Agriculture and her supply chain challenges in the world

Food Shortage Warning For Preppers - Harvest Data Indicates Trouble Ahead by youtube channel "ClearValue Tax"

(The text below is mostly transcriptions taken from the YouTube video)

In September of 2021 the price of fertilizer for corn was averaging 175 dollars per acre in September of 2022 it increased to 247 dollars per acre which is a 41% increase. for soybeans, it went from 85 an acre to 110. that's a 25 increase or up 29%

Oil price 

Despite the recent drop, retail diesel price has still increased by 43% from a year ago

On top of increasing input costs this year's growing season, it's been plagued by bad weather here and internationally from America to France to China. The consequences are showing up in the Harvest data and shrinking inventories. Corn inventory (the world's corn stocks) they're down to 12-year lows and it's expected to get worse by the end of the 2022-2023 crop year.  Corn inventories will be down to 80 days' worth of consumption this is going to be smaller than in 2012. 

When we had the global food crisis and rioting according to Reuters wheat inventories are expected to drop to nine-year lows. They're expecting U.S soybeans to fall to nine-year lows as well if you're going to have lower yields in corn soybeans. This is also going to have consequences for dairy and livestock Farmers that rely on those crops to feed their animals. So it's going to be a vicious cycle of food price inflation and shortages. 

Now let's take a look at the Harvest data and the crop yields (of the US and international).  According to the USDA's National agricultural statistics service in U.S corn production is down eight percent compared to 2021. Soybean production is down three percent from 2021. Analysts were expecting a drop in corn but the drop in soybean production was unexpected. So it's been a consistent theme all around the world: higher input costs for fertilizer and diesel fuel prices. Bad weather from droughts to flooding and lower crop yields in the European Union. 

The Corn Harvest is in full swing the European Commission is forecasting a harvest of 55 million tons. This is the lowest yield since 2007. So this is the worst harvest in 15 years. The EU they had its problems worsened by the droughts and the heat waves this summer.

• Hungary was hit the worst their agricultural - Ministry said that their crop yield will fall by 50 this year to 3 million tons. So they're going to be flipping from a net exporter to a net importer. 
• France's lowest production in three decades. 
• Italy's crop yields are expected to fall by 40 percent. 
• Germany Corn Harvest to Fall by 19.  
• Ukraine harvested 42 million tons of corn last year this year. They're expected to harvest 25 million tons, that's a drop of 40 percent. they're still having difficulty exporting their wheat as well even after the UN-brokered deal with Russia.
• The UK's environmental agency is reporting falling crop yields on onions to beets to potatoes ranging from 10 percent to as much as 50 percent.
• The floods in Pakistan have affected 1/3 of the country, leading to 3.4 million children facing chronic hunger and destroying 2.6 million acres of agricultural land.

The recent decline in food prices that's because of a stronger US dollar has brought down prices.  Shipping costs have declined, multiple countries have lifted their export restrictions.

For more details, please refer to the link below:

Source: https://www.youtube.com/watch?v=9y90fjRS4cQ&t=43s 

How vital is the Mississippi River for U.S Commerce? 

Between 2015 and 2019, 95% of corn 94% of soybeans and 45% of wheat moved by barge through the Mississippi River.  Now we have dangerously low water levels, threatening the flow of grain exports said Peter Friedman, the executive director of the Agricultural Transportation Coalition.

Grains are carried by barges through the hinterland river networks.   1 barge's payload is equal to that of 138 semi-trucks.  Barges move in tow (4 in one trip) that represents a payload that is equivalent to over 550 semi-trucks.
The US does not have spare trucking capacity - in both trucks and drivers to meet this shortfall.  

Could we look to rail to bridge the gap left by Barging?
Rail and barge are different as rail typically go east to west but barge goes predominantly north and south.
The barge operators are likely to load their barges with lesser cargo due to the lower water levels.  This dramatically increases the costs of transportation incurred.
Soya beans are more vulnerable than corn - once damaged, this leads to loss of more revenue. 

Source: https://www.youtube.com/watch?v=fXx6YNlRa2E

My ending muse

However, with increasing costs of fuel, fertilizer, energy, and logistics, it looks like food inflation & food insecurity are likely to continue.  Unfortunately, developing nations are facing most of the heat due to affordability and inflationary challenges.  We are staring at food insecurity on a global scale with IMF mentioning that 1.3 billion in the world are under threat.

The world is facing threats of fuel (energy), food and finance, complicated by geopolitical tensions of wars, weather extremities, natural disasters and supply chain challenges.  Let us continue to be prudent.  It is good to live within our means, set aside "cash for crash" and also to be prudent in this volatile climate.