This interesting report by the USDA looks at actual energy use in the U.S. food system. Interesting findings include this:

while total per capita U.S. energy consumption fell by 1 percent between 2002 and 2007, food-related per capita energy use grew nearly 8 percent as the food industry relied on more energy-intensive technologies to produce more food per capita for more people.

And this:

A projection of food-related energy use based on total U.S. energy consumption and food expenditures in 2007 and on the benchmark 2002 input-output accounts suggests that the U.S. food system accounted for 15.7 percent of total U.S. energy consumption in 2007, up from 14.4 percent in 2002

The increase was attributed to the following factors:

Population growth accounted for 25 percent of the higher food-related energy use in 2002 versus 1997. Higher food expenditures also boosted U.S. food system energy use by 25 percent. The use of more energy-intensive technologies accounted for about half of the 1997-2002 food-related energy increase.

All of the above, and much more in the report itself provide a useful, fact-based illustration of the linkages between food, energy, economy and capital that were described in the recent “Peak Capital” post. In particular, hard numbers help focus the mind on the most important consequences of peak oil – the threat to our food system. Peak oil means less energy available to the world economy to carry on “doing what it has been doing” yet that same world economy is still increasing the energy intensity of agriculture so as to produce “more food per capita for more people”.

7 October 2010: In the age of peak oil (followed by decline) something has to give. Either we will continue increasing the energy intensity of agriculture to produce increasing food output, therefore leaving a lot less energy for “everything else” that is not food: this will mean rising energy and food prices relative to other goods and assets, a fall in the disposable income net of expenses on food, and therefore a shrinkage of the discretionary side of the economy. Or, we will reduce the energy intensity of agriculture, in which case we will have to start absorbing the unemployed into the agricultural sector to maintain the required growth in food output levels: but, from a biophysical economics standpoint, food production by human labour unassisted by capital and fossil fuels is a low “energy returned on energy invested” activity, which is why the labour of farm workers has always been relatively poorly compensated. Increasing the ranks of poorly compensated people also leads to shrinkage of the discretionary side of the economy. Thus, if peak oil reduces the flow of energy available to our economy, a persistent deflationary headwind dampening down aggregate demand appears in entire sectors of the economy. Intuitively, it makes sense: food production was the first organized activity of human society, before we started doing a whole lot of other things when we started using more energy by cutting down forests, then digging for coal and then drilling for oil and gas. Food production will be the last activity we would give up if or when declining energy flows per capital force us to make some very hard choices.