$100 billion and rising: Canadian farm debt

Graph of Canadian farm debt, 1971-2017
Canadian farm debt, 1971-2017

Canadian farm debt has risen past the $100 billion mark.  According to recently released Statistics Canada data, farm debt in 2017 was $102.3 billion—nearly double the level in 2000.  (All figures and comparisons adjusted for inflation.)

Some analysts and government officials characterize the period since 2007 as “better times” for farmers.  But during that period (2007-2017, inclusive) total farm debt increased by $37 billion—rising by more than $3 billion per year.

Here’s how Canadian agriculture has functioned during the first 18 years of the twenty-first century (2000 to 2017, inclusive):

1. Overall, farmers earned, on average, $47 billion per year in gross revenues from the markets (these are gross receipts from selling crops, livestock, vegetables, honey, maple syrup, and other products).

2. After paying expenses, on average, farmers were left with $1.6 billion per year in realized net farm income from the markets (excluding farm-support program payments).  If that amount was divided equally among Canada’s 193,492 farms, each would get about $8,300.

3. To help make ends meet, Canadian taxpayers transferred to farmers $3.1 billion per year via farm-support-program payments.

4. On top of this, farmers borrowed $2.7 billion per year in additional debt.

5. Farm family members worked at off-farm jobs to earn most of the household income needed to support their families (for data see here and here).

The numbers above give rise to several observations:

A. The amount of money that farmers pay each year in interest to banks and other lenders ($3 billion, on average) is approximately equal to the amount that Canadian citizens each year pay to farmers ($3.1 billion).  Thus, one could say that, in effect, taxpayers are paying farmers’ interest bills.  Governments are facilitating the transfer of tax dollars from Canadian families to farmers and on to banks and their shareholders.

B. Canadian farmers probably could not service their $100 billion dollar debt without government/taxpayer funding.

C. To take a different perspective: each year farmers take on additional debt ($2.7 billion, on average) approximately equal to the amount they are required to pay in interest to banks ($3 billion on average). One could say that for two decades banks have been loaning farmers the money needed to pay the interest on farmers’ tens-of-billions of dollars in farm debt.

Over and above the difficulty in paying the interest, is the difficulty in repaying the principle.  Farm debt now—$102 billion—is equal to approximately 64 years of farmers’ realized net farm income from the markets.  To repay the current debt, Canadian farm families would have to hand over to banks and other lenders every dime of net farm income from the markets from now until 2082.

The Canadian farm sector has many strengths.  By many measures, the sector is extremely successful and productive.  Over the past generation, farmers have managed to nearly double the value of their output and triple the value of agri-food exports.  Output per year, per farmer, and per acre are all up dramatically.  And Canadian farmers lead the world in adopting high-tech production systems.  The problem is not that our farms are backward, inefficient, or unproductive.  Rather, the problems detailed above are the result of voracious wealth extraction by the dominant agribusiness transnationals and banks. (To examine the extent of that wealth extraction, see my blog post here).

Although our farm sector has many strengths and is setting production records, the sector remains in a crisis that began in the mid-1980s.  And what began as a farm income crisis has metastasized into a farm debt crisis.  Further, the sector also faces a generational crisis (the number of farmers under the age of 35 has been cut by half since 2001) and a looming climate crisis.  Policy makers must work with farmers to rapidly restructure and transform Canadian agriculture.  A failure to do so will mean further costs to taxpayers, the destruction of the family farm, and irreparable damage to Canada’s food-production system.

The cattle crisis: 100 years of Canadian cattle prices

Graph of Canadian cattle prices, historic, 1918-2018
Canadian cattle prices at slaughter, Alberta and Ontario, 1918-2018

Earlier this month, Brazilian beef packer Marfrig Global Foods announced it is acquiring 51 percent ownership of US-based National Beef Packing for just under $1 billion (USD).  The merged entity will slaughter about 5.5 million cattle per year, making Marfrig/National the world’s fourth-largest beef packer.  (The top-three are JBS, 17.4 million per year; Tyson, 7.7 million; and Cargill, 7.6.)  To put these numbers into perspective, with the Marfrig/National merger, the largest four packing companies will together slaughter about 15 times more cattle worldwide than Canada produces in a given year.  In light of continuing consolidation in the beef sector it is worth taking a look at how cattle farmers and ranchers are fairing.

This week’s graph shows Canadian cattle prices from 1918 to 2018.  The heavy blue line shows Ontario slaughter steer prices, and is representative of Eastern Canadian cattle prices.  The narrower tan-coloured line shows Alberta slaughter steer prices, and is representative for Western Canada.  The prices are in dollars per pound and they are adjusted for inflation.

The two red lines at the centre of the graph delineate the price range from 1942 to 1989.  The red lines on the right-hand side of the graph delineate prices since 1989.  The difference between the two periods is stark.  In the 47 years before 1989, Canadian slaughter steer prices never fell below $1.50 per pound (adjusted for inflation).  In the 28 years since 1989, prices have rarely risen that high.  Price levels that used to mark the bottom of the market now mark the top.

What changed in 1989?  Several things:

1.       The arrival of US-based Cargill in Canada in that year marked the beginning of integration and consolidation of the North American continental market.  This was later followed by global integration as packers such as Brazil-based JBS set up plants in Canada and elsewhere.

2.       Packing companies became much larger but packing plants became much less numerous.  Gone were the days when two or three packing plants in a given city would compete to purchase cattle.

3.       Packer consolidation and giantism was faciliated by trade agreements and global economic integration.  It was in 1989 that Canada signed the Canada-US Free Trade Agreement (CUSTA).  A few years later Canada would sign the NAFTA, the World Trade Organization (WTO) Agreement on Agriculture, and other bilateral and multilateral “free trade” deals.

4.       Packing companies created captive supplies—feedlots full of packer-owned cattle that the company could draw from if open-market prices rose, curtailing demand for farmers’ cattle and disciplining prices.

Prices and profits are only partly determined by supply and demand.  A larger factor is market power.  It is this power that determines the allocation of profits within a supply chain.  In the late ’80s and continuing today, the power balance between packers and farmers shifted as packers merged to become giant, global corporations.  The balance shifted as packing plants became less numerous, reducing competition for farmers’ cattle.  The balance shifted still further as packers began to utilize captive supplies.  And it shifted further still as trade agreements thrust farmers in every nation into a single, hyper-competitive global market.  Because market power determines profit allocation, these shifts increased the profit share for packers and decreased the share for farmers.   The effects on cattle farmers have been devastating.  Since the latter-1980s, Canada has lost half of its cattle farmers and ranchers.

For more background and analysis, please see the 2008 report by the National Farmers Union: The Farm Crisis and the Cattle Sector: Toward a New Analysis and New Solutions.

Graph sources: numerous, including Statistics Canada CANSIM Tables 002-0043, 003-0068, 003-0084; and  Statistics Canada “Livestock and Animal Products”, Cat. No. 23-203

 

 

Will Trump’s America crash Earth’s climate?

Graph of US energy consumption by fuel, 1990 to 2050
US energy consumption by fuel, 1990 to 2050

Last week, the US Department of Energy (DOE) released its annual report projecting future US energy production and consumption and greenhouse gas (GHG) emissions.  This year’s report, entitled Annual Energy Outlook 2018, with Projections to 2050 forecasts a nightmare scenario of increasing fossil fuel use, increasing emissions, lackluster adoption of renewable energy options, and a failure to shift to electric vehicles, even by mid-century.

The graph above is copied from that DOE report.  The graph shows past and projected US energy consumption by fuel type.  The top line shows “petroleum and other liquids.”  This is predominantly crude oil products, with a minor contribution from “natural gas liquids.”  For our purposes, we can think of it as representing liquid fuels used in cars, trucks, planes, trains, and ships.  Note how the US DOE is projecting that in 2050 America’s consumption of these high-emission fuels will be approximately equal to levels today.

The next line down is natural gas.  This is used mostly for heating and for electricity generation.  Note how the DOE is projecting that consumption (i.e., combustion) of natural gas will be about one-third higher in 2050 than today.

Perhaps worst of all, coal combustion will be almost as high in 2050 as it is today.   No surprise, the DOE report (page 15) projects that US GHG emissions will be higher in 2050 than today.

Consumption of renewable energy will rise.  The DOE is projecting that in 2050 “other renewables”—essentially electricity from solar photovoltaic panels and wind turbines—will provide twice as much power as today.  But that will be only a fraction of the energy supplied by fossil fuels: oil, natural gas, and coal.

How can this be?  The world’s nations have committed, in Paris and elsewhere, to slash emissions by mid-century.  To keep global temperature increases below 2 degrees Celsius, industrial nations will have to cut emissions by half by 2050.  So what’s going on in America?

The DOE projections reveal that America’s most senior energy analysts and policymakers believe that US policies currently in place will fail to curb fossil fuel use and reduce GHG emissions.  The DOE report predicts, for example, that in 2050 electric vehicles will make up just a small fraction of the US auto fleet.  See the graph below.  Look closely and you’ll see the small green wedge representing electrical energy use in the transportation sector.  The graph also shows that the the consumption of fossil fuels—motor gasoline, diesel fuel, fuel oil, and jet fuel—will be nearly as high in 2050 as it is now.  This is important: The latest data from the top experts in the US government predict that, given current policies, the transition to electric vehicles will not happen.

The next graph, below, shows that electricity production from solar arrays will increase significantly.  But the projection is that the US will not install significant numbers of wind turbines, so long as current policies remain in force and current market conditions prevail.

The report projects (page 84) that in 2050 electricity generation from the combustion of coal and natural gas will be twice as high as generation from wind turbines and solar panels.

Clearly, this is all just a set of projections.  The citizens and governments of the United States can change this future.  And they probably will.  They can implement policies that dramatically accelerate the transition to electric cars, electric trains, energy-efficient buildings, and low-emission renewable energy.

But the point of this DOE report (and the point of this blog post) is that such policies are not yet in place.  In effect, the US DOE report should serve as a warning: continue as now and the US misses its emissions reduction commitments by miles, the Earth probably warms by 3 degrees or more, and we risk setting off a number of global climate feedbacks that could render huge swaths of the planet uninhabitable and kill hundreds of millions of people this century.

The house is on fire.  We can put it out.  But the US Department of Energy is telling us that, as of now, there are no effective plans to do so.

Perhaps step one is to remove the arsonist-in-chief.

 

If you’re for pipelines, what are you against?

Graph of Canadian greenhouse gas emissions, by sector, 2005 to 2039
Canadian greenhouse gas emissions, by sector, 2005 to 2030

As Alberta Premier Notley and BC Premier Horgan square off over the Kinder Morgan / Trans Mountain pipeline, as Alberta and then Saskatchewan move toward elections in which energy and pipelines may be important issues, and as Ottawa pushes forward with its climate plan, it’s worth taking a look at the pipeline debate.  Here are some facts that clarify this issue:

1.  Canada has committed to reduce its greenhouse gas (GHG) emissions by 30 percent (to 30 percent below 2005 levels by 2030).

2.  Oil production from the tar sands is projected to increase by almost 70 percent by 2030 (From 2.5 million barrels per day in 2015 to 4.2 million in 2030).

3.  Pipelines are needed in order to enable increased production, according to the Canadian Association of Petroleum Producers (CAPP) and many others.

4.  Planned expansion in the tar sands will significantly increase emissions from oil and gas production.  (see graph above and this government report)

5.  Because there’s an absolute limit on our 2030 emissions (515 million tonnes), if the oil and gas sector is to emit more, other sectors must emit less.  To put that another way, since we’re committed to a 30 percent reduction, if the tar sands sector reduces emissions by less than 30 percent—indeed if that sector instead increases emissions—other sectors must make cuts deeper than 30 percent.

The graph below uses the same data as the graph above—data from a recent report from the government of Canada.  This graph shows how planned increases in emissions from the Alberta tar sands will force very large reductions elsewhere in the Canadian economy.

Graph of emissions from the Canadian oil & gas sector vs. the rest of the economy, 2015 & 2030
Emissions from the Canadian oil & gas sector vs. the rest of the economy, 2015 & 2030

Let’s look at the logic one more time: new pipelines are needed to facilitate tarsands expansion; tarsands expansion will increase emissions; and an increase in emissions from the tarsands (rather than a 30 percent decrease) will force other sectors to cut emissions by much more than 30 percent.

But what sector or region or province will pick up the slack?  Has Alberta, for instance, checked with Ontario?  If Alberta (and Saskatchewan) cut emissions by less than 30 percent, or if they increase emissions, is Ontario prepared to make cuts larger than 30 percent?  Is Manitoba or Quebec?  If the oil and gas sector cuts by less, is the manufacturing sector prepared to cut by more?

To escape this dilemma, many will want to point to the large emission reductions possible from the electricity sector.  Sure, with very aggressive polices to move to near-zero-emission electrical generation (policies we’ve yet to see) we can dramatically cut emissions from that sector.  But on the other hand, cutting emission from agriculture will be very difficult.  So potential deep cuts from the electricity sector will be partly offset by more modest cuts, or increases, from agriculture, for example.

The graph at the top shows that even as we make deep cuts to emissions from electricity—a projected 60 percent reduction—increases in emissions from the oil and gas sector (i.e. the tar sands) will negate 100 percent of the progress in the electricity sector.  The end result is, according to these projections from the government of Canada, that we miss our 2030 target.  To restate: according to the government’s most recent projections we will fail to meet our Paris commitment, and the primary reason will be rising emissions resulting from tarsands expansion.  This is the big-picture context for the pipeline debate.

We’re entering a new era, one of limits, one of hard choices, one that politicians and voters have not yet learned to navigate.   We are exiting the cornucopian era, the age of petro-industrial exuberance when we could have everything; do it all; have our cake, eat it, and plan on having two cakes in the near future.  In this new era of biophysical limits on fossil fuel combustion and emissions, on water use, on forest cutting, etc. if we want to do one thing, we may be forced to forego something else.  Thus, it is reasonable to ask: If pipeline proponents would have us expand the tar sands, what would they have us contract?

Graph sources: Canada’s 7th National Communication and 3rd Biennial Report, December 2017

Earth’s dominant bird: a look at 100 years of chicken production

Graph of Chicken production, 1950-2050
Chicken meat production, global, actual and projected, 1950 to 2050

There are approximately 23 billion chickens on the planet right now.   But because the life of a meat chicken is short—less than 50 days—annual production far exceeds the number of chickens alive at any one time.  In 2016, worldwide, chicken production topped 66 billion birds.  Humans are slaughtering, processing, and consuming about 2,100 chickens per second.

We’re producing a lot of chicken meat: about 110 million tonnes per year.  And we’re producing more and more.  In 1966, global production was 10 million tonnes.  In just twelve years, by 1978, we’d managed to double production.  Fourteen years after that, 1992, we managed to double it again, to 40 million tonnes.  We doubled it again to 80 million tonnes by 2008.  And we’re on track for another doubling—a projected 160 million tonnes per year before 2040.  By mid-century, production should exceed 200 million tonnes—20 times the levels in the mid-’60s.  This week’s graph shows the steady increase in production.  Data sources are listed below.

The capacity of our petro-industrial civilization to double and redouble output is astonishing.  And there appears to be no acknowledged limit.  Most would predict that as population and income levels rise in the second half of the century—as another one or two billion people join the “global middle class”—that consumption of chicken and other meats will double again between 2050 and 2100.  Before this century ends, consumption of meat (chicken, pork, beef, lamb, farmed fish, and other meats) may approach a trillion kilograms per year.

Currently in Canada the average chicken farm produces about 325,000 birds annually.  Because these are averages, we can assume that the output of the largest operations is several times this figure.  In the US, chicken production is dominated by contracting.  Large transnationals such as Tyson Foods contract with individual growers to feed birds.  It is not unusual for a contract grower to have 6 to 12 barns on his or her farm and raise more than a million broiler chickens per year.

We’re probably making too many McNuggets.  We’re probably catching too many fish.  We’re probably feeding too many pigs.  And it is probably not a good idea to double the number of domesticated livestock on the planet—double it to 60 billion animals.  It’s probably time to rethink our food system.  

Graph sources:
FAOSTAT database
OECD-FAO, Agricultural Outlook 2017-2026
Brian Revell: One Man’s Meat … 2050?
Lester Brown: Full Planet, Empty Plates
FAO: World Agriculture Towards 2030/2050, the 2012 revision

The 100th Anniversary of high-input agriculture

Graph of tractor and horse numbers, Canada, historic, 1910 to 1980
Tractors and horses on farms in Canada, 1910 to 1980

2018 marks the 100th anniversary of the beginning of input-dependent farming—the birth of what would become modern high-input agriculture.  It was in 1918 that farmers in Canada and the US began to purchase large numbers of farm tractors.  These tractors required petroleum fuels.  Those fuels became the first major farm inputs.  In the early decades of the 20th century, farmers became increasingly dependent on fossil fuels, in the middle decades most also became dependent on fertilizers, and in the latter decades they also became dependent on agricultural chemicals and high-tech, patented seeds.

This week’s graph shows tractor and horse numbers in Canada from 1910 to 1980.  On both lines, the year 1918 is highlighted in red.  Before 1918, there were few tractors in Canada.  The tractors that did exist—mostly large steam engines—were too big and expensive for most farms.  But in 1918 three developments spurred tractor proliferation: the introduction of smaller, gasoline-engine tractors (The Fordson, for example); a wartime farm-labour shortage; and a large increase in industrial production capacity.  In the final year of WWI and in the years after, tractor sales took off.  Shortly after, the number of horses on farms plateaued and began to fall.  Economists Olmstead and Rhode have produced a similar graph for the US.

It’s important to understand the long-term significance of what has unfolded since 1918.  Humans have practiced agriculture for about 10,000 years—about 100 centuries.  For 99 centuries, there were almost no farm inputs—no industrial products that farmers had to buy each spring in order to grow their crops.  Sure, before 1918, farmers bought farm implements—hoes, rakes, and sickles in the distant past, and plows and binders more recently.  And there were some fertilizer products available, such as those derived from seabird guano (manure) in the eighteenth and nineteenth centuries.  And farmers occasionally bought and sold seeds.  But for most farmers in most years before about 1918, the production of a crop did not require purchasing an array of farm inputs.  Farm chemicals did not exist, very little fertilizer was available anywhere in the world until after WWII, and farmers had little use for gasoline or diesel fuel.  Before 1918, farms were largely self-sufficient, deriving seeds from the previous years’ crop, fertility from manure and nitrogen-fixing crops, and pulling-power from horses energized by the hay and grain that grew on the farm itself.  For 99 of the 100 centuries that agriculture has existed, farms produced the animal- and crop-production inputs they needed.  Nearly everything that went into farming came out of farming.

For 99 percent of the time that agriculture has existed there were few farm inputs, no farm-input industries, and little talk of “high input costs.”  Agricultural production was low-input, low-cost, solar-powered, and low-emission.  In the most recent 100 years, however, we’ve created a new kind of agricultural system: one that is high-input, high-cost, fossil-fuelled, and high-emission.

Modern agriculture is also, admittedly, high-output.  But this last fact must be understood in context: the incredible food-output tonnage of modern agriculture is largely a reflection of the megatonnes of fertilizers, fuels, and chemicals we push into the system.  Nitrogen fertilizer illustrates this process.  To produce, transport, and apply one tonne of synthetic nitrogen fertilizer requires an amount of energy equal to almost two tonnes of gasoline.  Modern agriculture is increasingly a system for turning fossil fuel Calories into food Calories.  Food is increasingly a petroleum product.

The high-input era has not been kind to farmers.  Two-thirds of Canadian farmers have been ushered out of agriculture over the past two generations.  More troubling and more recent: the number of young farmers—those under 35—has been reduced by two-thirds since 1991.  Farm debt is at a record high: nearly $100 billion.  And about the same amount, $100 billion, has had to be transferred from taxpayers to farmers since the mid-1980s to keep the Canadian farm sector afloat.  Farmers are struggling with high costs and low margins.

This is not a simplistic indictment of “industrial agriculture.”  We’re not going back to horses.  But on the 100th anniversary of the creation of fossil-fuelled, high-input agriculture we need to think clearly and deeply about our food production future.  As our fossil-fuel supplies dwindle, as greenhouse gas levels rise, as we struggle to feed and employ billions more people, and as we struggle with many other environmental and economic problems, we will need to rethink and radically transform our food production systems.  Our current food system isn’t “normal”: it’s an anomaly—a break with the way that agriculture has operated for 99 percent of its history.  It’s time to ask hard questions and make big changes.  It’s time to question the input-maximizing production systems agribusiness corporations have created, and to explore new methods of low-input, low-energy-use, low-emission production.

Rather than maximizing input use, we need to maximize net farm incomes, maximize the number of farm families on the land, and maximize the resilience and sustainability of our food systems.

Carbon tax will not cause fossil fuel use to fall: Canada’s NEB

Graph of Canadian fossil fuel use and NEB projections to 2040
Canadian fossil fuel use, historic and projections to 2040

The graph above is based on data from a recent report by Canada’s National Energy Board (NEB)—a federal government agency.  The October 26 report, Canada’s Energy Future 2017, predicts that Canadians will be consuming fossil fuels at the same rate in 2040 as we are today.  The NEB is projecting that fossil fuel use will not fall, nor will attendant greenhouse gas (GHG) emissions.

The graph’s blue bars show Canadian fossil fuel use over the past 11 years.  The brown line shows the NEB’s projections for the future.  The units, exajoules, are not important.  What is important is that the NEB predicts no drop in fuel consumption.

Most important, is that the NEB’s projections take into account the federal government’s carbon tax.  Ottawa has announced that the provinces must impose a carbon tax of $10 per tonne in 2018, escalating to $50 per tonne by 2022.  All provinces must impose a tax, or some equivalent carbon-pricing scheme.

At the Paris climate talks in 2015, Canada joined other nations in committing to limit the global average temperature increase to 2.0 degrees C (relative to pre-industrial levels).  To help achieve that goal, Canada has made an international commitment to reduce its GHG emissions by 30 percent (relative to 2005 levels) by 2030.  The NEB is, in effect, saying that Canada will fail to meet its commitment of a 30 percent reduction; the carbon tax, along with all other measures announced so far, will not cause a decline in fossil fuel use or emissions.

The preceding should surprise no one.  The federal government’s carbon tax starts out at $10 per tonne of carbon—equivalent to about 2¢ per litre of gasoline.  Over the next half-decade, it rises to $50 per tonne—about 11¢ per litre.  Many Canadians do not know the price of gasoline to the nearest dime.  And gasoline prices over the past year were down as much as 40¢ compared to three years ago.  An 11¢ per litre carbon tax is not going to cause gasoline consumption to fall.  Similarly modest taxes on other fuels will likewise prove ineffective.

Canadians need to understand that they are being deceived.  Politicians—eager for re-election and afraid of hard conversations with voters—are understating the magnitude of the climate crisis and overestimating the effectiveness of our actions to counter the threat.

How do we actually reduce fossil fuel use, cut emissions, and stabilize the climate?  A carbon tax is needed, but it must be much higher: $200 to $300 per tonne—equivalent to 50¢ to 75¢ per litre of gasoline.  But such a tax is unbearable for citizens (and politicians) unless 100 percent of the total tax collected is rebated back to citizens on a per-capita basis.  We need a carbon-tax-and-refund system.  Under such a system, we would all pay taxes on gasoline, home heating fuel, etc. and pay indirectly on the energy embedded in our products.  Goods that required a lot of energy to produce or transport would cost more.  But offsetting these new costs, we would receive back all the carbon tax money collected, on a per-capita basis.  Thus, if a person’s energy consumption is below average, he or she would finish the year money ahead—his or her per-capita refund would exceed the carbon taxes paid.  On the other hand, someone who wants to drive a Hummer and heat and cool a huge home will come out money behind.  Another way of thinking about this tax-and-refund system is that it transfers money to those doing the right things from those doing the wrong things.  And the former group can take their carbon tax refunds and invest them in home energy retrofits, solar panels, and other emission-reduction measures, setting the stage for even larger carbon tax savings next year.

The NEB is telling us we’re not on track.  But we can change course.  Bold and rapid policy action now can reduce emissions by 30 percent and help limit temperature increases to 2 degrees.  But we must act.

Graph source: National Energy Board

Setting our future aflame: Projected energy use to 2035

Graph of primary energy consumption by source or fuel, 1965 to 2015, with projections to 2035
Global primary energy use, by source or fuel, 1965 to 2015, with projections to 2035 (billions of tonnes of oil equivalent)

In a recent post (link here) I said that holding global temperature increases below dangerous levels would require “a mobilization of near-wartime scale and speed to transform the global economy and its energy and transportation systems.”  Most climate scientists looking at carbon budgets agree that global greenhouse gas emissions need to fall to near zero in the 2040s (to hold temperature increases below 1.5 degrees Celsius) or 2050s (to hold increases to 2 degrees).

So, how are we doing?  BP (formerly British Petroleum) is one of the world’s leading sources for energy statistics and projections.  This week’s graph is taken from the 2017 edition of its Energy Outlook.  The graph shows BP’s projections of energy use to 2035, based on current trends.  The picture is bleak.

BP’s projections show oil use/combustion rising over the next 18 years.  Natural gas combustion rises even faster.  Even coal combustion increases.  Not surprising, BP projects rising GHG emissions for the period from 2017 to 2035.  But this is exactly the time frame in which we are supposed to be rapidly reducing emissions.

If BP is correct, if we act in the ways they are predicting, there is zero chance of meeting the Paris commitments of reducing GHG emissions by 30 percent by 2030.  And there is zero chance of holding temperature increases below 2 degrees.  The picture BP paints, if we allow it to come to pass, would push global temperature increases past 3 degrees, or even higher.  That would be a cataclysmic amount of warming.

I’m told that fear and bad news are not good motivators.  But neither are delusion or denial.  We must stop telling ourselves fanciful stories about salvation by solar shingles.  The citizens of the world need to know the facts about our situation and our trajectory.  There is a vague feeling that we’re doing the right thing, that solar and wind power are growing so fast that we can meet our targets, that a modest carbon tax levied sometime in the future will be enough to put us onto the right track.  No.  Projections by BP and others tell a wholly different story.  The facts indicate that we are on track to climate calamity.  That may not be welcome news, but it is the truth.  Whether it motivates people remains to be seen.

Graph source: BP, Energy Outlook: 2017 edition

Cattle Rustling? The growing gap between cattle and beef prices

Graph of Canadian cattle prices and retail beef prices, 1995 to 2017
Retail prices of ground beef and steak compared to farmers’ prices for cattle, 1995–2017

This week’s graph highlights the growing gap between what Canadians pay for beef and what farmers receive for their cattle.  The rising blue lines show grocery-store prices for steak and ground beef.  The comparatively flat green lines represent the prices farmers and feedlot operators receive for the cattle they sell to beef packers.  Steers (castrated male cattle) are more likely to be the source of steaks, while cows are primarily turned into ground beef.

The blue lines show what consumers pay; the green lines show what farmers get.  The widening gap between the blue lines and the green lines reveals the amount that packers and retailers take for themselves.

Let’s look first at the dotted lines.  The green dotted line shows the per-pound price farmers in Alberta receive for their cows.  (prices across Canada are similar.)  In the decade-and-a-half before 2010, that price averaged about 50¢.  In recent years it has averaged about $1.00.  One could say that farmers are receiving an extra 50¢ per pound for their cows.  These figures do not take into account rising costs (they are not adjusted for inflation) but we’ll leave that issue aside for now.  Note what happens to the blue dotted line: the grocery-store price of ground beef.  It more than triples, from about $1.70 per pound to about $5.50.  Farmers’ prices increased by 100%, but packers and retailers increased their take by 320%.  Farmers’ prices increased by 50¢, but packers and retailers increased their prices by nearly $4.00.

The solid green line shows the price that farmers (or feedlot operators) receive for slaughter-ready steers.  The solid blue line is a representative price for grocery-store steaks.  If we compare recent years to those before 2013, we see that steer prices have risen by perhaps 50¢ or 60¢ per pound.  Over the same period, steak prices have risen by $5.00 or $6.00.

There is little discernible connection between the prices consumers pay and the prices farmers receive.  This is true of cattle and beef, but also true of nearly every other farm-retail product pair.  For a graph comparing the prices of wheat and bread, click here.  Similar “wedge” graphs can be created for corn and cornflakes, hogs and pork chops, and many other farm-retail product pairs.

Food processors, packers, and retailers are choking off the flow of dollars to Canadian farms, with devastating effects.  The number of Canadian farms raising cattle has been cut nearly in half in a generation—from 142,000 in 1995 to less than 75,000 today.  Moreover, many of these farms reporting cattle are dairy farms (which do sell cattle for slaughter, but support themselves primarily from milk sales).  The number of farms classified as “beef cattle ranching and farming, including feedlots” stood at just 36,000 in 2016.  Farm debt is a record $100 billion.  And the number of young farmers (<35 years of age) today is just one-third the number a generation ago.

Canadians are paying many times over.  We’re paying a high price at the store.  We’re paying again through our taxes to fund farm support programs—money paid to farmers to backfill for the dollars extracted by powerful transnational packers, processors, and retailers.  And we’re paying yet again as our rural economies are hollowed out, our communities decimated, our family farms destroyed, and our nation’s capacity to sustainably produce food is eroded.

Graph sources: Statistics Canada CANSIM Tables 326-0012 and 002-0043.  

Everything must double: Economic growth to mid-century

Graph of GDP of the world's largest economies, 2016 vs 2050
Size of the world’s 17 largest economies, 2016, and projections for 2050

In February 2017, global accounting firm PricewaterhouseCoopers (PwC) released a report on economic growth entitled The Long View: How will the Global Economic Order Change by 2050?  The graph above is based on data from that report.  (link here)  It shows the gross domestic product (GDP) of the largest economies in the world in 2016, and projections for 2050.  The values in the graph are stated in constant (i.e., inflation adjusted) 2016 dollars.

PwC projects that China’s economy in 2050 will be larger than the combined size of the five largest economies today—a list that includes China itself, but also the US, India, Japan, and Germany.

Moreover, the expanded 2050 economies of China and India together ($102.5 trillion in GDP) will be almost as large as today’s global economy ($107 trillion).

We must not, however, simply focus on economic growth “over there.”  The US economy will nearly double in size by 2050, and Americans will continue to enjoy per-capita GDP and consumption levels that are among the highest in the world.  The size of the Canadian economy is similarly projected to nearly double.   The same is true for several EU countries, Australia, and many other “rich” nations.

Everything must double

PwC’s report tells us that between now and 2050, the size of the global economy will more than double.  Other reports concur (See the OECD data here).  And this doubling of the size of the global economy is just one metric—just one aspect of the exponential growth around us.  Indeed, between now and the middle decades of this century, nearly everything is projected to double.  This table lists just a few examples.

Table of projected year of doubling for various energy, consumption, transport, and other metrics
Projected year of doubling for selected energy, consumption, and transport metrics

At least one thing, however, is supposed to fall to half

While we seem committed to doubling everything, the nations of the world have also made a commitment to cut greenhouse gas (GHG) emissions by half by the middle decades of this century.  In the lead-up to the 2015 Paris climate talks, Canada, the US, and many other nations committed to cut GHG emissions by 30 percent by 2030.  Nearly every climate scientist who has looked at carbon budgets agrees that we must cut emissions even faster.  To hold temperature increases below 2 degrees Celsius relative to pre-industrial levels, emissions must fall by half by about the 2040s, and to near-zero shortly after.

Is it rational to believe that we can double the number of cars, airline flights, air conditioners, and steak dinners and cut global GHG emissions by half?

To save the planet from climate chaos and to spare our civilization from ruin, we must—at least in the already-rich neighborhoods—end the doubling and redoubling of economic activity and consumption.  Economic growth of the magnitude projected by PwC, the OECD, and nearly every national government will make it impossible to cut emissions, curb temperature increases, and preserve advanced economies and stable societies.  As citizens of democracies, it is our responsibility to make informed, responsible choices.  We must choose policies that curb growth.

Graph source: PriceWaterhouseCoopers