The upward trend in global food prices is set to continue, the annual conference of the Agricultural Science Association was told today.

Jeff Grant, former chairman of Meat and Wool New Zealand, said increasing world population, high energy costs and growth in the major economies of Asia and South America all point to a continuation of food inflation.

He said that land availability is now a critical issue in world food production. The amount of land for food production throughout the world was 0.25 hectare per person in 1995. This figure is 20 per cent lower today and will drop by a further 20 per cent to just over 0.15 hectares per person in 2030 as world population increases from its current level of 6.7 billion to a projected 8 billion.

Mr Grant, who is a former member of the New Zealand parliament and a large scale sheep and deer farmer, said world food stocks are now at their lowest level than at any period in the last half-century. After World War II, there was one year's supply of food in stock. Stocks had reduced to 133 days' supply in 2003. At the end of last year, stocks had more than halved, to just 57 days.

He outlined the massive changes that have taken place in New Zealand farming during the past two decades, with milk production increasing by 75 per cent and sheep production declining by 40 per cent. Beef production has dropped by around five percent during.

The switch to dairying has accelerated during the past two tears, driven by an increase of 80 per cent in New Zealand milk prices. The amount of land devoted to sheep and beef has fallen by 25 per cent since 1990 while the land area devoted to dairying has increased by 50 per cent. In 2007, New Zealand beef and sheep farmers experienced their worst profit levels in 50 years.

He said the pattern in Australia is similar where sheep numbers have declined by over 50 per cent since 1990. However, the availability of water has become a serious barrier to Australian farmers switching to milk production.
Click here for Jeff Grant's full presentation