice and wheat could be significantly affected by 2050 if nothing is done to tackle climate change,” the report concludes. [“Climate change could lead to significant food price rises,” by Gurjit Degun, Supply Management, 31 March 2014] By some estimates, the global population could be peak around 9 billion people by mid-century and rising food prices, coupled with falling crop yields, could mean that billions of people might be plunged back into poverty if something isn’t done to correct the course we are on.
But climate change isn’t the only reason that food prices are rising. Betsy Blaney reports, “The highest beef prices in almost three decades have arrived just before the start of grilling season, causing sticker shock for both consumers and restaurant owners — and relief isn’t likely anytime soon.” [“Rising cost of beef causes shoppers and restaurant owners to weigh options, producers to worry,” StarTribune, 12 April 2014] One of the reasons that beef prices are rising is because the emerging global middle class has developed a taste for meat. As a result, “everything that’s produced is being consumed.” Nearly a third of all arable land is currently being used to grow crops to feed livestock rather than to feed people. One potential solution to this challenge is increased production of fake meat. Although that may sound nasty, you’d be surprised. For information on that topic, read my post entitled “Our Sense of Taste and the Future of Food Security.” The fact of the matter is, however, that the effect of consumer tastes on food security pales in comparison to the effects of climate change.
Emiko Terazono claims, “From droughts and floods to wildfires, agricultural markets are increasingly feeling the change in the world’s climate. The frequency of agricultural shocks caused by extreme weather events has risen sharply over the past decade, and the resulting surge in food commodity prices has hit not only consumers, but everybody in the food supply chain, including farmers, agricultural traders and food manufacturers.” [“Climate extremes inflate food prices,” Financial Times, 11 April 2014] Terazono explains how the combination of changing climate and growing demand combine to put pressure on food prices. She writes:
“The prices of coffee, cocoa, wheat and other grains have risen sharply since the start of the year, because of droughts in Brazil and in the grain growing regions of the US, Ukraine and Australia. Moreover, the S&P GSCI agricultural and livestock index has jumped almost 17 per cent so far this year. Even when inventories of agricultural commodities are plentiful, a sharp rise in demand from emerging markets means that markets are tighter and more vulnerable to negative news about production.”
McMahon claims, “Our planet has the biophysical resources to feed 10bn people. We already produce enough to feed that many, but much food is wasted or diverted towards the rich. Nonetheless, there are reasons to believe that food prices will stay high and volatile in the decades to come. This will maintain the chronic pressure on the world’s poor, but may also generate acute crises for the more privileged.” He is not the only pundit to make these arguments. To learn more, read my posts entitled “The Supply Chain’s Role in Food Security” and “Preventing and Mitigating Food Waste.” The fact remains, however, that changing climate conditions will have a dramatic effect on traditional agricultural areas. To understand these changing conditions and what can be done to adapt to them, Big Data analytics are likely to play a large role. Kenneth Cukier, data editor for The Economist and co-author of the book “Big Data: A Revolution That Will Transform How We Live, Work, and Think,” told a gathering of agricultural professionals, “‘Big Data’ is coming, and it’s going to hit you like a tidal wave.” [“‘Big Data’ to Fundamentally Change Ag, Says Expert,” by Darrell Boone, The Farmer’s Exchange, 21 March 2014] In the agricultural sector, Cukier told the gathering:
“Data collected by farm machinery manufacturers can now in some cases analyze — in real time as you move across the field — when different parts of your combine are operating outside the normal range of heat or vibration. Then they can accurately predict a part failure before it happens, saving you valuable time and money.”
He went on to tell the audience “that the accumulation of these huge amounts of data that can be precisely applied to specific problems has created a new form of value, which is an asset that can give its users a competitive edge in the marketplace. He also said that while Big Data can bring big opportunities, it can also bring thorny legal and ethical questions — like who owns (and controls) the data.” Boone reports that Cukier’s comments were followed by a panel discussion. During that discussion, Sarina Sharp of Fair Oaks Farms told participants that her enterprise now uses “robotic milkers” that help it “to better achieve their goals of profitability and animal welfare through the use of Big Data. Specific instances included the ability of the robot’s computer system to use lasers to precisely identify each cow during its first experience in the robot. From there, it can collect vast amounts of health and production data on each cow during each milking.”
Another panel member, Kip Tom of Leesburg, told the audience, “Today, we’re at the convergence of … biotechnology, the ability to remote monitor and sensor, and now Big Data — which puts an augmented reality at our disposal. Today is much different than in grandpa’s day. We need the tools and technology that computerization has brought to agriculture to be able to profitably drive production and marketing decisions, with the kinds of acres we’re farming.” Earlier in the day, Indiana Soybean Alliance CEO Jane Ade Stevens, told participants that her organization had identified key trends that would affect the future of agriculture. They included:
- Who’s running the farm? [There’s a difference between how large agricultural firms and family farms are operated. Some Big Data analytic capabilities may be too expensive for small operations.]
- Disconnected policymakers. [Some politicians make decisions based more ideology than reality.]
- The public’s love of food. [How do farmers adjust to changing tastes, like the emerging middle class’ desire for more meat or differences between the Baby Boom generation and succeeding generations?]
- Aging infrastructure. [Failing infrastructure could make getting crops to market more difficult and costly and result in U.S. farmers losing their competitive advantage.]
- Increased risk and volatility. [Due to climate change, regulatory requirements, etc.]
- Big Data, and the accompanying need to “farm the data.” [Farmers and ranchers are more likely to be found behind computer screens than behind tractor steering wheels.]
Stakeholders in the agricultural industry understand the risks they face as well as the consequences of failing to overcome the challenges that lie ahead. In the years ahead, I predict that both governments and the private sector will employ the power of Big Data analytics to help address these challenges. In order to save the world, you have to save its food supply.