Farm-ageddon: The world’s food supply is under threat as a storm of rare conditions brews
A new crisis is building... From fertilizing manure to tractor-fueling diesel, the inputs that power the world’s agriculture industry are in short supply. Why it matters: these shortages make it hard for farmers to feed the world and have caused global food prices to surge at their fastest pace ever: a record 13% jump last month. The pandemic gave us shortages and sticky inflation. Now Russia’s war on Ukraine — plus Covid lockdowns in China’s farming provinces — are making a bad situation worse.
- Pricey breadbasket: Wheat and corn prices soared more than 19% last month as war + sanctions crush supply from the key Black Sea “breadbasket” region.
- Empty breadbasket: Food staples are running low as Russia bombs Ukrainian wheat fields and critical shipping ports remain closed.
- FYI: Russia is the world’s largest wheat exporter, while Ukraine accounts for a quarter of all grains trade and is the #1 exporter of sunflower oil.
Corn Flakes price hikes… are just one ripple effect from a major crisis. Americans notice food inflation in the form of pricier General Mills Cheerios or Kellogg’s Pop-Tarts. While US food prices are up 8% from a year ago, the latest rally is hitting the world’s poor hardest. Countries in the Middle East and North Africa, for example, are feeling the brunt of food shortages because they largely import their staples. Russia’s war could plunge 40M more people into extreme poverty if it continues this way.
It’s an imperfect storm… From the pandemic and war to severe weather and historic droughts, a rare combo of terrible circumstances is putting every aspect of food production under pressure — all at once. Global food prices have surged 75% since mid-2020 and are expected to keep climbing. The UN said it’s putting some people in poorer countries at a “breaking point.” Food insecurity is known to lead to more civil conflict and unrest — it was bread prices that helped spark the Arab Spring over a decade ago.