We are dependent on oil to eat. Without oil, a significant portion of the Earth’s population would die of starvation. While in Kansas, I remember seeing a proud billboard that boldly stated that “One Kansas Farmer feeds 128 People and YOU!”
The signs should more correctly read “One Kansas Farmer, a fleet of heavy machinery, and thousands of gallons of oil, feeds 128 People and YOU!” Take the oil out of that clever slogan and you got yourself a field of weeds and 128 empty plates.

A smaller and smaller portion of the population is responsible for feeding more and of the population. It is the kind of imbalance that is alarming, similar to dreaded “income gap.” Family farms have nearly become a myth, and the vast majority of our urban population hasn’t the slightest ability or know-how when it comes to feeding themselves. Our food-supply is based on a vulnerable top-heavy infrastructure; in the United States we lack the buffer of a self-subsistent agricultural class. Oil is what fills the gaps in this design. Ten years ago, one Kansas farmer described the effort required in filling this gap: ”Eighty-five to 87 percent of the population today are parasites, … I’ve really got to work to feed these other people.”Behind a Seamless Facade, Clashing Opinions on Life (New York Times, By JO THOMAS, Published: November 12, 1998).

Just two weeks ago, I noticed that the price of bread at my favorite Kansas bakery had gone up substantially. The owners put out flyers apologizing, explaining that the price of wheat had doubled in the past couple months. Spring wheat was over $24 a bushel! The phenomenon is not restricted to wheat. In Colorado, my father reported corn prices over $5 per bushel — that’s as high as it’s ever been, much of it owing to the changing regulations of the stock market which now allow wider fluctuations on agricultural stock options via Exchange Traded Funds. That’s good news for my dad’s retirement, but bad news for people who actually need to eat corn. The insane sub-prime volatility of standard stocks have now been transferred onto our food supply. The United States only pays about 7% of its disposable income on food; in other countries that figure is much higher, so they are much more vulnerable to these fluctuations.

Rising prices and a growing fear of scarcity have prompted some of the world’s largest rice producers to announce drastic limits on the amount of rice they export. Again, this comes with stories of food riots and civil unrest as more and more countries become heavily dependent on imports and now face higher bills. Farmers are hoarding their harvests hoping for even higher prices, removing it from the food chain. High Rice Cost Creating Fears of Asia Unrest (New York Times, By KEITH BRADSHER, Published: March 29, 2008).

Another breaking point with this situation is the supply and price of oil: the food supply requires a significant amount of transportation, importing and exporting. Any volatility in the price of fuel is going to amplify an already tense situation.
The thought of stock market shenanigans plaguing the agricultural market is scary, but these types of options have existed in the oil market for a long time, putting the stability of our food supply on the table. Indeed, the stakes are rising.