Global Food Economics: How to feed 8 Billion People – in her new book Hannah Ritchie investigates how to feed 8-10B people without destroying the planet. Currently 10% of the global population is undernourished or 800M people (2.5X the US Population). Looking at caloric production, global farms produce the equivalent of 5,000 calories per person per day – double the average person’s need. People not eating enough is caused by 2 major sources, allocation of crops and land going to biofuels and livestock vs malnourished folks. Secondly, local blockages caused by wars, natural disasters, or pandemic disruptions in regions. From the consumer side Ritchie surprisingly says the buying local and organic, are actually not high on the list of priorities. Food transportation only accounts for 5% of emissions from food, and while organic farming promotes biodiversity it also lowers yields, which requires more land and water for food production. In certain regions this can cause additional deforestation. The largest impact one can make is dietary change – consuming less meat. On average beef cattle give you 3% of the calories used to feed it. Clearly there are nutritional benefits of consuming meat but forgoing meat once a day or swapping it out for a meal or two per week could have a major impact on the global demand for meat, emissions, and land use.
Mortgage Rates remained unchanged this week as the price of Mortgaged Backed Securities moved sideways. This has been a consistent trend since late December. Rates are up approximately 0.5% from this time last year.
Inflation – the Personal Consumption Expenditures (PCE) report showed inflation rose 0.17% in December while the year over year reading remained at 2.6% increase. The core rate, which strips out food and energy also increased 0.17% in December. On a year over year basis the core rate fell 0.3% to a 2.9% year over year increase. This shows inflation numbers remain mild, a good sign for mortgage rates.
Home Sales – NAR reported that pending home sales increased by 8.3% in December, a strong number that brought the year over year increase up to 1.3%.
Economy – the first reading of Q4 GDP showed the US grew at a 3.3% annualized pace which was stronger than expectations. The Conference Board released their Leading Economic Index known as a broad look at the US economy and a reliable recessionary indicator. This index declined 0.1% in December marking the 21st consecutive month of negative readings. These figures signal an upcoming recession and Conference Board is predicting a short two quarter recession this year that will end by Q4.
Mortgage Applications – to purchase homes rose 8% last week and are down 18% year over year. Refinances fell 7% last week and are down 8% from last year.