World food prices plateau and aren’t going down, experts say

What do you get when you combine global warming with biofuels and more than 6 billion humans? High food prices.

By Gulnaz Saiyed

Heshima Kenya – a Chicago nonprofit that provides shelter, education and resources for unaccompanied refugee girls and young women in Nairobi, Kenya – has had to incorporate a new normal of high food prices into its yearly budget. A grant of $10,000 doesn’t go as far as it did when the organization was founded in 2007. A tomato that had cost 5 cents now sells for two or three times that price at a Nairobi market.

Heshima Kenya raises funds primarily from U.S. donors to support its programs in Nairobi. However, goodwill from individuals supporting NGOs isn’t the only way developing nations receive financial support for food from Americans.

It’s basic supply and demand: food supplies are low, and demand is growing. Putting a meal on the table is more expensive worldwide.

In 2011, the U.S. spent nearly $1.9 billion on global food aid, which fed more than 66 million people. Of this, $93.9 million went to Kenya – 45 percent more money than the nation received in 2008.

The need for this type of aid is likely to increase as global food insecurity rises.

Since the global food crisis began in 2007, there has been a major spike in the cost of eating day-to-day in developing countries, particularly in east Africa where Heshima Kenya sends its resources.

YouTube clips of the Arab Spring and graphic images of starvation in Somalia all connect back to the difficulties people have nourishing their families. Even though these topics are no longer trending, it doesn’t mean they’ve gone away.

Forces such as climate change and a rising global population are making crops, such as corn, less affordable worldwide. In the middle of 2010, a metric ton of corn – one of Illinois’ major crops – sold for about $154. A year later, it was double that and remains close to $300 a metric ton.

The corn market mimicked food prices internationally, which doubled between 2003 and 2008, dropped slightly before spiking again last year, according to the United Nations. So far in 2012, prices have declined slightly, but Roger Thurow, senior fellow on global agriculture and food security for the Chicago Council on Global Affairs, says we’ve reached a “new plateau” of high food prices.

There will be slight fluctuations, but the world isn’t going back to the decades of abundant, cheap food that preceded the food crisis for a number of reasons, says Thurow.

First, the world’s population is high, continuing to grow quickly. The U.S. Census estimates that Earth’s population is more than 7 billion people, predicting the rise to 9.5 billion by 2050. Thurow says we’ll need to double food production between then and now in order to feed everyone.

While populations grow overall, some developing nations such as China and India are becoming more prosperous, causing more of their citizens to move into the middle class, says Thurow. These populations are eating more and eating differently, which increases demand.

Second, climate change creates extreme weather conditions that hurt harvests.

A study released in April in the journal “Nature” says warming temperatures in United States will decrease corn harvests significantly in the coming years.

Furthermore, the demand for biofuels means that some corn, which is used in ethanol, is going into gas tanks and not into people’s stomachs.

Finally, all of these factors have led to a decrease in grain stockpiles, which nations like Kenya have kept as backups for bad harvest years.

Thurow says supporting programs like Heshima Kenya and the Obama administration’s Feed the Future campaign can help underdeveloped parts of the world become self-sufficient and highly productive in a time when the world needs more food production. By lowering the global food needs, U.S. food aid decreases, and American taxpayers save money for their own grocery bills.