From The Wall Street Journal – Alistair Wood used to know exactly where his crops would end up. For the last 30 years on his 8,000 acre arable farm in Northern Kenya he’s only found one market at harvest: The local population or their animals. Now his wheat and corn could just as easily be sold onto the world’s biofuels market to satisfy the growing demand for energy.
Either way, he’ll still get a better price for his grain than 10 years ago. Then he was struggling to cover his costs with the returns offered by a world global market saturated with the subsidized output of farmers from as far afield as the Midwest plains of the U.S., the fens of Lincolnshire in the U.K. and the giant paddocks of Western Australia. The reduction in farm subsidies in all these regions is undoubtedly helping Mr. Wood compete. But more developed economies such as China and India have caused a surge in demand for grain, as the newly affluent acquire a taste for meat and beer. But how much of an effect has a thirst for renewable energy had on the grain price and in turn global food prices?