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Food prices hit new record

Written By: - Date published: 7:10 am, January 7th, 2011 - 67 comments
Categories: farming, food - Tags: ,

With oil heading back to $100+ a barrel, food prices are also rising. That makes sense, fuel and fertiliser from oil are major food production costs. The global food price index is now higher than it was in 2008. In New Zealand, we’re supposed to celebrate high food prices but the reality is it means starvation and social unrest around the world.

As with oil, food production may be about to peak. Global production capacity has not risen as fast as demand, leaving a smaller and smaller cushion of extra supply. That makes even small shocks to the system more important because it only needs small interruptions to create shortages.

The Russian drought that slashed its grain exports, while the Queensland floods will reduce the amount that it produces too. Higher oil prices raise the cost of producing any food, especially when the land is enriched with artificial fertilisers derived from crude.

The UN reports that its global food index is now higher than in 2008, when there was major unrest over food prices in a number of developing countries. This time round, the reaction has not yet been so bad, partly because the food price index is in US dollars which has been falling, so prices in other currencies aren’t yet at those record levels. But trouble is already brewing – 13 people died in protests in Mozambique after the government tried to rise the subsidised price of bread.

We’re lucky that, so far, the price of rice – stable to half the world – has remained relatively low but that may be about to change with a poor harvest predicted for Thailand. If rice prices surge too, expect unrest to spread.

All these prices are telling us is that there isn’t enough to go around.

The rational thing to do would be for Westerners to stop feeding their cows grain or turning it into biofuel to decrease demand (from memory, a third of the world’s grain crops go to feeding animals and biofuels is a rising percentage). Instead, demand will be decreased by pricing the world’s poor out of the market, at which point they starve. Globally, severe malnutrition has skyrocketed since the Great Recession began and it will only get worse. Fortunately, many third countries subsidise the price of a staple grain for their population (ignoring the dictates of the WTO and IMF that they let the market decide) but there’s a limit to how much poor countries can afford to subsidise while prices rise.

Peak oil, along with a myriad of problems like desertification, climate change, and nutrient loss, are making it very difficult for global food output to expand, yet there are world’s population keeps growing at 200,000 a day.

There are solutions and it comes down to making sure the world’s poor get fed before the animals destined for the wealthy’s dinner tables. Perhaps a global grain dole – paid for collectively by the world’s governments at market price – that ensures everyone can get their needs of these staples. That way, you preserve the price signal to encourage more growing while not pricing humans out of the market and into starvation, resulting in a healthier, more peaceful population. Hell, it worked for the Romans.

Btw, as a food producer that doesn’t feed its livestock on grains, this is good for New Zealand as a whole despite the higher food prices we face – as long as a the profits from farming remain in New Zealand. Yet another reason not to sell our most basic asset – good farmland – overseas.

67 comments on “Food prices hit new record ”

  1. Ed 1

    On National Radio yesterday we were told that that rising prices, in particular those for dairy, will be of great benefit to all the country, although it may mean that some find it more difficult to buy food . . .

    Perhaps that can be at least partially fixed by reducing the minimum wage so that shops can keep prices down . . .

    • Marty G 1.1

      yeah there’s a solution – food’s too expensive, so let’s reduce the income of the poorest workers. That’s just the help they need to meet those rising food bills.

    • Ly 1.2

      Are you serious?! Or maybe we could look at profit margins and/or GST on food items. People on the minimum wage are struggling enough already, why would you want to disadvantage them even further?

    • LynW 1.3

      Are you serious?! Or maybe we could look at profit margins and/or GST on food items. People on the minimum wage are struggling enough already, why would you want to disadvantage them even further

      • Marty G 1.3.1

        don’t worry 🙂

        i was confused too but checked Ed’s other comments and he’s being ironic.

        • LynW

          Thanks for that clarification Marty G…still trying to get my head around who is who on this site and individual styles of commenting.

          • Maynard J

            It’s easy – either they are a sensible leftie being sarcastic, or a RWNJ being true to form.

        • Jenny

          There is nothing sadder than that nice man who has $50 million in the bank. He urgently needs psychiatric help, before he is found wandering around the streets or sleeping under bridges in his stated misapprehension “that there is no money”.

          Like rain on your wedding day

          Like a fly in your chardonay

          It’s just ………

          capcha – “full” I bet.

  2. BLiP 2

    Eat the rich.

    • Bright Red 2.1

      well, they’re (ie we’re) doing all the eating at the moment.

      apparently about a third of food used in the West is wasted too.

    • jpwood 2.2

      There aren’t enough of them and they have a higher proportion of fat to muscle, it would be more nutritious to eat the poor. Anyone on WFF ought to be given the option of selling their fourth child for slaughter.

      • jcuknz 2.2.1

        I wonder how many of these ironic comments will come true in the future …. whatever ….
        I thought the report on what federated farmers said this morning about how good rising food prices would be for NZ rather missed the point that it may not last, our ability to grow it in view of weather/climate changes seemingly on the horizon.
        Still it appeared to be a good news story to raise people’s spirits as they face another year of work instead of part-drowning in the annual Christmas floods.

    • Lyn 2.3

      Think I got it this time….definitely not an entry by Hannibal Lecter!

  3. Bill 3

    Yes, climate change and harvests and oil prices have an impact on food prices.

    But the price hikes in Mozambique occured at a time of relatively low oil prices. And the world is on track for one of the biggest wheat crops of all time (Russian harvests haven’t had that much of an impact).

    There’s an elephant in the room that’s having a fairly major impact on food prices. Speculators.

    • Bright Red 3.1

      ‘And the world is on track for one of the biggest wheat crops of all time’

      with the global population growing 1.2% a year, setting a record for food output isn’t an achievement in itself. It’s the ability for production to meet rising demand that matters.

      it’s kind of like how Key and co say ‘we’re spending mroe than ever on health’ – true but are they spending more per person (and after inflation)?

      • Bill 3.1.1

        I get that a rising population requires increasing amounts of food. What I’m saying is that the impact of ‘food for bio-fuels’ and climate change and regional crop failure leading to export bans plus the rising price of oil do not account for or explain rising food prices at this point in time.

        The food riots of 2008 were widely reported. The continuing food riots in 2009 and 2010 weren’t. And that has led us to believe that 2008 was somehow different from the two following years when the fact of the matter is that 2008 never really ended for many.

        During that time, oil prices dropped and harvests came in much as normal. So rising oil prices and failing harvests don’t explain the high price of staple foods. As an aside, I recall suggestions that populations be encouraged to switch to potatoes over rice or wheat etc. Since potatoes are subject to all the other variables mentioned both in this post and in most recent articles I’ve read on this front, you have to ask why it would be that potatoes would stay cheaper than other staple crops.

        The common thread that runs through recent years is that speculators have been treating food as a commodity and gambled on future prices. I don’t know why they haven’t moved into potatoes, but that’s what marks the crucial difference between the price of that staple and the others.

      • Bill 3.1.2

        Further to that last comment, here are some figures. (article link at bottom of comment)

        When Goldman Sachs, Deutchbank and Merril Lynch got into ‘futures trading’ in food at the end of 2006, within twelve months the price of the staples they were trading in went up by the follwing amounts

        Wheat +80% (while demand fell by 3%)

        Rice +320%

        Maize +90%

        The price of potatoes, millet and cassava didn’t rise in anything like the same extent. But they weren’t subject to speculative trading.


        • Bright Red

          speculation is destructive but it is driven by underlying causes. The speculator believes that an end consumer will be unable to get the product cheaper in the future than the price the speculator can buy now.

          Demographics (empty nesters with a whole lot of money looking to build their retirement assets quickly) and global trade imbalances (creating a credit glut from China etc, that led to low borrowing costs here) drove the speculative housing bubble.

          Food speculators think that supply is going to be tight in the future, raising the price.

          of course, speculatation itself boosts the price – by increasing the amount of money available to buy the product without increasing the supply – and can set off speculative bubbles, which are kind of like pyrimad schemes – each speculator buying in the hope another speculator will be willing to pay more later.

          • Colonial Viper

            The speculator believes that an end consumer will be unable to get the product cheaper in the future than the price the speculator can buy now.

            You are talking about old style speculation where people hoard the actual commodity, or speculate on the derivatives which have a direct connection to the price of the underlying commodity. Corn futures for instance, which are essentially contract requirements to buy corn at a certain price.

            Today, the big money in speculation is in advanced financial instruments which may only be remotely and indirectly connected to the price of the actual commodity. For instance, you might have an instrument designed to offset the losses from either an increase or decrease of option prices to buy corn futures. (Head spinning yet?) The value of that instrument can change very rapidly depending on the level of speculative activity occurring beneath it.

            People who trade hundreds of millions through these kinds of complex derivatives aren’t interested in the corn market at all, its just another financial arena to play in and make bucks.

            And when they play with these instruments with big sums, it is hard to predict how they will affect the real economy i.e. the price of corn in a town market feeding the people there.

            My opinion: this highly financialised speculative economy needs to be firewalled off from the real economy effectively and thoroughly, because when you don’t, people with nothing to do with the game get real hurt in the real world.

            • Draco T Bastard

              My opinion: this highly financialised speculative economy needs to be firewalled off from the real economy effectively and thoroughly, because when you don’t, people with nothing to do with the game get real hurt in the real world.

              IMO, it should be made illegal and the people doing it thrown in jail for life.

        • Zorr

          Funny thing Bill. It used to be illegal in the US to speculate in the commodities markets. But that was many moons ago and they are unlikely to wind the clock back to more sensible times.

          • prism


            It used to be illegal in the US to speculate in the commodities markets. But that was many moons ago and they are unlikely to wind the clock back to more sensible times.

            What about “survivable or sustainable” times.

            captcha – phrases

        • Bill

          @BR and Z

          So we agree that speculation is a contributing factor to the rise in staples. That contribution, (never mind the extent it) is being roundly ignored in favour of attributing rising food prices to ‘unavoidable’ or ‘natural’ phenomena. And that constitutes a major failure in news reporting if news reporting is meant to aid understanding that might in turn lead to or inform meaningful action on the things being reported.

          Meanwhile, Bill Clinton has apparently done a bit of a mea culpa for allowing deregulation on the wheeling and dealing around food staples. Big of him, innit? Wonder how many bellies his guilt will fill?

    • Lanthanide 3.2

      Isn’t there a huge wheat rust problem that is poised to devastate global production within 5 years as it spreads around? Or has that been conquered now?

      captcha: significant

  4. Lanthanide 4

    Actually oil isn’t used to create fertiliser, natural gas is. And natural gas is currently on the upswing in production due to new technologies tapping previously unavailable reserves – ‘shale gas’ in the US has created a massive glut on the market and IIRC prices are now lower than they were 5 years ago. As a result there has been serious talk of converting the US fleet to run on natural gas instead of oil because they can produce it locally.

    This is a good site for debunking a lot of peak oil myths, although he is fairly hostile: http://peakoildebunked.blogspot.com/2005/08/28-isnt-fertilizer-made-from-crude-oil.html

    Also see http://peakoildebunked.blogspot.com/2007/11/314-peak-oil-and-fertilizer-no-problem.html where he makes clear that fertilisers can be made with any electricity source, although obviously when we’re concerned about the price of food, this’ll result in higher fertiliser costs.

    • Blighty 4.1

      gas and oil prices are highly correlated. there was a huge price spike in gas at the same time as the last oil shock.

      Although there’s a temporary glut, gas is well on the way to its own peak.

  5. Craig GlenEden 5

    I have just been in Australia and what shocks me is how much cheaper their groceries are compared to ours especially diary and meat. A 1kg block of Mainland cheese was $10.00 Aus convert it to 12.50 or 13.00 depending on the exchange rates and its still way cheaper than NZ. Meat is the same 7.90 for a KG of mince in Australia.These products where all bought at Woolworths as well so not some discount farmers market We are being ripped no wonder people in NZ are struggling.

    The other thing of interest was billboards saying “Stuff the Banks” it seems Westpac are making more than healthy profit in Australia as well.

    • Lanthanide 5.1

      I don’t know where you do your shopping, but I don’t buy cheese unless it’s less than $10 kg, which in most weeks there is at least one brand going for that price. Mainland is generally much more expensive but does ocassionally go for $10 as well.

      I also buy mince at $6.90 or $8.90 kg fairly regularly when it’s on sale, and that’s $NZ not Aus.

      Now if you’re saying these are the *regular* prices, then I’ll accept that it’s cheaper. But it’s certainly possible to meet or beat these prices in NZ on a regular basis.

      • Craig GlenEden 5.1.1

        Yup regular prices Lanth no specials.Thats tasty cheese to, which is always more expensive. I am comparing apples with apples not farmers market with supermarkets, not a low priced cheese to a higher quality one. Same brand, same type of cheese. My point is we are being ripped we are meant to be the world leaders in beef and dairy production. We always get the argument its because of international demand/price well what I am saying is this is bullshit.

        Same with cell phones NZer’s are being ripped. AS for the Banks though they just make record profits even when everyone else is suffering.Cunliffe should keep up the pressure on these bastards because they need a big tune up.The Aussie Government seems set to legislate them more and so should we.

      • bbfloyd 5.1.2

        bit of a wasted apologist comment there lanth.. especially as you acknowledge the real point being made…

        and 1kg of mainland tasty cheese going for $10.00? where? i’m keen to know where i should be shopping…

        i have been talking to friends in australia regularly. and we compare prices occasionally, and the reality is that, in the last two years our food bills have gained on theirs at an accelerating rate. to try to pick out two items which can occasionally be bought on “special” is the sort of thing i would expect from an english, or bennett, but not from someone who apparently lives in the “real” world.

        • Lanthanide

          I have bought it a couple of times in the last year on special for $9.99 at Countdown, although I buy edam, on one of those occasions I know that it also included tasty.

          “to try to pick out two items which can occasionally be bought on “special””
          If you want mainland cheese specifically, yes, that is ‘occasionally’ on special for $10/kg, but other brands of cheese regularly cost that much. I’ll admit that mainland is generally the best quality, but some of the others are not far off it. Mince is regularly on special for that price.

          ” is the sort of thing i would expect from an english, or bennett, but not from someone who apparently lives in the “real” world””
          I only buy cheese and mince when it is on special, so those are the prices that I pay. So I am living in the real world, thanks.

          • bbfloyd

            my point was that picking out two items from the total of what constitutes a complete diet does not constitute a rebuttal of the fact that food is getting more expensive by the week. neither does it counter the statements i am hearing more regularly, that the pace of the increases is accelerating.

            i would assume that most people would wait for specials before buying anything if they could help it. that would be normal. what isn’t normal is people not buying basic food items at all unless they are discounted.then they buy as much as money/storage space will allow. i have friends who have resorted to this tactic recently. now why would they do that if food wasn’t getting, along with basic utilities, more expensive?

            • Deborah Kean

              I have not bought cheese for years! And also “people not buying basic food items at all unless they are discounted.then they buy as much as money/storage space will allow” is what I do..
              Have to! 🙂

  6. randal 6

    hey dudes this is progress.
    build up as much demand as you can and then the devil take the hindmost.
    and he will.
    there are no easy answers to this one.

    • Draco T Bastard 6.1


      The world is massively overpopulated and there’s only one solution to that and nobody will even suggest it. A worldwide ban on pregnancies.

      • Colonial Viper 6.1.1

        Ban on pregnancies? Hmmmm too late, China already did that. Decades ago.

        • Draco T Bastard

          No they didn’t. They limited births to 1 per woman which helped but didn’t stop population growth as people in the far provinces were, and are, having multiple children.

          • Colonial Viper

            You are correct, but the Chinese Government has gone far further than anyone else, and done it for years, and done it pretty effectively (if occasionally inhumanely) – especially when you take into account that low income countries tend to have very high birth rates.

            I am guessing that China’s population today is 250M-300M less than it would have been without this policy.

            Not bad as far as these things go. Its been sufficient to make a dent in global population growth.

      • Lanthanide 6.1.2

        I read a short story where some eco-terrorists genetically engineered a version of the common cold that was extremely virulent, it also had a side-effect of causing a woman to ovulate all of her eggs at once. In the story, 95% of the world’s population was infected by it before scientists worked out what it was doing. After that, the pregnancy rate dropped through the floor, just as they wanted – the ultimate solution to over-population without having to kill anyone or deal with a messy political situation.

        • Puddleglum

          Interesting to hear that story has already been written.

          I had a similar idea (for a story) about ten years ago and, in thinking it through, realised that economic and social chaos would ensue almost immediately. The first to be ‘hit’ would be all those who provide ‘maternity services’ and products for pregnant women, quickly followed by staff in, and suppliers for, maternity hospitals, then all those who provide products and services for newborns, then ‘childcare’ facilities, then all the toy industries, then schools …

          No doubt the ‘economy’ would start to shift towards providing for the already living humans but probably not fast enough to avoid a lot of suffering, and to produce a glut of workers for the remaining non-child related industries and consequent reduction in wages across the board. Children are one of the greatest direct, and indirect, sources of consumption. Even a year or two hiatus in the production of new consumers (and future workers) would create havoc. Imagine the rapid turbo-charging of industry lobbying of government that would kick in immediately.

          I predict that in that situation it wouldn’t take long before governments took a very hard line on anyone ‘abstaining’ from being involved in becoming pregnant. The myth that we all have ‘free choice’ in liberal societies would very quickly be shattered. Our choices – taken in the aggregate – are only allowed to be ‘free’ so long as we make choices that favour economic activity and do not jeopardise it.

          • Lanthanide

            Yeah, the short story itself ended within days of the scientists working out what was going on, and the terrorist group laying out all the details themselves, as short stories are wont to do.

            It was also a bit unrealistic in that the disease managed to infect almost everyone on earth within the course of a couple of weeks. There are many millions of people living in remote areas, especially Africa, that simply don’t have contact with other people often enough for that to happen. On the other hand, getting say 70-80% of western countries’ population within a couple of weeks is feasible, but then again the demographics show that the population of western countries is stable or gradually declining anyway.

            If you want a movie based around similar themes, but set 20 years after the ‘no pregnancies’ event, see Children of Men: http://www.imdb.com/title/tt0206634/ One memorable part is a maternity nurse who talks about how her job ended, amongst the ruins of a primary school. Another big social change is the widespread use of legal euthanasia medication, and the cult of celebrity that springs up around the ‘youngest’ people in the world (the youngest of whom is assassinated during the movie, so the mantle of ‘youngest’ moves to a woman).

            • Deborah Kean

              A movie that IMO, bears little or no relation to the (very depressing) book which I have just read…

      • Deborah Kean 6.1.3

        Point is, that New Scientist were getting all aerated in 2008, about *falling population”! (In developed countries of course.)
        I am of the firm belief that if capitalism could be induced to pull its horns in, everyone in the world could be fed. All it takes is the will, not the won’t.
        When we (people in developed countries waste more than some 3rd World people get in a year, and it’s all relative, remember… to some people my UB of $187.50 a week is ‘bloody luxury” and as Delirious? sing “but still my Chinese takeaway/could pay for someone’s drugs” in a song about AIDS, then how on earth are you going to persuade an Asian peasant woman that she should give up her chance of ever having a baby so you can feel comfortable?
        captcha ‘necessitys’ (That physically hurts… there ain’t no such word!)

  7. Sanctuary 7

    With these booming food prices, what happened in Ireland may be a warning to us all here in New Zealand. In 1782-83 Ireland suffered a famine, and the local administrators showed common sense and banned food exports, averting a disaster. Local mechants hated the ban, but the government of the day over-ruled them.

    By 1845, free market mania was the fashion de jour and when famine again came to Ireland, the British government did nothing to stop food exports. Whilst Irish food exports (and the profits to their absentee Ango-Irish landlords) continued or even increased, one million humans beings starved to death, there was cannibalism, and millions more fled their own homeland. The British government blindly believed that the market and charity would provide – and when it didn’t, they simply denied it. Sound familiar?

    Does anyone here really doubt that the managers of foreign owned dairy farms wouldn’t willingly step over a starving Kiwi to send their last litre of milk to be exported by Fonterra if free marketeers like Don Nicolson, cheered on by compliant media hacks like Fran O’Sullivan, willingly carted in Tony Friedlander’s trucking associations trucks, and backed by a willing Tory government’s police force, were allowed their way?

    • Draco T Bastard 7.1

      The British government blindly believed that the market and charity would provide – and when it didn’t, they simply denied it. Sound familiar?

      Sounds like what this government is doing.

      Does anyone here really doubt that the managers of foreign owned dairy farms wouldn’t willingly step over a starving Kiwi…

      I suspect the foreign owned company, and probably a few NZ owned as well, will quite happily call upon the government to remove any Kiwis standing between them and profit. I’m also quite sure that a NACT government will do so.

  8. Colonial Viper 8

    The rational thing to do would be for Westerners to stop feeding their cows grain

    Yeah that’s why some NZ dairy farmers have started feeding their herds tapioca and palm kernel.

    You gotta wonder what goes into your milk these days.

    • Clarke 8.1

      You gotta wonder what goes into your milk these days.

      “Made with 100% Pure New Zealand greed!”

  9. Blighty 9

    a good article on the issue


    “The economists’ model of increasing supply as demand grows may be breaking down. Supply cannot keep up with factors such as biofuels and the urbanisation of China. Some 30 per cent of all water used in agriculture comes from unsustainable sources.”

    “The interplay of rising fuel prices, the growing use of biofuels, bad weather and soaring futures markets drove up the price of food dramatically in 2008, prompting violent protests in Mexico, Indonesia, Egypt, Cameroon and Haiti. Last year’s spike was provoked mainly by the freakish weather conditions in Russia and Ukraine, but one of the underlying trends is the growing and changing appetites of east Asia.

    As more Chinese enter the middle classes they tend to consume more poultry and meat, just as Westerners did at a similar stage in their economic progress. However, meat and poultry husbandry consumes at least three times the resources that grains do, while the drift towards the cities in China is reducing the yields of its farms. Similar trends are visible in the other fast-growing, populous nations such as Brazil, India and Indonesia. “

  10. Draco T Bastard 10

    There are solutions and it comes down to making sure the world’s poor get fed before the animals destined for the wealthy’s dinner tables.

    Won’t work. You can’t cure world hunger by increasing the global population. Hell, I knew that when I was 8.

  11. belladonna 11

    The answer to these problems is simple – go vegan.

    • Lanthanide 11.1

      That’s no an answer at all. Vegans still eat food that require fuel to grow and transport.

      If you mean “everyone in the world go vegan” then yes, that would be a solution. But of course it isn’t going to happen.

  12. Irascible 12

    Here’s the answer to the problem of higher food prices in the developing world.

  13. Sanctuary 13

    We all know the answer – much less people. But how to get there? Ah, now THAT is the Conundrum that faces us all.

  14. Drakula 14

    Well Belladonna I havn’t quite gone vegan but I don’t buy meat and fish, in fact reading what is going down I think that things could get really ugly.

    I would suggest you all keep a special eye on the price of fish (which used to be my source of protein and low cholesteral) especially tinned fish.

    When I was last shopping at Pak n Save a few weeks ago I got the shock of my life; there were only two brands of tinned fish Pams and Sealord.

    The price had increased a lot in the last few years Pams tuna chuncks 185g is now over a $1.95 a few years ago you could get it under a $1 on special.

    Now google Foreign control Watchdog http:www.converge.org.nz/watchdog and read the petition appeal ‘Fishy Goings On’ by Chas Muir.

    Now you will realise how sick the NZ and the world fishing industry really is and how the seabeads that were once living ecosystems are now sea desserts thanks to deep bottom trawling.

    I think that the real prospect of starvation in this country could be averted by a ‘food revolution’
    digging up the front lawn and converting that into vegitable production.

  15. ak 15

    The Spirit Level spelled out what we knew all along

    Inequality = woe.

    And to go macro, the horrible facts:

    40,000 perfectly-formed children die every single day for want of a crust, while

    diet/exercise (too much food) is the leading preventable western killer. (double durries)

    They starve as we gorge to death

    That’s the Big nub, folks.

    (Hey, Cactus Kate, a hundred died as you read this, and slashed a whole race, with pseudo-concern)

    Live and let die


    Don’t let the facts get in the way of our gut

    But History says

    Something will

    and the guts say soon.

  16. Food Riots already (in Algeria):

    The riots have been linked to rising food prices, housing shortages, and wider social and political grievances. http://www.bbc.co.uk/news/world-africa-12134307

    ALGIERS: Riots over rising food prices and chronic unemployment spiraled out from Algeria’s capital on Thursday, with youths torching government buildings and shouting “Bring us Sugar!”

    warnings of more to come:

    The world may face social unrest including food riots in April as grain prices increase, said Philippe Chalmin, an economic adviser to the French government. http://www.businessweek.com/news/2011-01-07/world-risks-food-riots-as-grains-climb-economist-chalmin-says.html

    but Federated Farmers is happy:

    Higher global food prices will have a positive flow-on effect for the New Zealand economy..

    The United Nations’ food price index shows the cost of basic foods, including meat and dairy products, oil, sugar and cereals has gone above its previous peak in 2008, when there were food riots in some developing countries.

    Federated Farmers’ dairy chairman Lachlan McKenzie says international dairy prices rose 7.1% in December, driven by demand from stronger economies around the world.

    Mr McKenzie says almost 70% of New Zealand’s income is from food exports, so higher prices mean everyone will be ultimately better off.

    However, he acknowledges that prices in local supermarkets are likely to increase due to stronger export demand.

    The ANZ-National Bank’s head rural economist says higher food prices internationally will allow farmers to start paying off debt

    • Descendant Of Smith 16.1

      “The ANZ-National Bank’s head rural economist says higher food prices internationally will allow farmers to start paying off debt”

      But no doubt will be insufficient for them to pay their workers more so that they (the workers) can afford the very food they are producing.

  17. Jenny 17

    If Goff wants to romp home in the elections this year.

    Immediately announce that a Labour Government would reverse the 15% rise in GST.

    And also publicly announce, that to replace the resulting hole in the accounts, a Phil Goff, Labour led government will introduce a universal Financial Transaction Tax on the banks, targeting financial speculation.

    And explain why.

    In fact Goff would be forced to strongly explain why – due to the resulting screams of outrage from the banksters and financiers and other financial speculators who currently operate completely tax free.

    Filling up the government coffers while lowering food costs, if explained and championed vigourously, would be very attractive to Labour’s core constituency.

    And having to publicly counter the screaming headlines in the media, from National’s big business backers opposing these policies, would do a lot to lift Phil Goff’s media profile with the swing voters, and depending on his ability to forcefully put the argument of the justice of such policies, win this section of the electorate too.

    • Jenny 17.1

      Hi Marty,

      Another reason why the next incoming government needs to rein in the speculative economy market economy currently being championed by our foreign speculative trader Prime Minister and his government: This from Charles Hugh Smith, of two minds.com.

      the world financial crisis in four charts

      “Though the complexities may appear endless, the global economy’s coming implosion is really fairly easy to understand: here are four charts which do the heavy lifting. It boils down to these basics……..”

      Charles Hugh Smith

      If the media’s reports on house prices are to be believed, New Zealand seems to have flipped back into chart two: “A Speculative Economy (Bubble)” . However, chart three (A hangover economy) is more like how it is for the rest of the world’s economy, i.e. people doing productive things to earn money other than flipping over-priced leaky shacks to each other for a cut of the action. I wonder, will the real estate bubble finally burst here too?

    • Drakula 17.2

      Jenny; I agree with your suggestions to Goff 100% so why hasn’t he put forward such suggestions?

      I will tell you why; he is just as much a neo-liberal Friedman zealot as the Nationals, they (Labour) will only keep essential social services as a safety net while eliminating tarrifs and bringing in foreign investors at the expence of home industry.

      I was a Labour supporter a long time ago, but no more I don’t even know why they call themselves Labour or even sport a red flag; it is absolutely meaningless.

      If you want a party to act on your desire for a fairer taxation system like the FTT, TOBIN Tax and Capital Gains Tax with less GST then I suggest you pitch it to the Green Party, Allience and Socialist Aotearoe.

      You will get a much more sympathetic hearing!!!!!

  18. john 18

    Extreme weather events help drive food prices to record highs.

    As ClimateWire and SciAm explains,”world food prices hit a record high in December thanks to crop failures from a series of extreme weather events around the world“:
    Wheat, for example, bludgeoned by Russia’s wildfires, the heat waves in Australia and flooding in Pakistan, saw massive price surges last fall.

    “Given the association of extreme weather and climate events with rising global temperature, the expectation of new record high temperatures in 2012 also suggests that the frequency and magnitude of extreme events could reach a high level in 2012. Extreme events include not only high temperatures, but also indirect effects of a warming atmosphere including the impact of higher temperature on extreme rainfall and droughts. The greater water vapor content of a warmer atmosphere allows larger rainfall anomalies and provides the fuel for stronger storms driven by latent heat.”

    Climate Change and rising Oil prices are driving down the availability of food while World population continues upwards.
    Refer link:

    • Deadly_NZ 18.1

      WTF is an extreme weather event????


      Nope nothing about the weather in there.
      NO such thing.

      Bloody yanks and their way of making the bad sound worse.

    • Drakula 18.2

      John; you are right global warning and the increasing scarcity of oil will lower the availability of food and therefore the price will go up.

      I have no argument with that, but tell me this; why is that the government are increasing GST on food and related commodities?

      Don’t you think that this would exascerbate the situation?

      And as viper said this is where speculators get in on the act and once that happens thing get really ugly.

      The food shortage will even effect the vegans once they start specularing on wheat.

      These are the short term issues that need to be addressed immediately and there also needs to be an international initiative to contain the worlds population for the future security of the world.

      But that’s OK Key is on his holiday in Hawaii and shoul the Nats lose in the next election he doesn’t want to be the leader of an opposition, he would find it too restrictive and negative.
      Not his style!!!

      That’s what I call real dedication!!!!!

  19. of 10800–10850 votes

    86% said they are worried about rising food prices

    on a herald website poll.

  20. Sophia 20

    I’m trying to save every cent every time I shop by using an iPhone app “buysmart” to calculate and compare the unit pricing and how much I save each time. I’m happy to be able to save couple of $ every shopping now.

    [lprent: looks like spam, but it does appear to be local so I’ll assume it isn’t (for the moment). ]

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