Higher Food Prices And Shortages?
Our system has been betting on higher food prices since earlier this year, and of course the war in Ukraine has put upward pressure on food an energy. But now one of our Twitter correspondents warns we may have food shortages in America as well. Let’s start with the case for higher prices, then consider his warning of shortages and what to do about them.
Betting On Higher Food And Energy Prices
A month before Russia’s invasion of Ukraine, our system’s top names had shifted to an energy and food focus, as we noted in a post here at the time (Why Civilizations Collapse).
In that post, we noted we had two oil E&P stocks (Laredo Petroleum (LPI) and Antero Resources (AR)), two oil ETFs (ProShares Ultra Bloomberg Crude Oil (UCO) and VanEck Vectors Oil Services (OIH)), and a coffee ETN (iPath Series B Bloomberg Subindex Total Return (JO)) and a corn ETF (Teucrium Corn Fund (CORN)) in our top ten names.
Screen capture via the Portfolio Armor on 1/28/2022.
Since then, the energy and corn names have ripped higher (though coffee has cooled off a bit).
Of course, Russia’s invasion of Ukraine has played a role here. In addition to being one of the world’s top exporters of wheat (along with Ukraine), Russia is also one of the top exporters of agricultural inputs such as oil, natural gas, and fertilizer. The war, plus the sanctions regime in response to it, have raised food and energy prices and raised the prospect of food shortages in countries such as Egypt, which are dependent on wheat imports. America, as an agricultural superpower, seemed less likely to suffer food shortages.
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