Sunday, August 14, 2022

Era of cheap food may be over

The world is facing a food crisis, but how can New Zealand farmers help? Rising costs mean producers here are struggling to maintain margins and production. Over the next few days, Farmers Weekly will cover key challenges within the primary sector and how some are navigating it.
South Island farm consultant Jeremy Savage says world food storage levels are currently at an all-time low.

People have become accustomed to the expectation of cheap food, South Island farm consultant Jeremy Savage said.

Around 8% of household incomes was spent on food over the past decade, whereas in post-World War Two, people spent on average around 40% of their household income on food.

“Farming’s been tough and unprofitable, it’s a commodity and are we seeing a rebalancing of the books?” Savage asked.

At a macro level, environmental and agricultural policies from governments around the world, including New Zealand in the past few years, were created in a time when food stocks were high.

“We’re now heading into a situation where that’s heading out of balance and how appropriate is that framework going forward,” he said.

Savage said he got into farm consulting after reading a Time Magazine article in 1991, which stated that around 2000 food demand would start outstripping food production.

“That article was spot on – it was about one year out. At that point we had 230 days of food stored in the world. We’re now down into the low 40s,” he said.

Countries can manage this situation if food storage levels are 45-50 days if they have the right infrastructure and technology, he said.

“What we are finding is that we are now at the point where our food stocks in the world are now subject to shocks because our stocks are so low,” he said.

While people blame the Ukraine war for this, there are other factors as well, such as South East Asian countries banning palm oil exports, he said.

Read more articles in the Food Security special report series here.

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