The UN Secretary-General told the G20 Summit, “We are on the way to a raging food catastrophe,” with “five separate places facing famine.” He warned that this year’s affordability issues will lead to food shortages in 2023.
Ukraine’s 2022 grain harvest will fall to 51 million mt in 2022 from a record 86 million mt in 2021 because of Russia’s invasion. Farmers have so far harvested around 39 million mt.
Argentina’s third year of drought threatens the country’s farm sector. Some farmers have lost their entire wheat crop. If it doesn’t rain soon, soybean production could also be hit. Meanwhile, California’s historic drought could cost the state’s farmers $3 billion.
Floods in Australia could reduce the protein content of their wheat, turning much of the harvest into grain fit only for animal feed and reducing the quantity for flour milling.
Higher interest rates will add to farm costs and may begin to impact US agricultural production. The sector’s total interest expense could hit $26.45 billion this year, nearly a third higher than last year and the highest in inflation-adjusted terms since 1990.
A threatened national rail strike in the US could add to farmers’ woes. CNN estimates it could cost the country $1 billion.
Truck drivers protesting the recent election results are blocking traffic in NNE Brazil. So far, the action has not affected exports, although truck freight rates have risen 20 per cent.
The UK is suffering an egg shortage following the country’s worst outbreak of bird flu on record. Bloomberg argues that the crisis is another example of the fragility of the food supply chain.
The US has blocked imports of sugar produced in the Dominican Republic by the Central Romana company on the suspicion that the miller employs forced labour.
Indonesia’s Bulog plans to import up to 500,000 mt of rice to add to reserves and buy another 500,000 mt of rice from local farmers.
The IMO will shortly introduce new environmental regulations that index the carbon intensity of individual ships. The measures seem to please no one. However, there is hope on the (distant) horizon. In the future, most cargo ships should be partially sail-driven.
In company news, Nestlé announced that it would invest $1.86 billion in Saudi Arabia over the next decade, starting with a factory to make infant products and ready-to-drink coffee. Meanwhile, Nespresso is launching compostable coffee pods to complement their (already recyclable) aluminium ones.
Cargill has a new CEO, the tenth in the company’s 157-year history.
Bunge has agreed to buy 49 per cent of France’s BZ Group, the owner of a silo facility in Rouen, which exports around 1.5 million mt of agricultural commodities annually.
In biofuel news, Brazil announced it will maintain its mandatory biodiesel blend at 10 per cent until 31st March 2023, when it will increase to 15 per cent. However, the incoming administration promptly said it would cancel that decision and increase the mandate to 14 per cent in January.
The percentage of the US labour force employed in agriculture is likely to fall even further with the advent of self-driving tractors and farm equipment. About 1.3 per cent of the US labour force is engaged in farming, down from 60 per cent in 1850 and eight per cent in 1950. (Agriculture employs up to 80 per cent of the workforce in some African countries.)
Regarding technology, the US is going the way of the Netherlands, the world’s second-largest exporter of agricultural products by value (after the US).
The Economist writes that attempts to increase cocoa prices and boost cocoa production in West Africa are not succeeding.
Wired Magazine argues we couldn’t feed the world without processed food (spam, anyone?). Wired is less optimistic about vertical farming, arguing that it will have little impact on the world food supply if it only grows salad.
Finally, the Visual Capitalist has some graphics that show where our food is grown – far from where most of it originated.
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