Sunday, September 26, 2010
LIVING OFF GLOBAL COMMODITIES
We heard a couple interesting statistics and stories recently that spawned some thoughts on global commodity markets. The first story had nothing directly to do with agriculture. An economist was talking about what impact proposals that would increase domestic oil drilling would have on oil prices. The economist made the point that no matter which course we took oil would remain a global commodity product dominated by OPEC. In other words, talking about increasing domestic production by 5 or 10% of domestic consumption missed the reality that there is no domestic oil market; rather, the U.S. is just one piece of a global market. Americans would make an impact on domestic prices only insofar as we could make an impact on global production, because domestic prices are determined by and are a part of a globalized market. Of course, that's just one small part of the story of American oil use, but it got us thinking about parallels in agriculture. Corn and soybeans and wheat and cotton are similarly global commodities nowadays. Of course, not all corn and wheat are part of that global market -- the wheat we grow for ourselves or the heirloom cornmeal we've sold at the farmers' market are anything but global commodity products -- but the overwhelming majority of corn and soybeans and wheat grown in America are bought and sold into the same global market that China and France and Zambia and Brazil belong to. Wheat prices are high in America right now in part because of wildfires in Russia. That's true even if you're buying commodity wheat from a farmer half a mile down the road, because that transaction still takes place in the context of a global market. With all that in mind various stories and tidbits we've heard recently about Brazil particularly intrigued us. One story was about the low cost of production for an Irishman farming commodity crops on several thousand acres in Brazil. Eric hadn't even realized that soybeans could be grown in Brazil's climate, and then we find out that Brazil recently overtook the United States as the world's leader in soybean exports (and was already the world's largest beef exporter.) We remember ten or twenty years ago when saving the rain forests was as prominent an issue as global warming is today -- the kind of thing elementary school children everywhere were teaching their parents -- but while the rain forest issue lost our attention, Brazil doubled the amount of land planted to soy in the last decade. The global soybean market that's propelling these dramatic changes on the Amazonian frontier is the same market that we give a little push to every time we buy a tub of Crisco, a gallon of biodiesel, a book printed with soy ink, a bar of soap made from soybean oil, chickens raised on a standard diet of corn and soybean meal, soy-based pharmaceuticals, soy-based candles, crops grown with soy-based pesticides and fungicides, farm raised fish, etc., etc. Our response is to echo Wendell Berry when he wrote: "We can't go on too much longer, maybe, without considering the likelihood that we humans are not intelligent enough to work on the scale to which we have been tempted by our technological abilities." On smaller scale farms with free range chickens soybean meal was entirely unnecessary: chickens could find their protein in the form of grubs and worms. Instead of field crops, hogs used to be raised largely on diets of acorns and table scraps and crop residues that now go unused or contribute to landfills. Soybean meal has proven significantly cheaper, at least in the short-term and if we don't account for any of the indirect costs (like costs to our health, loss of rain forests, loss of community self-sufficiency, etc.) We see a tremendous value in maintaining and rediscovering and developing alternatives to our broad dependency on commodity soybeans.