These four conditions will profoundly affect the future of farming and civilization:
- Cheap energy: We are at the end of a very short-term oil and gas production surplus that has driven down all commodity costs. Nitrogen-fertilizers, which are critical to intensive agriculture, are produced by petrochemical refineries. Food production and transportation costs are directly tied to fuel costs.
- Cheap credit: Global production increases have been driven by financed purchases of farming equipment, land, fertilizer, and seed using historically low nearly-zero interest rates. Interest rates are subject to change and radically affect the cost of business for capital-intensive industries like farming. Just as interest rate hikes killed the small family farm in the US back in the 30’s, a new round of interest rate hikes will trigger global consolidation of farming as small and midsize concerns sell out to larger ones. (This consolidation in 30’s also prompted mass migration from rural areas to urban centers.)
- Climate change/water availability: Despite this winter’s rains, California, the Midwest (US), and other producing regions around the world are challenged by water scarcity and competition for freshwater supplies with growing urban populations. This scarcity impacts yields and decreases arable land. It also has political effects: In 2015–16 California’s ongoing drought prompted divisive political conflict, with plenty of finger-pointing between urban populations, farmers, and government agencies.
- Bioenergy/methanol: When oil prices hit $112/barrel in 2011 (currently $49/barrel), competition from biofuel production helped drive the price of corn, soy, rice, and other food commodities to record highs; triggering food riots, political extremism, and conflicts whose effects we see today.
TLDR: The current peace and prosperity we are experiencing is an interlude in an unfolding global food crisis. It is a rare and tremendously lucky opportunity for us to develop and work on solutions.