Center for a New American Security

Many families gathered around the dinner table this weekend to celebrate the holidays. And as they did, those preparing the food may have noticed a higher grocery bill (and those driving from out of town surely felt the squeeze from climbing gas prices). A thoughtful – and very accessible – piece in The New York Times Weekend Review offered an explanation to readers for what’s happening in “Behind the Rising Cost of Food.”

“Events both at home and internationally are conspiring to shake the confidence of eaters,” wrote the Times’ Kim Severson. “Global famine, war and disaster are no longer so easy to keep from the table.” Indeed, a number of global trends can help consumers understand the sharp increase in fuel and food prices. The price for cocoa beans to produce chocolate, for example, has been impacted in part by rising fuel prices and unrest in the Ivory Coast, “which supplies more cocoa beans to the word than any other country,” Severson noted. “While Laurent Gbagbo tried to hold onto his presidency, his rival cut off export of the cocoa crop, and prices in the United States hit a 32-year high.”

Coffee prices are up 11 percent in the last year. (“Demand for quality beans is growing around the globe, but drought — possibly the result of climate change — is limiting supply.”)  The cost of all fresh vegetables is up 10 percent. And of course, as many Americans now experiencing the pain at the pump know, gasoline prices rose 28 percent between March 2010 and March 2011.  “Domestically, wholesale food prices rose 3.9 percent in February, the largest increase on record for one month since 1974,” according to Severson.  (A The New York Times graphic depicts the change in prices for a list of commodities between March 2010 and March 2011.)

“Even the simple pleasure of a good bowl of cereal is touched by global policy shifts,” Severson wrote. “Drought hurts crops. And as the United States, China and India push for more biofuels, which require large amounts of corn, there is less grain to feed cattle and make into tortillas or Frosted Flakes.”  

Higher fuel and food prices may portend greater challenges ahead. The sharp rise in commodity food prices could generate instability in developing countries where people spend a far greater percentage of their income on feeding their families (and where instability would bode poorly for U.S. national security). And, of course, higher crude oil prices could shock the global system at a time when the global economy is still in a precarious rebound. Understanding these global trends is important, and we need to be more attune to them. They may have seemed inconsequential in years past, but as global demand for food and fuel rises and supply becomes increasing constrained, the costs of global climate change and population growth, and energy and resource consumption could be anything but inconsequential.

This Week’s Events

On Tuesday at noon, Deputy Secretary of Energy Daniel B. Poneman will be discussing “America’s Nuclear Energy Future” at the Wilson Center. Then, at 12:30 p.m., SAIS will be hosting a panel discussion on “Sovereignty in the Arctic: Avoiding a New Geopolitical Conflict.” At 5:30 p.m., don’t miss “The Impacts of Events in the Arab World on Central Asia and the Caucasus,” hosted by SAIS.

On Thursday at 1:00 pm., the Middle East Institute will be discussing “Joining the Global Oil Sector: Challenges and Opportunities for Iraq.”  Then, at 5:00 p.m. go to Georgetown University for an event on “Poverty, Climate Change and Health in the Pacific Islands.”