May 27, 2022

What if the lights go out this summer?  How much food gets lost?

‘); googletag.cmd.push(function () { googletag.display(‘div-gpt-ad-1609268089992-0’); }); }

In February 2021, I wrote on the near collapse of the Texas electric grid and asked this rhetorical question: “how would you and your family like to be trapped in your car at 16 degrees below zero?” 

Given that it is summertime, and the living is theoretically easy, let me ask another one.  If the lights go out, how much refrigerated food will you lose?  Similarly, will you be able to replace lost food?

We have all seen huge food price increases and heard media reports of the potential for massive food shortages.  Among the many reasons, the Russian-Ukraine war taking out the “breadbasket of Europe” and simultaneously dramatically reducing critical fertilizers products looms large.  With no end in sight, this war will significantly impact global food supplies for some time.

‘); googletag.cmd.push(function () { googletag.display(‘div-gpt-ad-1609270365559-0’); }); }

Other global factors are also in play.  Flooding in China has had a detrimental impact on Chinese crops, and China has limited fertilizer usage in some fields.  Also, China is still recovering from a dramatic loss of its swine herds due to swine flu epidemics, creating a potential protein shortage.  No idea what the lockdowns will do.

India, one of the larger grain exporters, has placed severe restrictions on its exports to ensure adequate domestic food supplies.  Food riots in Sri Lanka are occurring.

Globally, the prices of grains are rising dramatically, creating the potential for almost unimaginable misery among the world’s poorest.

Closer to home, U.S. fertilizer prices have risen dramatically, in some cases fourfold in the last few years.  This not only creates huge upward price pressures, but impacts usage, potentially impacting yields. 

Also Union Pacific has reduced major U.S. fertilizer companies, like CF Industries, one of America’s largest, to shipping about 80% of their potential volumes.  This can result in some of America’s premier farmlands, the Corn Belt, not getting adequate fertilizer during the critical spring planting season.   

Ironically, “Union Pacific has said it is limiting rail traffic and hiring aggressively as part of a plan to improve service after grain and ethanol shippers complained about shortcomings.”  So U.P. is limiting the food supply to further limit the food supply by converting more corn into ethanol — a devil’s twofer.  And the Biden administration plans to increase ethanol limits.  A threefer.