Last May, Trent Bunderson and Chris Pannkuk conducted an informal food price survey in Malawi and Afghanistan. Bunderson, a project associate with Washington State University’s International Programs, has worked in Africa for more than 25 years with local farmers on agronomic and agroforestry projects. Pannkuk is director of international research for WSU. At the time, he was wrapping up a project in eastern Afghanistan that promoted alternative livelihoods to the prevalent opium poppy production.

Bunderson and Pannkuk found that in the local markets, where most people of those regions generally buy their food, the price of staple foods had doubled since January.

“We asked them why” says Pannkuk. “They said, ‘we’re not storing it here.'” Thus, local populations are dependent on merchants bringing the staples in from other areas. Farmers sell their excess crop at harvest, and small traders bring staples back as needed, at inflated costs.

In other words, those local markets in Malawi and Afghanistan are feeling the same reverberations in the world food markets that you felt last week at the grocery store–though considerably more directly.

Certainly, comparing food prices in Malawi, Afghanistan, and Seattle is something like comparing the role of, say, either Pacific salmon or cassava in the respective economies and diets.

For one thing, according to the United Nation’s Food and Agriculture Organization (FAO), people throughout the developing world typically spend 60 percent of their incomes on food. In the United States that number is less than 10 percent. In July 2008, the FAO’s food price index was 37 percent higher than a year before.

In contrast, food prices overall in the United States rose less than six percent over the same period. That relatively modest rise was a result of retailers absorbing much of the increase in commodity prices. Wheat, for example, was up over 80 percent, soybeans 73 percent, corn 47 percent, peas 63 percent, rice 50 percent, and lentils 148 percent.

One of many (and certainly the most argued) factors leading to worldwide price volatility is biofuel, particularly ethanol. Although biofuels, petroleum substitutes made from plant biomass, tend to get lumped together in the public mind, sources are quite different. Ethanol, a gasoline substitute made from corn, seems to be the primary culprit in the elevation of food prices, as corn–and high-fructose corn syrup–is ubiquitous in our processed foods. In Africa, corn (maize) prevails as a fundamental staple. Pankkuk worries that Malawi and Tanzania will succumb to the temptation of ethanol, diverting grain into energy production. That really would affect food prices, he says.

“I’m no apologist for ethanol” says WSU natural resource economist Jon Yoder, who directs a Washington Legislature-assigned study of the potential biofuels market in the state.

“My sense is yes, ethanol production in the U.S., maybe has a measurable effect on a select set of food types” says Yoder. But the effect is minor compared to the effect of energy costs on agriculture. Yoder’s colleague, Jeffrey LaFrance, was similarly cautious.

However, a report commissioned by the World Bank and leaked in April to the Guardian argues that ethanol production has indeed had a dramatic effect on world food prices. I asked LaFrance for his assessment.

LaFrance, who’d just returned from an economic conference in Italy, e-mailed me this analysis:

“There are several reasons for the rise in prices for the basic staple grains, mainly (other foods probably will follow suit):

{1} Global demand has risen in response to the tremendous growth in China and India–roughly 10 percent per year for the past decade. This growth translates into higher incomes, and a demand for better and more diversified diets. China has been shifting to pork consumption as an important source of protein. Pigs eat corn, soybeans, and other grains. India has been shifting to poultry (mainly chicken) consumption for the same reason. Chickens also eat corn, soybeans, and other grains.

{2} Global supply–especially for wheat–has been interrupted by a seven-year running severe drought in Australia, the major U.S. competitor for wheat exports. Similarly, Brazil has had at least one severe crop shortfall in the past couple of years.

{3} Global carryover stocks of stored grain have decreased over the past eight years, to their lowest level since 1938. Moreover, total world production plus carryover stocks (the total supply of staple grains) has not been as low as it was this past crop year since 1946.

{4} All of the net increase in corn production in the United States (the major corn producing and exporting country in the world) has gone to ethanol production since 2001. This leaves the wet and dry milled residual as a feedstock in the U.S., but nevertheless, the total livestock feed supply has decreased.

{5} In response to the higher corn prices, farmers planted a record number of acres (90.5 million acres) in 2007–the highest acreage since 1944 (63 years). This increase in corn acreage is directly associated with a corresponding decrease in soybean and wheat acres–which in turn contributed to the high wheat and soybean prices we’ve seen recently. However, these higher prices for the competitor crops have stimulated record and near record acreage planted in wheat and soybeans this year.

{6} Commodity prices have risen considerably more in the United States than other countries due to the weak dollar. This weakness is caused by at least two economic forces. (a) Deficit spending–we now have more than $9 trillion in public debt, which is nearly two-thirds of the U.S. GDP ($14 trillion). Deficits imply borrowing, and about half of the lenders are foreign governments. China holds a lot of U.S. government debt. (b) Trade deficits–we buy more from other countries than we sell, and other countries end up with dollars in exchange for their goods, which weakens the exchange rate relative to their currencies.

{7} Some countries have begun to ban grain exports to protect their domestic price levels. This hoarding increases the tension between supply and demand and will undoubtedly lead to more price pressure in the near term.


So, we have what might be called a perfect economic storm. China and India are not likely to stop growing, and their governments don’t have any incentive to impede this growth. A supply shortfall in any one of the major grain producing regions of the world will exacerbate the tension between supply and demand. Ethanol subsidies don’t help. The U.S. federal government spending money like a bunch of drunken sailors doesn’t help. We should expect relatively higher inflation (5-10 percent rough guess) and low, perhaps little or no, growth.”

Whatever University of Chicago economist Milton Friedman’s eventual status in economic history, one of his maxims will undoubtedly endure: “Only a crisis–actual or perceived–produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”

Whether or not our current food and energy situation is a crisis remains to be seen. However, many are approaching it as an opportunity to change the status quo, reestablish some fundamentals, and create some new ideas to “lie around.”

Fred Fleming ’73 is a “recovering conventional farmer” he tells me as we sit in the Peacock Room at Spokane’s Davenport Hotel, eating bread that started out as wheat in Fleming’s field. Also at the table are the Davenport’s marketing director Tom McArthur and executive banquet chef Bryan Franz. In the process of developing and marketing their Shepherd’s Grain flours, Fleming and business partner Karl Kupers ’71 have upended a lot of longstanding eastern Washington traditions and sensibilities.

It wasn’t long ago that Fleming farmed like everyone around him, growing commodity wheat, soft white
winter wheat that would then be shipped to Asia for whatever price supply and demand dictated. He was a “price-taker” as he puts it.

Every year, he’d crisscross every square foot of his acreage eight to twelve times, most of them high-fuel trips, pulverizing his soil so he could coax another soft white wheat crop out of it.

But Fleming is not the type of guy to just do the same thing over and over just because it’s expected. He and Kupers were drawn to no-till, a method of cropping in which you use a very large Rube Goldberg-ish implement to inject the wheat directly into last year’s untilled stubble.

The first time Fleming saw a no-till field, John Aeschliman’s in Colfax, he thought the guy was crazy. The Northwest wheat aesthetic is as manicured as a suburban lawn. And no-till is decidedly unkempt. But he also noticed that Aeschliman had earthworms in his soil. It was spongy underfoot and held water far better than his own structureless dirt. And it didn’t blow away. He started doing the numbers in his head.

Some guys like spending their lives on a tractor retracing the same ground over and over. But Fleming and Kupers had other things on their minds. Like breaking out of the commodity wheat game.

So one day, having established themselves as no-till farmers and experimented growing crops that no-till will coax out of eastern Washington conditions, Kupers and Fleming headed for Portland with samples of sunflower and safflower seed, to see what kind of deal they could offer those big-city grain brokers.

Well, says Fleming, the first place Karl rang the bell, he was told they’d talk to farmers between ten and four o’clock on the third Thursday of each month.

After recovering from the rejection and accepting the snub as a reality check, “We said, well let’s grow what we do best” says Fleming. “Wheat.”

They caught on to the odd fact that, here in the midst of one of the greatest wheat growing regions of the world, you couldn’t get any good local bread flour. That’s because everybody knows you can’t grow hard red or hard white wheat, the requirements for good flour, around here.

“Well, I’m so damn stupid I didn’t know any better” he says with the loud infectious laugh that punctuates most of his statements. “Perseverance and ignorance will prevail!”

Brady Carter, at WSU’s USDA wheat quality lab, suggested some hard whites and hard red spring wheats to try. Which they did.

“Didn’t really do too well” says Fleming, referring to its quality as bread flour. But then they blended the two, and it “worked perfect.” One of the varieties they’re using now is Tara 2000, developed by WSU spring wheat breeder Kim Kidwell. Now they’re experimenting with a hard red winter wheat.

One thing led to another, and now 33 farmers belong to the Shepherd’s Grain cooperative.

“Now we’re price-setters rather than price-takers” says Fleming.

All of the wheat raised by Shepherd’s Grain is no-till. Fleming likes to describe his wheat as “beyond organic” as organic production of wheat requires tillage and the resulting disturbance of its microbial ecosystem.

As early as 1912, Washington State College scientists were warning against soil erosion and loss of soil nitrogen and humus because of current farming practices. Their warnings were generally ignored, largely because those practices worked in the short term, producing large yields out of a topsoil that seemed endless to farmers.

According to a recent article in Scientific American on no-till farming by WSU soil scientist John Reganold and USDA researcher David Huggins, by the late 1970s, soil erosion had removed 100 percent of the topsoil from 10 percent of Palouse cropland. Another 20-75 percent of the topsoil had been removed from another 60 percent of the cropland.

The Shepherd’s Grain growers meet regularly, often with WSU and UI economist Kate Painter (who took over the task from Herb Hinman, when he became too ill), to work out pricing structures and economic strategies. Their directive is “cost of production plus reasonable rate of return.”

This year, they sold 600,000 bushels of wheat as Shepherd’s Grain flour. Fleming expects to break a million bushels soon. The Davenport bakes up to 140 loaves of bread a day, made exclusively with Shepherd’s Grain. It is now marketing a bake-at-home bread kit that includes Shepherd’s Grain flour made exclusively from Tara 2000, locally pressed olive oil, and honey produced in the Greenbluff area. The kit is put together at Christ Kitchen, a non-profit ministry for poor women, just down the street from the Davenport.

This also signifies an interesting move by the Davenport. McArthur sees the bread as part of a move toward more regional, agriculturally oriented tourism. Rising costs of fuel and transportation will likely divert more people from foreign to domestic travel. “The Davenport is in the entertainment business” he says. “We take them rafting down the Spokane River, we come up into a farmer’s field, we stop at a winery on the way back, and that evening Bryan fixes them what they saw that day for dinner.”

The best thing about the whole deal is that eastern Washington once again has its own high-quality, high-protein bread flour. Shepherd’s Grain flour is now used throughout the kitchens of WSU. It’s been adopted by many bakeries and food services. I don’t know whether Kupers and Fleming were visionary, madly practical, or just crazy when they decided to break out of the commodity system. But they now have a rapidly growing regional market, drawing on locally grown wheat. When they came up with their idea, diesel was less than $2 a gallon. Now it’s near $5. Fleming figures he reduces his fuel costs at least 38 percent by using no-till.

Perhaps most important in the overall sustainability quotient, however, is the fact that Shepherd’s Grain is setting the price. Fleming allows that the Shepherd’s Grain growers were all a little restless this year when commodity wheat spiked to $12 a bushel, and they had contracted for less than $9. However, next year, no matter what the commodity price, they’ll sit down again and agree on a “reasonable rate of return.”


Shepherd’s Grain is a dramatic response to the prevailing bad economic, energy, and food news, indeed against LaFrance’s perfect storm. Following World War II, agriculture and food supply chains followed leads such as mechanization and economy of scale to become increasingly industrialized and centralized. Although not inherently bad, the process involved consolidation of land, resulting in larger and larger farms, which, when accompanied by the supplanting of labor by mechanization, dissolved rural communities. Full-time agricultural occupations in the United States currently represent about 1 percent of the population, less than the country’s prison population. Along with that population loss is a loss of regional infrastructure, such as local food markets, slaughterhouses, feedmills, and so forth.

One of the most vulnerable parts of our current food system is beef. More than likely, that pack of hamburger you picked up last night for $2.31 a pound came from cattle that spent most of their short crowded lives in a feedlot, chomping down corn. Any number of factors threaten such a system: the price of corn, bacterial contamination, fuel costs.

Don Nelson is not about to give up a good rib-eye. He’d just like a holistic version.

Nelson, a WSU Extension beef specialist, is a devotee of a decision-making process called holistic management, which focuses on the functioning of the four ecosystem processes–water cycle, mineral cycle, energy flow, and community dynamics–when managing natural resources such as rangeland. Holistic management looks to mimic the actions of large wild ungulates (buffalo) as a model for raising cattle.

He looks at the more than one million acres of idle land in the Conservation Reserve Program in Wash
ington and the cost of raising feedlot beef, both economic and environmental, and what he sees makes no sense.

CRP has a lot going for it in principle. The program was conceived to retire marginal cropland both for wildlife and conservation purposes and to boost grain prices by taking it out of production.

The problem with a lot of CRP land in the drier parts of eastern Washington is it gets “decadent as hell” says Nelson. The dried up plants undergo oxidative rather than biological breakdown, returning no organic matter to the soil. The plants “pedestal” their roots exposed, and the soil blows away around them.

His solution is to graze prudently. Planned grazing mimics buffalo. They graze the forage and disturb the soil surface, says Nelson, but only once or twice a year, like cultivating. Mow it down, fertilize it, get off. Eventually, it’s a beautiful thing, says Nelson. Good perennial groundcover, improved by grazing, holds water better and sequesters carbon.

Problem is, it’s against the CRP rules. Or the rancher gets docked for grazing.

Funded by the Legislature-mandated Ag Pilots program, Nelson is working with regional farmers and ranchers to figure out an alternative to CRP that sustains the land and produces as much or more revenue, which currently is $50-60 an acre.

He’s been working with Greg Beckley, who has 5,000 acres of land in CRP. Beckley’s spread is in Adams County, which gets 12-14 inches of rain a year, and the land is sandy and fairly steep. Much of his land, and much CRP land in general, is subject to wind and water erosion and is better off if never tilled.

However, rising grain prices tempt farmers to put CRP land back into wheat, land that should just stay in grass.

Now let’s re-introduce Joel Huesby ’86 ( WSM Fall 2003), a former grain farmer near Walla Walla, got tired of riding a tractor and put all his land in pasture. A few years later, he runs Thundering Hooves, a pastured beef (and other animals) business. Problem is, he can’t secure enough cows to meet demand for his meat.

So why not run cows for Huesby’s business on Beckley’s CRP land. Grazing on CRP is not without its problems. Some argue that CRP provides much-needed wildlife habitat, which is disrupted by grazing. However, Nelson says wildlife habitat can be protected and improved using planned grazing techniques. He considers grazing to be a tool that can be used to create the desired landscape.

Nelson considers grazing CRP as a way to add value to beef beyond the meat itself. “I don’t think you can have a sustainable system without integrating animals with plants” he says. “That is the way nature intended it.”

Recent economic fluctuations and rising fuel costs may have moved us into a new era, one in which our increasingly centralized and industrialized food production system may no longer be well-suited.

Feeding a projected nine billion people by 2050 presents a dramatic, and interesting, challenge, particularly with most of the best arable land around the world already under cultivation. Meeting that challenge will require much more creative approaches than simply scaling up.

Fleming, Kupers, and Nelson are hardly alone in exploring ways of farming differently. Throughout the university and across the state, farmers and researchers are exploring ways to counter what will surely be continuing economic and productivity challenges.

For example, the Center for Sustaining Agriculture and Natural Resources enlists a wide spectrum of WSU researchers to explore problems from the viability of the small family farm to adapting more climate- friendly agricultural practices.

Wheat breeder Steve Jones is developing new varieties of wheat to meet the demands of “organic” and (perennial production (WSM Summer 2004). He recently joined an international effort exploring more efficient use of nitrogen fertilizer.

John Fellman, in horticulture, has been participating in a project funded by the Gates Foundation to develop a more nutritious variety of cassava, a starchy staple throughout the tropical developing world. An interesting twist on this project is that it has avoided a major problem of ownership by requiring that all the genetic material used in the project be donated, an encouraging move away from private accumulation of genetic material.

Geneticist Mike Kahn is puzzling over a recently identified mutant Rhizobium and how it might direct legumes to produce nitrogen more generously and thus help supplant the use of industrially produced fertilizer.

Carol Miles, at the Mount Vernon Research Station, has for years been addressing both African and American small farm needs through evaluation and field trials of beans and other crops amenable to small-scale farming.

The list is long, not only of projects and ideas, but of needs. We live, the old Chinese curse notwithstanding, in interesting times. Food production challenges, such as labor and global climate change, lend a whole new level of intensity. We may, in fact, have reached a point where the land grant mission returns to its original intent, conducting research and educating farmers toward a new way of doing business.