A world grain shortage puts tens of millions at risk
103 comments·May 21, 2022
Logistics I think is large part of it. Another part is going to be the fertilizer shortage.
> Russia also exported 11% of the world's urea, and 48% of the ammonium nitrate. Russia and Ukraine together export 28% of fertilizers made from nitrogen and phosphorous, as well as potassium, according to Morgan Stanley.
Belarus potash exports, 18% of global supply, were also cut off in January due to US sanctions. This will force their dependence on Russia, with a Belarusian port on Russian soil, and for now they are struggling to export any of it.
Here's some perspective on current fertilizer prices: https://blogs.worldbank.org/opendata/fertilizer-prices-expec...
Famines are rarely caused by the lack of food. The necessary food usually exists somewhere, but those with the ability to deal with the situation are often unwilling to do so. Either they have better uses for the money and other resources or they just think it's not their responsibility.
There are more issues than that, such as exchange rates. Also many populations around the world spend almost their entire income on food and still can barely survive. They are very price sensitive. If the price of wheat doubles it's almost irrelevant for us in the west, but potentially lethal for many in the third world.
Honestly, just using existing corn less wastefully in the US might solve the problem.
> Just a 10% increase in production in the US alone
And how does that happen? Be very specific and quantitative. For example, which land gets planted that isn't planted now. Or, which crop gets replaced. Where do the inputs come from and how is that paid for? (Be sure to include equipment.)
Bloomberg notwithstanding, US farmers are actually fairly technically sophisticated. They're also money driven and competent.
Futures? This is what they’re for. Agriculture deals with shocks all the time. Nobody’s going to give you a centrally planned rundown.
Futures is just how farmers could pay to produce this extra 10%, assuming that everyone involved believes that farmers could deliver at less than the "raised" amount.
Futures doesn't address any of the "how do they actually do it" issues that I raised.
Ukraine is a big exporter of wheat and other grains. Combined with the fertilizer shortage, there's not a good way for global production to adjust in time for food security not to be an issue.
Why do you think it would be trivial to just increase production by 10%?
Before the invasion of Ukraine, covid has already wreaked havoc with agricultural supply chains. The war in Ukraine has made things worse but things were going to be bad even without it.
It was government actions related to covid which wreaked havoc on supply chains.
And endless wars are also government actions.
> It was government actions related to covid which wreaked havoc on supply chains.
A million dead in the US was always going to wreck havoc, not even counting the people in hospital. For all we know it would have been much worse without government action.
> And endless wars are also government actions.
That is not very helpful. Countries in the Middle East dependent on grain from Ukraine had absolutely no way of avoiding the war, and yet will bear the consequences. From their point of view, it is an uncontrollable calamity just like COVID.
Do you mean something like a "causal loop diagram" as mentioned in this article? https://www.transentis.com/understanding-the-beer-game/en/
(albeit at a larger scale and with more products and filter-by-country)
That's probably part of it, yes.
During peak covid vaccine ramp up, special plastic bags used in vaccine production were single source. So were the lipids and the factory to encapsulate the vaccine.
We saw mask and gown shortage, oxygen shortage, needle shortage.
As soon as humans grow multiple stomachs, we'll be all set.
What % of livestock feed requires four stomachs? What % of the land used for that feed grows crops that could not sustain people?
If you don't know the answer to either of these, you're full of shit.
The common knowledge says there is enough food produced for everyone to not go hungry... but people want more than to not go hungry and they want it to be efficient for their life not for the food production/consumption ratio
The global wealthy can afford convenience and excess while the global poor can't afford basic needs. As such "it's just in the wrong place, so it's cheaper to throw away" is a desired outcome for the wealthy not a problem triggering inefficiency. It's also best to not equate food usage efficiency to general efficiency as a lot of the excess is the result of more food being cheaper than efficiently consuming less food. E.g. growing 100 apples to have 100 actually consumed apples takes a lot of effort to make happen. You have to make sure none go bad in transport, all are immediately sold at the store, and that people heavily plan out their lives around eating every apple they buy before it goes bad. It's just more efficient as a whole to make more apples even if that makes food efficiency look worse.
Carrying that forward whether or not there is a "global shortage" (taken to mean not enough produced for everyone to not go hungry) is irrelevant. People are already going hungry today so "enough that everyone can be fed" can't be the controller of why the wealthy can afford excess. The ability comes from their production and purchasing power compared to the world not the overall averages of the world.
Of course simple economics still exists and less of the good will result in a raise of price, the question of course being how much not working from decreased consumptions backwards. That raise in price is only proportional to how much is needed to lower global consumption. It's not a guarantee the wealthy will notice enough of an impact to no longer be able to afford excess. In reality the poor that were already short on food will see a bigger decrease in consumption than the wealthy due to price increases. A 10% price increase in food is only inconvenient for most in wealthy countries but in poor countries many have no choice but to consume less food as they have no more money to spend on it.
If I had to guess this shortage won't be near enough for production to be less than ideal distribution coveraging hunger. That said it'll still affect prices, just probably not enough for wealthy countries decreases in excess to have a meaningful impact on the overall supply.