Corn Based Ethanol causing "Peak Food" - 1/02/08

You may have herd of Peak Oil where we have peaked on the amount of oil the world can produce, but have you heard of "Peak Food" a term created by Kevin Kerr with the Resource Trade Alert.

The Commodity market has gone up by leaps and bounds including oil and gold.  Wheat and corn are at tremendous highs. Wheat is around $9 vs. $5 this same time last year.  Corn has almost doubled recently.

What is the cause?  Well, more farmers are taking land formally used to grow wheat and other crops and planting corn.  Corn is making them a higher profit due to ethanol demand. 

Also the world’s population is exploding and tremendous increases from countries like China and India are overloading the demand for everything.  Add this to the world wide drought we have experienced. Australia cut its harvest forecast 31% due to dry weather.  Russia has reduced wheat exports due to low supply. 

Adding to the food for a growing world population, there is also a feed demand for growing cattle due to the demand for beef.  Soybeans used for cattle feed has also been in demand for biodiesel use.

What’s next?  Grains have no way but to go higher in price. 

Global Demand for food
Higher Petroleum prices  
Drought conditions expected
Demand for biofuels like biodiesel and ethanol

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