Global Grain Production vs. Direct Global Grain Consumption

While we observe North Korea go through its perpetual cycle of low food acquisition and starvation, it is important to recognize that the global system as a whole has been having circulatory problems in the grain market in the last few years.

Despite all the climate-related shocks in this new decade, research showed that global grain production is expected to reach a record high of 2.4 billion tons in 2012, an increase of 1 percent from 2011 levels.

However, it was production for animal feed, growing 2.1 percent from 2011, that saw higher production than grains production for direct human consumption which only grew 1.1 percent.

Furthermore, corn production in the United States, which was expected to reach 345 million tons in 2012, fell far short of its goal – now experts estimate that only 274.3 million tons will be brought in, a 13 percent decrease from the 2011 yield.

2011 breakdown of consumption of grain used for food:

Total, 571 million tons (International Grains Council)

  • India, 89 million tons consumed
  • China, 87 million tons
  • United States, 28 million tons
  • rest, 367 million tons

As is well known, the world utilizes much of the grain produced for animal feed and other areas of indirect consumption; in aggregate, this represents large waste in energy, lost both in the transfer from grain to meat and in the extra infrastructure (such as transportation) needed to support the transaction.

This enormous loss is inevitable as the market always seeks to satisfy the demand of the highest bidding consumers – nonetheless, this disparity adds to shocks in grain prices when production drops due to unexpected circumstances such as drought or other meteorological phenomenons. Under these conditions, it is the most vulnerable who are invariably affected. Malthus’ simple equation falls on its face here – it’s not that the world is not producing enough grain for its population, but rather it is that a series of intertwining conditions including income disparity, taste and expectations have created a situation where efficient grain distribution is severely disrupted.

The Food and Agriculture Organization (FAO) of the United Nations noted that by 2050, 10–20 percent more people will be subject to hunger based on the changing climate’s effects on agriculture with 24 million more children expected to be malnourished. Children, especially unborn children above other demographic groups, constitute a serious challenge to the global community as trauma in early development creates long term socioeconomic issues.

According to Danielle Nierenberg, a Worldwatch senior researcher and Nourishing the Planet project director, recent events show

the need to reduce price volatility, move away from fossil fuel-based agriculture, and recognize the importance of women farmers to increase resilience to climate change

Indeed, that is the general direction the world should be going; however, it is difficult to alter the vast demand for meat consumption throughout the world, especially when it has, since the end of the Second World War, become entrenched in the culinary culture of so many nations – to satisfy this demand, enormous resources will need to be expended, including fossil fuels, and this will prevent prices from coming down to a level that is capable of accommodating everybody.

This is a serious problem that is rarely given enough traction in global discourse – it’s no longer a mere problem of production – although more efficient, less fossil-fuel dependent means do need to be found – the distributive power of the market has gone berserk somewhere. Finding the error should be on the top priority list of every state and institution – hopefully before we have to add 24 million starving children to the list of victims of the dysfunction.


About Yong Kwon

I develop trade advocacy strategies for a DC-based consulting firm. Studied economic history at the London School of Economics, and can be found on twitter at @ykwon88
This entry was posted in Rice and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s