Something unprecedented has happened in the farming sector, the consequences of which may lead to mass starvation and collapsing governments all over the world. In the fall of 2008, legions of wheat farmers in exporting nations failed to fertilize their land because of the astronomical cost of ammonia. This unusual event may lead to a fifty percent reduction in wheat yield and a forty percent decline in protein from what’s harvested.
Our agrarian methods for growing food has radically altered in the last hundred years. Farming traditions of years past rotated crops on sections of land. And cultivated land remained unseeded for one or more growing seasons to allow water to accumulate in the soil. But according to report by Stranded Wind, an enterprise that facilitates the development of stranded renewable energy resources to address the issues of fossil fuels, energy independence and global warming:
“Today on the fertile lands of Iowa, Illinois, and Nebraska the biennial dance of corn and soy is giving way to economic pressure from ethanol and advancing technology; unthinkable even five years ago, today corn on corn’ is the norm…Things are changing in equally dramatic ways in the drylands of the Dakotas, but the trend runs opposite to that seen in the wetter, richer lands to the east. Skyrocketing ammonia prices and limited moisture are driving lands out of annual wheat production and into a biennial rotation of fallow and wheat production”
Stranded Wind’s report warns us that because farmers are trying to save money on ammonia costs they are reducing the use of fertilizers on planted wheat. The result will be a diminished wheat crop at harvest, and the wheat that is harvested will have far less protein. The report also concludes wheat farmers will abstain from farming their land for an entire year to save money; they’re compensating for the drier areas wheat is cultivated in because wheat needs large amounts of both water and fertilizer.
“Cash rent on an acre used to be 120% of the price of ammonia,”Stranded Wind writes, “but now it’s 50% of that $1,000. This makes the choice very simple; half of the land is left standing idle in any given growing season, accumulating water along with the improvements associated with leaving the organic matter from the weeds on the field. The financial effect is the same as fertilization only without the attendant expense and risk”
The United States supplies almost one third of the world’s wheat supply with China intermittently consuming up to ten percent of global wheat exports. Australia is plagued with the same cost prohibitive ammonia/fertilizer problem as the U.S., and since Australia and the US comprise half of all wheat exports, once those exports fall, prices will skyrocket; developing countries with be hit the hardest.
Additionally, wheat farmers across the Southern U.S. Plains are experiencing a drought. Stranded Wind issues an ominously prophetic warning: “This will lead to food riots and governments falling among the developing nations”
“Farmers can’t afford a thousand dollars a ton,”says Bryan Lutter of Producer’s Hybrids, “so they’ve cut back on ammonia. Wheat protein percentages will drop from 14% to 8%. People are going to starve”
To make matters worse, as a result of plummeting commodity prices, and the high cost of fertilizer and pesticides, farmers have cut back on planting everything! According to the Wall Street Journal, farmers are making plans to cut their production of corn, wheat, rice, peanuts, beef, pork, poultry and milk with a some farmers growing only a single crop on land they usually use to grow two crops, allowing some land lie idle for the year.
So despite the drop in commodity prices, we as consumers will pay higher prices at the supermarket. Michael Swanson, an economist at Wells Fargo & Co., said he expects retail food prices to climb 2.5% to 3% in 2009, on top of the 5.5% rise in 2008.