The world wheat market is in a state of panic after demand is quickly outpacing supply, due to failed crops and higher demand for cereals for ethanol production for fuel. Prices have reached an all time high on the Chicago commodities market, the Financial Times reports today, and this was also our top story in Foodwire.
There’s a lot to be said about this. Bread will become more expensive, but is this only a bad thing? After all, the Western world’s love for white, wheat-based bread is causing health problems, and these helath problems are being exported to developing countries where people think they’ll be happier if they switch to the white bread that the rich world is already constipating on.
However, the alternatives such as rye are becoming more expensive too, so there’s little chance that this alone will be enough to wean people from wheat-based bread and start asking for healthier dark bread instead. But there’s another dimension to the story.
While there is a quickly approaching shortage of cereals, which will also affect other products as meat and dairy since higher cereal prices mean higher feed prices an, thus, higher production costs for livestock owners, the European Union is annually handing out floods of taxpayers’ money to pay farmers not to grow anything on their lands. Many of these have already been converted for other seage, many of them irrevokably.
The inherent inertia of the system means that the EU still hasn’t managed to ask for ploughs to be put into these fallow fields anew. So while you’re paying more for you daily bread, with the other hand. you’re paying taxes to keep those food prices up (and possible to speed up a global food shortage).
Something’s wrong with this picture.