Friday, July 27, 2012

The cost of climate change

The evidence of climate change keeps piling up—this time from Greenland.

Greenhouse in Greenland: 97% of ice surface shows melting

25 July, 2012

Satellites see unprecedented Greenland ice sheet surface melt (Image: NASA)

Almost all of Greenland’s ice shield melted at the surface this month, says NASA. The event, unseen at such a scale in more than 30 years of satellite observations, has puzzled scientists.

Naturally, some of the island’s ice is expected to melt during the summer, but this year’s observations from three NASA satellites have shown something unusual – the melting occurred in a flash and over a widespread area. Even Greenland's coldest and highest place, Summit Station, showed signs of melting.

Son Nghiem of NASA's Jet Propulsion Laboratory in California was analyzing radar data from a satellite when he noticed that most of Greenland appeared to have undergone surface melting on July 12.

“This was so extraordinary that at first I questioned the result: was this real or was it due to a data error?” NASA cited his words on its website.

In a matter of only four days, starting on July 8, the affected area had spread from 40 per cent of the ice shield to a staggering 97 per cent. This by far exceeds the maximum registered level of 55 per cent.

“When we see melt in places that we haven't seen before, at least in a long period of time, it makes you sit up and ask what's happening?” AP quoted the agency’s chief scientist Waleed Abdalati as saying. “It's a big signal, the meaning of which we're going to sort out for years to come.”

Other experts, including NASA ice scientist Tom Wagner, say they are not able to determine at this point whether a rare natural phenomenon is being observed or one triggered by man-made global warming – large-scale melting has happened in Greenland before. Still, they note that the edges of the island's ice sheets have already been thinning due to climate change. more
Major drought.  Food prices go up.  Folks will demand action.  The neoliberals will assure us that this inflation is due to flawed monetary policies.  They will do this because that has been their explanation for everything since the acolytes of Milton Friedman started being taken seriously in the 1970s.

Drought will bring about higher food prices, US warns

Department of agriculture says catastrophe in the corn belt will push up prices, with drought now covering two-thirds of America
Suzanne Goldenberg, US environment correspondent, 25 July 2012

The US government acknowledged for the first time on Wednesday that the drought now covering two-thirds of the country will lead to significantly higher food prices.

The catastrophe in the corn belt, which has seen crops decimated by extreme heat and prolonged drought, will have ripple effects throughout the food system, the department of agriculture said in its food price outlook.

US consumers can expect to pay up to 4.5% more for beef because corn, which is used for cattle feed, will be in such tight supply, the report said.

Chicken and turkey were also projected to rise by up to 4.5%, and the price of eggs will also go up, but by about 2%.

Cooking oil, which is produced by the most devastated crops – corn and soybean – is projected to rise by 4.5% as well.Cattle, US drought, Indiana Supermarket shoppers will probably notice the higher prices with chicken first, because they have a shorter lifespan. Food price inflation for other items, such as cereal and baked goods, will begin working their way through the system in 2013, the report said.

"The transmission of commodity price changes into retail prices typically takes several months to occur, and most of the impact of the drought is expected to be realised in 2013," Richard Volpe, the USDA's food economist, wrote in a note accompanying the forecast.

Some economists have even predicted a temporary drop in beef prices, with ranchers bringing their animals to slaughter sooner rather than paying higher prices for feed.

But the report warned: "The full extent of the drought and its effects on commodity prices are as yet unknown."

The report was the first indication from the government of the sweeping effects of the drought. Corn and soybean – the favoured crops in the rich, dark soil of the midwest – were the primary casualties of this drought.

Corn and soybean prices both set record highs this week at the Chicago board of trade. Prices for corn have gone up 50% just in the last three months.

Corn, used for animal feed, processed food, and as a fuel in the manufacture of ethanol is a pillar of the agricultural economy.

Economists and food security experts have been warning that the drought would have widespread impacts for consumers in the US and globally, because so many countries rely on imported grains.

"You are talking about a real bite out of family budgets," said Ernie Goss, an agricultural economist at Omaha's Creighton University, who was speaking before the release of the government projections. "As far as the election goes this is not good news for President Obama – even though he certainly bears no responsibility for the weather." more
Of course, when pork prices go up in USA, they will go up in many places.  The market is very large and integrated.

The Drought In The Midwest Could Cause Pork Prices To Surge In China

Mamta Badkar | Jul. 26, 2012

The drought in the American Midwest has sent corn prices soaring. And this is a very worrisome sign for Chinese pork prices.

Societe Generale analysts Michel Martinez, Wei Yao, and Jaroslaw Janecki write that nearly 90 percent of changes in Chinese domestic pork prices can be attributed to "global corn prices lagged by one quarter, and soybean prices lagged by two quarters".
Given that China has outpaced the U.S. to become the world's largest meat consumer, and that Chinese demand for pork is expected to reach 52 million tons this year this could have significant implications for pork prices.
The recent surge in food prices is unlikely to reverse the overall decline in consumer price inflation. But if food prices continue to soar through summer a rise in inflation could be seen in November or December.
This chart from SocGen shows the correlation between global corn prices and Chinese CPI:

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