World Wheat Stockpiles At 25-Year Low, Thanks To Droughts, Biofuel Demand

Continuing dramatic increases in the international price of wheat have driven the production costs for bread significantly higher, according to the Irish Bread Bakers Association (IBBA), and there is no other option for the industry but to pass on some element of these increased costs to retailers early in 2007.

Last July Finfacts reported: The combination of heatwaves in Europe and the US, low global grain stocks and an increase in production of biofuels has seen wheat prices rise to 10-year highs and may lead to big increases in the cost of bread and pasta.

Poor harvests in Australia, the Ukraine, Argentina and North America have dramatically increased the cost of wheat. Prices have surged to ten year highs as world wheat stockpiles have fallen to their lowest levels in 25 years and a drought in Australia has threatened to cut its harvest in half.


Paul Kelly, Director, Food and Drink Industry Ireland, speaking on behalf of the IBBA, said: “Bread bakers are experiencing increases of up to 25% in the cost of flour, the main ingredient in bread. This is on top of increases of over 30% in the cost of gas, the main energy source in baking bread. Ireland is not unique in this regard, it is a global problem and it shows no immediate signs of improvement, if anything it is worsening.”

EDIT

http://www.finfacts.com/irelandbusinessnews/publish/article_10008552.shtml

Global grain reserves are now down to 57 days, from a high of 130 days in the 1980's. Per capita grain production is declining, and absolute grain production has plateaued. And Global Warming is just getting under way. We're so hooped.

Wheat straw for solid biomass fuel maybe - but wheat grain for biofuels???

:shrug:

If corn is becoming more expensive due to demand from ethanol production, maybe people are eating more wheat instead? Talking about biofuels would have made more sense in an article about grain in general, but in one focused on wheat it's a bit of a red herring.

Sloppy journalism - it wouldn't be the first time.

world's leading corn producer and exporter. More and more corn is being made into ethanol, and corn prices have skyrocketed.

Wheat may substitute for corn in some animal feeds, so it too may rise in price.

In addition, wheat is a starch just like corn and theoretically could be fermented into ethanol just like corn.

2006 prices are down considerably from 2004...

http://www.ag.ndsu.edu/pubs/agecon/market/ec1090w.htm

expensive, right?

Which, I wonder, is more important to the ethanol lobby?

Louis Strydom, EcoWorld
EcoWorld Editor's Note: Biofuel entrepreneur Louis Strydom reports from the Biofuels Finance & Investment World which was held in late 2006 in London, U.K. He brings some sobering macroscopic updates to our ongoing coverage of the biofuel phenomenon. One message coming from the Terrapinn conference was that the global biofuel industry is utterly dependent on government subsidies. Another was mention of the need for criteria for biofuel certification - criteria that must reach beyond the consumer and the refinery to the actual source of the feedstock.

In terms of impact on food production, sometime in 2007 world biodiesel consumption is expected to outstrip world soybean production, and also in 2007, US corn for ethanol consumption will again outstrip US corn exports. Because of land increasingly being allocated to growing biofuel, the global grain market reserves have fallen from 120 days in 2000 to an estimated reserve of only 40 days by 2008, with corn reserves projected at falling to even lower levels of 20 days reserves. With US corn, there is a significant gap between USDA projections for corn supply vs. the amount of corn required for ethanol production - requiring a further 15 million acres to be planted by 2010 just to negate this initial gap.

http://www.ecoworld.com/home/articles2.cfm?tid=412

1. Biofuels have a relatively low energy return on the energy that must be invested to produce them (see Getting a Decent Return on Your Investments also posted at www.sustainablemethow.net). This energy return is particularly dismal for corn-based ethanol, which is variously estimated to be between 1:1 (no energy return at all after spending 5 months growing and processing the corn) and 1.3:1 (30% more energy than was invested in growing and processing). Compare this to the energy return on gasoline, which is estimated to have been as high as 100:1 from the early “supergiant” fields” when they were producing freely, and is now between 30:1 and 10:1.

The best current biofuel energy returns are from sugarcane in Brazil and palm oil in Malaysia, both of which are purported to return eight times the energy invested (8:1). However, this ratio does not take into account the degradation of fragile tropical soils from intensive yearly cropping, nor how high production will be maintained once petroleum-based fertilizers, pesticides and herbicides become unavailable, nor the loss of the farmed land to other uses.

2. It is estimated that 40% of the earth’s annual photosynthetic productivity is already utilized by humans, largely for food and building materials, with most of the other 5-20 million species (the actual number is unknown) on the planet making do with the remaining 60%.2 Attempting to produce large quantities of biofuels will rapidly accelerate habitat destruction and the further demise of other species.

3. All of the best cropland on the planet is already under cultivation to produce food. Large-scale appropriation of crops for fuel will unavoidably compete with food production. For example, it is estimated that 20% of this year’s U.S. corn crop will go ethanol production rather than to food for humans or feed for livestock. As Lester Brown of the Earth Policy Institute has pointed out, “The grain required to fill a 25-gallon SUV gas tank with ethanol will feed one person for a year. The grain to fill the tank every two weeks over a year will feed 26 people.” If we turn to large-scale biofuel production, we will have to choose between feeding our cars and feeding human beings.

4. The human population continues to grow at a rate of about 1% a year, which yields a doubling time of 70 years. While almost no one is predicting that the current 6.5 billion people will reach 13 billion (because the number of children per woman continues to drop in most societies, and because there is not enough, food, fuel or water on the planet to support 13 billion people), our numbers are expected to grow to 9 billion by 2050. In addition, energy use in the U.S. and throughout the developed world continues to grow by about 2% a year. If it were possible, we would double our current 85 million barrels of oil used today to 170 million barrels by 2076. Any assistance from biofuel production would be completely overwhelmed by growth in human numbers and increasing energy use.

Do we have other options? Yes. One would be to learn live in the real world. On this particular planet that translates into recognizing that 1) energy is limited, 2) resources are limited, and 3) all habitats and ecosystems have a carrying capacity; if pushed beyond capacity for too long they collapse.

Biofuels could play a meaningful role in a society that lived with some ecological modesty. There is no real long-term option for us other than living by nature’s non-negotiable ecological rules. Nobody argues with gravity, why argue with the simple reality of a spherical, limited-in-all-directions planet? If we want our species and life in general to flourish, we will have to drive less, fly less (or not at all), buy less, build smaller homes, have smaller families, and relearn how to live local, community- and watershed-based lives.

http://www.energybulletin.net/19214.html