Monday, February 28, 2011

A possible silver lining to the high food prices

One silver lining could be found from the high food prices for farmers in the west. The high prices are motivating them to plant more crops this year. The farmers hope to capitalize on the high prices this year with a bumper crop and a bumper income. The extra food that it will yield should be more than plenty to feed the world, if they can afford it.

From NPR, reporter John Ydstie files a story that analyzed the high food prices.

Bad weather may have set the stage for this spike in grain prices, but Greg Page, president of the global food giant Cargill, says that while supplies are tight, prices have risen more than was necessary. He says that's partly because of instantaneous global communication.

"People read stories about food prices going up and/or food being short and there's a natural hoarding instinct, I think, wired into all of us and people buy that extra 5-pound bag of flour or 2-liter bottle of vegetable oil," Page says.

Multiply that by 100 million households, he says, and concern about a food shortage becomes a self-fulfilling prophecy. Governments got into the hoarding act, too, he says.

Greg Westland produces hard red spring wheat and soybeans on about 5,600 acres in Cando, N.D. The snow is still deep in North Dakota, but Westland is preparing for planting, spending days in his shop with his sons, prepping equipment. The high prices have convinced him to try to boost the number of bushels he produces per acre.

"We're adding more fertilizer, shooting for a 60-bushel hard red spring wheat crop up here and a 42-to-45-bushel soybean crop," Westland says.

Those yields would be about 20 percent above average. Cargill's Page says brisk fertilizer and seed sales indicate that farmers are responding.

"If nature gives them any collaboration at all I think we are clearly in a position to feed the world handsomely and actually to build some stocks this year based on the number of acres we would predict will be planted," he says.

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