Food is fuel. It powers us through our daily routines, from breakfast to bedtime. Food is a given, easily taken for granted. It gives most Americans no great cause for concern, but it should.
Thinking & working together we can cultivate the change that fuels our future as a Sustainable America.
As many Americans feel the financial squeeze when they go to the gas pump or to a lesser extent, the grocery store, there is not always a good understanding of the larger forces at work. Supply and demand imbalances exist for the two consumer staples most vital to sustaining daily American life: food and oil. Both industries are currently operating near capacity and forecasts indicate that this situation will only get worse due to increased demand on a relatively fixed supply.
20,000,000 Barrels of Oil
Consumed In The USA-Every Day!
Though the food and fuel markets have always been somewhat connected because oil is an input into the agricultural process, this connection has grown as we have begun to turn food into ethanol to supplement our oil supply. The growing imbalances and this connection have several consequences. At best, we can expect higher prices which in turn affect the economically vulnerable the most because they spend the highest share of their income on food and fuel. At worst it could lead to physical shortages, as both markets are volatile; oil because of political upheaval and food due to sensitivity to global weather patterns and drought. The link between these two markets also means that any change in one will alter the other so prices will rise (or fall) in unison.
The food market (which includes commodity markets for grains, sugar, dairy, proteins, and other key nutritional inputs) is a global market today, similar to the market for oil. Global demand for calories is expected to grow by almost 50% over the next 40 years, due to population growth and increases in per-capita consumption.
The challenge of meeting accelerating food demands is a chief concern as a broad range of factors tightens supply and creates an unsustainable relationship between food usage and production. World grain usage has exceeded production in recent years, with a capacity utilization of over 100%, driving stockpile-to-usage ratios of corn and wheat to their lowest global levels in 30 years.
The increased cost of essential staple items has a direct impact on the purchasing power of a paycheck. Tight capacity utilization, along with rising demand, have contributed to many main food commodities like sugar, cereals and dairy doubling or tripling in price over the last 10 years.
This interconnectedness has broad, negative consequences, especially for low-income populations. Tight global supply and disruptions in either market will continue to drive up food and fuel prices. Food, and in many cases, fuel, are non-negotiable expenditures. Price increases on these staple items strain already-tight budgets with little if any leeway because these items make up a much greater proportion of their total income. In 2010, the lowest quintile of earners spent a combined 43% of total income on food and gasoline, whereas the top quintile of earners spent only 9% on these items.
The Lowest 20% of Earners
Spend a Combined 43% of Total
Income on Food and Gasoline
Beyond affecting the most disadvantaged economically, these price shocks hamper economic growth as a whole. Each of the last six recessions in the U.Ss going back to 1972 have been preceded by an oil price spike that increased the percentage of consumer spending that was devoted to energy. The unsustainable use of resources responsible for these shocks has significant national security implications and environmental costs as well.
The worst possible outcome is that this tight balance of food and fuel could move beyond higher prices and weakened budgets to something with which U.S. society is currently unfamiliar: actual physical shortages. This would be a massive detriment to social wellbeing and economic productivity, but when armed with this realization we can view the possibility as a call to action. We must work together, in measures small and large, to break the connection between food and fuel.
The big picture of the Food/Fuel Crisis can seem overwhelming, but with small steps we can foster great change. The challenges we face today will be overcome through increased awareness of the problem and encouraged innovation toward new solutions. Fortunately, the U.S. has the resources, both societally and technologically, to lead the world in developing ideas and infrastructure for sustainable systems. Sustainable America aims to reduce U.S. oil consumption while increasing U.S. food production.
No idea is too small to make an impact, and there is no one right answer to the Food/Fuel Crisis.
But there is a right direction forward to the future, toward a Sustainable America.
The first step toward a Sustainable America is an open discourse and common language. Stay up to date and in touch with Sustainable America through our weekly email digest.
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