Thread: So do we have enough food.

As far as I know there is no such mandatory grain reserve. With the free market (and grain is worldwide on a free market, albeit distorted by massive farm subsidies in the EC and US), what will happen is that as it becomes scarcer grain will rise in price - and this is already obvious; in fact I have heard that prices of wheat have doubled in the last six months, not 70% in 12 months. As the price increases some uses of grain become uneconomic - for example feedlot raising of cattle, making more available for direct uses such as bread. I see a figure recently suggesting that the grain price component of bread prices is about 5% of the retail price, so the increase in wheat prices will (should anyway!) have little impact on bread prices.

The competition between food and fuel in Australia is less significant here than in the EC for two reasons - for a start, Australia is a major exporter of the major fuel inputs, sugar, grain and oilseed, and because of the lack of government support for biofuels compared to the EC there is far less incentive to produce it.

John

YES BUT, The good conditions in Canada and USA in the early season suggest a good harvest in May 2008, so any shortage will be short!
Both China and India keep strategic grain reserves, and India has an intervention price which has resulted in (when I last asked a couple of years ago), about 44million tonnes in stock, just weeviling away.
To keep it in perspective this is about 3
times Australia's production of wheat.
BUT as it is ungraded crap, it is not generally sold to any wealthy countries.
So there is little chance of Chinese and Indian hordes descending on Australia looking for wheat.
Regard s Philip A

Also, Australia's consumption of wheat is not large compared to exports.
AFAIR we use about 4 million tonnes in Australia.
Seeing the crop will be about at the very least 10 million tonnes, there is plenty to go around, but not much to export.

Regards Philip A

I just watched SBS and ironically they had a similar story to BBC but also went on about the amount of land being used for fuel production.

By the JDNSW, they also backed what you posted, saying wheat prices had jumped at least 100%.

Hi Philip, my worry is that as we don’t have a mandatory national reserve, either the little wheat we succeed in growing is exported because of the high prices or we are going to be paying ridiculous prices for what ever is sold here.

Cheers.

Dont be silly. We as Australians just want to flog off our resources as quick as possible for a quick buck, with no real thought to the future or a bad couple of harvest years. Sad but pretty much true.
Look at the resources boom.

Most wheat exported from Australia undercuts the destination's landed US price, so Aussies are getting paid less, not more. Wheat import price parity is what puts a limit on what consumers (mills and feedlots) will pay, although export parity is normally the basis for payments to grain producers. Eastern states will probably not have an exportable surplus this year, so wheat will have to be imported either from WA or from overseas - either way at a premium to what exporters in WA will get just due to the shipping costs. If the dollar goes down see what wheat costs then!
There's no national reserve but that's expected - there hasn't been much recongition of the worth of food production in Australia either until very recently - well not since WW2 anyway.

It just increases the importance of the statement that everybody needs a farmer.
The price of the wheat in a loaf of bread may be 5% but I can assure you the poor B---dy farmer does not see much of that.
There are too many middle men in the food chain -- parasites you may call them really.
So support your farmers, Buy local produce at farm gate or markets direct from farmers.
We are going to have to pay our farmers a fair price for produce of all types or they are headed the way of the Dinosaur.

Unfortunately a lot of the "farmers produce" supermarkets etc. end up being more expensive then the local Coles or Woolies