Food and oil price correlation is holding

Back in November last year I took the ten most recent years of world Food Price Index data from the UN Food and Agriculture Organization (FAO) and the monthly average oil price from the US Energy Information Agency (EIA), and plotted them together. I'd never seen this done before, and I was interested to know if there was any correlation. Here's the graph:



I noticed that the graph seemed to hint that a new rise in oil and food prices was about to begin.

It's now May 2011. I wanted to re-do the graph to check whether the correlation is holding. If anything, it's getting a bit stronger. The sharp rise in food and oil prices that the previous graph hinted at in November has in fact materialized over the last six months.

http://www.energybulletin.net/node/5045

Why Our Food is So Dependent on Oil
by Norman Church
"Concentrate on what cannot lie. The evidence..." -- Gil Grissom

INTRODUCTION

“Eating Oil” was the title of a book which was published in 1978 following the first oil crisis in 1973 (1). The aim of the book was to investigate the extent to which food supply in industrialised countries relied on fossil fuels. In the summer of 2000 the degree of dependence on oil in the UK food system was demonstrated once again when protestors blockaded oil refineries and fuel distribution depots. The fuel crises disrupted the distribution of food and industry leaders warned that their stores would be out of food within days. The lessons of 1973 have not been heeded.

Today the food system is even more reliant on cheap crude oil. Virtually all of the processes in the modern food system are now dependent upon this finite resource, which is nearing its depletion phase.

The systems that produce the world's food supply are heavily dependent on fossil fuels. Vast amounts of oil and gas are used as raw materials and energy in the manufacture of fertilisers and pesticides, and as cheap and readily available energy at all stages of food production: from planting, irrigation, feeding and harvesting, through to processing, distribution and packaging. In addition, fossil fuels are essential in the construction and the repair of equipment and infrastructure needed to facilitate this industry, including farm machinery, processing facilities, storage, ships, trucks and roads. The industrial food supply system is one of the biggest consumers of fossil fuels and one of the greatest producers of greenhouse gases.

Even more fossil fuels are used - natural gas for fertilizers, crop drying and electrity, and coal for yet more of the electricity used by farms.

The amount of oil used in the food system probably accounts for the tight coupling of prices, along with similar patterns of investing in the commodities of food and oil.

As it is a significant factor in production.

This is one of the reasons I was so freaked out when I learned about peak oil and why high oil prices don't bother me if it compels us to move away from using oil. We need to transition everything away to prepare for the future. Or we can't support everyone.

As soon as I found out about Peak Oil I thought, "Oh shit, the food..."

Because we're not that far from being a planet without petroleum.

:shrug:

It's been a fun epoch, lots of toys and fun!

The trip down from Hubbert Peak is gonna be terrifying.

http://en.wikipedia.org/wiki/Hubbert_peak_theory





:patriot:

The population of the planet in 1800 was about 1 billion, the population in 1900 was about 1.65 billion.

I expect that we will return to those sorts of levels, plus or minus, within the next hundred and fifty years. On the plus side of the ledger, we have much better scientific knowledge than we did a century or two ago along with a deep reservoir of technology. On the minus side a lot of the land is degraded, the oceans are acidifying and fished-out, and rainfall patterns are shifting because of global warming. I expect that those influences could more or less balance each other out, to leave us around 1 to 1.5 billion over the long haul.

:grr: