Thursday, January 20, 2011

Valuing Arable Land

Through the rumor mill I heard yesterday that large corporations were buying up arable (farm) land in the northern midwest. This brought to my attention once again one of my opinions on the United States. The United States currently exports more food than imports food in terms of dollars. (That search led me to an interesting article about food and fuel on Wikipedia.)

My thoughts are:

  1. Oil prices will continue to rise to the point that shipping becomes very expensive. I'm not sure if that would be at $5 a gallon for gas or $10 a gallon for gas in the US, but sooner or later prices will creep up. Shipping will be more expensive, and I don't mean the same percentage of income, I expect the price of oil to rise faster than inflation due to demand in developing countries.
  2. The world population is rising. This can be a tense subject. Because the truth is the world can only support so many people. There is a limit. I understand that that limit goes up and down depending on climate change, our technology, and land use cycles (forrest to farm land to desert or in the case of California desert to irrigated farm land). The point being the world can only produce X pounds of food and that only feeds Y number of people (on day Z). 
  3. Food is typically thought of as non-negotiable. Billionaires and homeless people all need the same 2000 calories a day. The possible future problem is that countries that do not produce enough food for their own people might have a problem. How long will people starve before riots break out?
  4. Farming is a concrete business. Seeds are planted, plants grow, are harvested, and finally people eat the grains, fruit and vegetables. What I mean is that when the "smart" people on Wall Street were trading sub-prime mortgages and not everyone understood how they were making so much money but they went along with it because they were making so much money, that does not happen in the world of farming. 
  5. There is only so much land in the world and not all of it is arable. We can build more computers, houses, cars, lattes, cell phones, books, and shirts than there are in the world, but we have a much more difficult time making more land, especially land we can farm.
Respect it. Love it. Eat. I mean without arable land no one would grow to be old enough to learn how to read.

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