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Advancing interconnected solutions to the food, energy and finance crises

The governing body of the United Nations Food and Agricultural Organization (FAO) met in Rome on April 8, 2022 in an Extraordinary Session to examine the “impact of the Ukraine-Russia conflict on global food security and related matters under its mandate” and advise on how it should proceed. Meanwhile, just two days earlier, the Civil Society and Indigenous People Mechanism (CSIPM) at U.N. Committee on World Food Security (CFS) called for an Extraordinary Plenary Session of the CFS.

We must consider these developments along with a new initiative from the U.N. and against the background of the FAO’s global food prices index reaching its highest level ever.

In response to the immediate crises provoked by the invasion of Ukraine by Russia, on March 14 the U.N. Secretary General (SG) António Manuel de Oliveira Guterres announced the establishment of the Global Crisis Response Group on Food, Energy and Finance (GCRG). On April 5, he released the GCRG’s initial recommendations. According to remarks made by the U.N. SG at the U.N. Security Council Meeting, these initial recommendations are for the consideration of the member states, international financial institutions and others. In brief, they are:

  • On food: To avoid the risk of hunger and famine spreading further, the GRCG urges all countries to keep markets open, resist unjustified and unnecessary export restrictions, and make reserves available to countries at risk of hunger and famine.
  • On energy: While some countries’ plans to release strategic reserves of fossil fuels in an attempt to reduce their dependence on Russian stocks could help ease the current crisis in the short term, the only medium and long-term solution is accelerated deployment of renewable energy, which is not impacted by market fluctuations. Renewable energy deployment is the best option in most cases and will allow the progressive phaseout of coal and all other fossil fuels.

…click on the above link to read the rest of the article…

Will You Starve to Death This Year?

Will You Starve to Death This Year?

World’s Largest Fertilizer Company Warns Crop Nutrient Disruptions Through 2023

World’s Largest Fertilizer Company Warns Crop Nutrient Disruptions Through 2023

The world’s largest fertilizer company warned supply disruptions could extend into 2023. A bulk of the world’s supply has been taken offline due to the invasion of Ukraine by Russia. This has sparked soaring prices and shortages of crop nutrients in top growing areas worldwide; an early indication of a global food crisis could be in the beginning innings.

Bloomberg reports Canada-based Nutrien Ltd.’s CEO Ken Seitz told investors on Tuesday during a conference call that he expects to increase potash production following supply disruptions in Russia and Ukraine (both major fertilizer suppliers). Seitz expects disruptions “could last well beyond 2022.”

Seitz said the conflict plus Western sanctions on Russia and Belarus has reduced fertilizer supply on global markets and could reshape crop nutrient trade, thus creating even more supply uncertainty.

“Could there be a change in global trade patterns as a result? We think that’s a possibility,” he said. 

Fertilizer disruptions could be a multi-year event. Already, farmers worldwide are reducing fertilizers, which may threaten yields come harvest time. The repercussions could be huge: Lower yields may exacerbate the food crisis. 

Here are the latest signs commercial farmers worldwide are reducing fertilizer usage because of higher prices or shortages.

Revealed last week, SLC Agricola SA, one of Brazil’s largest farming operations, managing fields of soybeans, corn, and cotton fields in an area larger than the state of Delaware, will reduce the use of fertilizer by 20% and 25%

Coffee farmers in Brazil, Nicaragua, Guatemala, and Costa Rica, some of the largest coffee-producing countries, are expected to spread less fertilizer because of high costs and shortages. A coffee cooperative representing 1,200 farmers in Costa Rica predicts coffee output could slip 15% next year because of soaring fertilizer costs. 

…click on the above link to read the rest of the article…

Ukraine war: World Bank warns of ‘human catastrophe’ food crisis

Ukraine war: World Bank warns of ‘human catastrophe’ food crisis

A combine harvester in a wheat field.IMAGE SOURCE,GETTY IMAGES

The world faces a “human catastrophe” from a food crisis arising from Russia’s invasion of Ukraine, World Bank president David Malpass has said.

He told the BBC that record rises in food prices would push hundreds of millions people into poverty and lower nutrition, if the crisis continues.

The World Bank calculates there could be a “huge” 37% jump in food prices.

This would hit the poor hardest, who will “eat less and have less money for anything else such as schooling”.

In an interview with BBC economics editor Faisal Islam, Mr Malpass, who leads the institution charged with global alleviation of poverty, said the impact on the poor made it “an unfair kind of crisis… that was true also of Covid”.

“It’s a human catastrophe, meaning nutrition goes down. But then it also becomes a political challenge for governments who can’t do anything about it, they didn’t cause it and they see the prices going up,” he said on the sidelines of the IMF-World Bank meetings in Washington.

The price rises are broad and deep, he said: “It’s affecting food of all different kinds oils, grains, and then it gets into other crops, corn crops, because they go up when wheat goes up”.

There was enough food in the world to feed everybody, he said, and global stockpiles are large by historical standards, but there will have to be a sharing or sales process to get the food to where it is needed.

Mr Malpass also discouraged countries from subsidising production or capping prices.

Instead, he said, the focus needed to be on increasing supplies across the world of fertilisers and food, alongside targeted assistance for the very poorest people.

…click on the above link to read the rest of the article…

Will We Have Food Shortages In America?

Will We Have Food Shortages In America?

Green milling tractor.
Aerial shot of a milling tractor (Tom Fisk/Pexels).

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.

…click on the above link to read the rest of the article…

Why You Might Need To Replace Your Seeds

Why You Might Need To Replace Your Seeds

If you are not saving your own seeds from year to year, purchase good, fresh seed stock from a reputable source. You should also look for organic heirloom seeds since anything else can be hit or miss when it comes to saving your seeds from year to year.

“Seeds are the forgotten heroes of food—and of life itself” —Christopher Cook

If you are not saving your own seeds from year to year, purchase good, fresh seed stock from a reputable source. You should also look for organic heirloom seeds since anything else can be hit or miss when it comes to saving your seeds from year to year.

4 Reasons To Choose Heirloom Seeds For Your Garden

As seeds age, their germination rate naturally declines. Seeds in good condition and stored properly will last at least one year and, depending on the plant, may last two to five years. Old seeds or seeds that have been stored improperly can lose their strength and vitality quickly. This can lead to a poor germination. But even more, those that do germinate from older seeds can be more weak and feeble plants than those that come from a fresh seed stock.

Use seeds that are no older than twelve to 18 months. In other words, if we purchase a new packet of seeds this year, we will keep the unused seeds stored safely in our refrigerator until next year to use one more time. After that, we discard the seeds and order new ones. For just a few dollars, it is far better to purchase seeds that are fresh and viable for planting. Obviously, in an emergency situation when seeds are not available or stores are closed, we could try to germinate older seeds

…click on the above link to read the rest of the article…

One-Third of Ukraine Farmland May Go Unplanted As Russia Begins ‘Second Phase’ Of War

One-Third of Ukraine Farmland May Go Unplanted As Russia Begins ‘Second Phase’ Of War

About one-third of Ukraine’s farmlands may not be harvested or cultivated this year as Russia begins the second phase of the conflict in the war-torn country.

The Food and Agriculture Organization of the United Nations (FAO) noted in a report on Tuesday that the “vast destruction of crops and infrastructure due to the war jeopardizes food production.”

FAO estimates approximately 33% of the crops and agricultural land may not be harvested because of the escalating war.

In March, Ukraine President Volodymyr Zelenskyy urged farmers to sow as many fields as possible to protect the food supply, but that appears to be a challenging task considering the displacement of people (labor shortage), bombed-out fields, severely damaged infrastructure, and shortage of everything (diesel, seeds, & fertilizer).

Ukraine is considered the world’s second-biggest shipper of grains and the biggest exporter of sunflower oil. The planting season has already begun — its crop production is vital to the global food supply.

Even if farmers were to sow as many fields as possible, their ability to export crops would be severely impacted during the harvest season due to damaged infrastructure, such as bombed-out rail systems, highways, bridges, and ports. Also, buyers of grains can barely get dry bulk carriers insured to transit the Black Sea to a Ukrainian port because of soaring war risk premiums.

Besides FAO, some private ag forecasters have warned crop harvests could be halved.

Forecast data from ag expert UkrAgroConsult show Ukraine’s corn output could be as low as 19 million tons, about half of last year’s 41 million tons.

There’s no question in our minds the impacts of continuing war will boost global food prices to new record highs. Ukraine is a top producing grains country and what this may spell next is a worldwide food crisis.

 

Global Rice Production Set To Plunge 10%, Threatening Half Of Humanity

Global Rice Production Set To Plunge 10%, Threatening Half Of Humanity

Farmers in China, India, Bangladesh, Indonesia, and Vietnam — the largest rice-producing countries could experience reduced output due to soaring fertilizer prices.

The International Rice Research Institute warns that harvests could plunge as much as 10% in the next season, equating to about 36 million tons of rice, or enough food to feed a half billion people, according to Bloomberg.

Chemical fertilizers, such as nitrogen, phosphorus, and potassium, are the most applied nutrients for high-yielding rice cultivation. Farmers have been particularly vulnerable to soaring fertilizer prices as some have reduced the amount of nutrients to save costs. This threatens future harvests as production declines could stoke food inflation for a crop that feeds half of humanity.

Humnath Bhandari, a senior agricultural economist at the institute, said the 10% drop in global rice production is a “very conservative estimate.” He said if the Ukraine conflict continued and fertilizer prices remained high and supply limited, then the decline of rice output could be even more severe. This may trigger a full-blown global food crisis, similar to the one that the UN has been warning about.

Russia and Belarus are big suppliers of every major type of crop nutrient. Western countries have sanctioned both, which have limited fertilizers shipments to the rest of the world, crimping supply and why prices are soaring. On top of this, Moscow has reduced or halted nutrient exports.

Nguyen Binh Phong, the owner of a fertilizer shop in Vietnam’s Kien Giang province, said nutrient costs have soared three-fold over the past year, forcing farmers in the region to reduce fertilizer use by up to 20% because of rising prices.

“When the farmers cut fertilizer use, they accept that they will get lower profit,” Phong said.

…click on the above link to read the rest of the article…

Is ammonia from green hydrogen a false prophet?

A brief history of nitrogen fertiliser

Since the Second World War, synthetic fertilisers, especially those made from ammonia, have played a major role in agriculture on almost all farms except those using organic methods. These have driven a dramatic increase in production through higher yields, but that has come at a high environmental cost in terms of greenhouse gas emissions, air pollution from ammonia, water pollution from high levels of nitrate and biodiversity decline in terms of delicate wild flowers and plants outcompeted by ranker vegetation better able to ulitise nitrogen.

Today, the UK uses just over one million tonnes of nitrogen every year, in over three million tonnes of nitrogen fertiliser, with different products containing different proportions of nitrogen. Ammonia is produced by the Haber-Bosch process – named after German scientists Fritz Haber and Carl Bosch who developed a method to produce synthetic ammonia in 1911. This process turns the inert nitrogen in the air we breathe into reactive nitrogen, by breaking the triple bond which holds nitrogen atoms together in pairs, then forcing them to combine with hydrogen. This requires a temperature of  500°C, 250 atmospheres of pressure (approximately 120 times the pressure in a typical car tyre) and an iron catalyst.

…click on the above link to read the rest of the article…

How You Can Prepare For the Next Global Food Crisis

How You Can Prepare For the Next Global Food Crisis

Whether we choose to look the other way or not, the planet is facing a food crisis. Even if your grocery store is fully stocked, it won’t take long for food to run out if people come from towns over because their store is out. The food crisis is looming and it is going to get worse before it gets better, so it’s best to prepare now.

Whether we choose to look the other way or not, the planet is facing a food crisis. Even if your grocery store is fully stocked, it won’t take long for food to run out if people come from towns over because their store is out. Recently, President Biden warned of food shortages due to the Russia-Ukraine war. The food crisis is looming and it is going to get worse before it gets better, so it’s best to prepare now.

If you already have a stockpile of food in a prepper’s pantry, you should go through everything and make sure you didn’t use things up or that some things aren’t close to expiring. If you are just beginning to put some food away for a rainy day, start with these 25 food staples. If they are close to expiring, use them now, and replace them.  For the rest of us, we should consider changing our shopping style when it comes to food. Gone are the days of running out to the store to splurge on a few expensive items. Prices are going up and we are staring down the barrel of what could be the worst food crisis in centuries.

…click on the above link to read the rest of the article…

Black Swan Event? Top US Fertilizer Producer Hit With Rail Delays To Midwest

Black Swan Event? Top US Fertilizer Producer Hit With Rail Delays To Midwest

A fertilizer supply shock is imminent for US farmers as CF Industries Holdings, Inc. warned Thursday that rail shipments of crop nutrients would be reduced to top agricultural states, which couldn’t come at the worst time as the Northern Hemisphere spring planting season is underway.

The world’s largest fertilizer company said Union Pacific had hit it with railroad-mandated shipping reductions that would impact nitrogen fertilizers such as urea and urea ammonium nitrate shipments to Iowa, Illinois, Kansas, Nebraska, Texas, and California. Union Pacific told CF Industries without advance notice to reduce the volume of private cars on its railroad immediately. This means CF Industries had to decrease shipments by a whopping 20% to stay compliant.

“The timing of this action by Union Pacific could not come at a worse time for farmers,” said Tony Will, president and chief executive officer of CF Industries.

“Not only will fertilizer be delayed by these shipping restrictions, but additional fertilizer needed to complete spring applications may be unable to reach farmers at all. By placing this arbitrary restriction on just a handful of shippers, Union Pacific is jeopardizing farmers’ harvests and increasing the cost of food for consumers,” Will said. 

The move is particularly problematic for the Midwest, where 90% of corn and 80% of soybeans are produced in the US. The region is a critical node in the global food system, and tightening the fertilizer supply will only drive up food prices by shrinking harvests.

Farmers have been pressured by record-high fertilizer and diesel costs.

CF Industries released an ominous warning about the lack of fertilizer across the Midwest this year and how it may cause food supply woes: 

…click on the above link to read the rest of the article…

Europe To Cap Potash Imports As Planting Season Begins

Europe To Cap Potash Imports As Planting Season Begins

The EU is expected to deliver another shock to its agricultural sector by capping Russian imports of potash, a crucial ingredient for growing food, according to Bloomberg, citing a Dow Jones report.

The European Commission is expected to imminently unveil broad new sanctions on Russia. Much of the fertilizer is purchased from Belarus; the landlocked country in Eastern Europe could also be slapped with new sanctions for its involvement in Russia’s invasion of Ukraine.

Potash is a key ingredient for agricultural fertilizers. Europe produces only a negligible amount of the fertilizer, and to potentially cap imports from Russia and or Belarus (top producers) seems idiotic for Europe as the spring planting season is only beginning.

Even if Europe were to rework its supply chains to import potash elsewhere, only a few other countries would export it. The impact of capping imports will send prices even higher and create fertilizer shortages for crops. This can dramatically affect crop harvests at the end of the growing season.

A handful of North American fertilizer stocks jumped on the report, including CF Industries +3% and Intrepid Potash 2%.

About 90% of potash is used as fertilizer in Europe; the rest is used to produce table salt, help slow the aging of wine, preserve canned food, and give chocolate its aroma.

Global spot prices for potash show prices continue to accelerate to the upside. This may discourage farmers from purchasing or even spread less of it during the planting season.

Even before the invasion of Ukraine, all fertilizer production in the West was declining (read: here) due to high natural gas prices. The shortage of fertilizers, not just potash, but also nitrogen and phosphates, on global markets, is inevitable. What Europe is doing to potentially cap potash imports from Russia and Belarus is idiotic and can spark a food crisis.

…click on the above link to read the rest of the article…

The Biden administration will pay farmers more money not to farm

The goal is to add 4 million acres of farmland to the Conservation Reserve Program, which takes land out of production to blunt agriculture’s environmental impact.

The Biden administration announced on Wednesday that it would expand a program that pays farmers to leave land fallow, part of a broader, government-wide effort to cut greenhouse gas emissions in half by 2030. The new initiative will incentivize farmers to take land out of production by raising rental rates and incentive payments.

The Conservation Reserve Program (CRP) was created in 1985 to incentivize landowners to leave some of their marginal land unplanted, a plan meant to protect the environment by reducing agricultural runoff into streams and rivers, preserving wildlife habitats, and preventing erosion. Today, the Department of Agriculture (USDA) “rents” about 21 million acres of farmland from landowners, typically for 10 years at a time—a tiny fraction of the total land farmed nationwide. In recent years, the number of acres enrolled in CRP has fallen, possibly because USDA’s rental payments have not been competitive with the open market, Chuck Abbott reported for FERN News.

The new announcement is a bid to incentivize farmers to enroll 4 million more acres of land in the program to total 25 million acres, the current program limit. “Sometimes the best solutions are right in front of you,” said Agriculture Secretary Tom Vilsack in a press release.

“A huge amount of money was essentially paid and then lost when those acres go back into farming.”

All told, the increased rental rates and expanded incentive payments—which pay farmers extra for growing buffer strips and promoting wildlife habitats—will increase CRP spending by about 18 percent, totaling $300 million or more in annual spending.

…click on the above link to read the rest of the article…

Limits to Growth: Natural gas fertilizer that feeds 4 billion of us

Limits to Growth: Natural gas fertilizer that feeds 4 billion of us

Preface.  In chapter 4 of my book “Life After Fossil Fuels: A Reality Check on Alternative Energy“, I explain how it came to be that fertilizer is made out of natural gas, using the energy of natural gas, and why it allows at least 4 billion of us to be alive. Yet natural gas is finite. And now there are shortages due to high prices.  In the U.S. Congress voted to allow natural gas to be exported several years ago, partly to help Europeans not become dependent on Russian gas and fall into their sphere of influence.  But now it’s costing farmers all over the world so much many will go out of business. In the U.S., especially small farmers who don’t get subsidies like the huge farms do.

High Natural gas prices in the news:

2022 Rising price of fertilizer is forcing NC farmers out of the business. North Carolina farmers say the cost of fertilizer has tripled over the past two years and is threatening to drive smaller farms out of the business entirely. The spike in cost has left family farms looking for ways to stay afloat while still producing enough food. As one of the most essential tools in agriculture, fertilizer makes up 15% of all farming costs in the U.S., according to the American Farm Bureau Federation. But since September 2020, the cost of fertilizer nationwide has spiked up to 300% as demand for its primary ingredients like ammonia and liquid nitrogen has soared. One farmer said that “Now everybody’s going to chicken litter, and we can’t even find the chicken litter now to do for our farm.”

***

2021 This Chemical Is in Short Supply, and the Whole World Feels It. New York Times.

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“Fertilizer Is Out Of Control” – US Farmers Ditch Corn For Soy To Save On Costs 

“Fertilizer Is Out Of Control” – US Farmers Ditch Corn For Soy To Save On Costs 

Fertilizer prices are at record highs following Russia’s invasion of Ukraine puts massive pressure on American farmers to transition to crops that need less fertilizer.

Bloomberg survey found that farmers will plant 2 million more acres of soybeans and about 2 million fewer of corn. That’s because soybeans require very little fertilizer versus corn.

Farmer Tim Gregerson of Omaha, Nebraska, said he’ll plant more soybeans this year because “fertilizer is out of control.” He said fertilizer prices spiked even before the Russian invasion, and it was then he decided to reduce the corn-to-soy ratio to about 50-50 this upcoming growing season.

On top of soaring fertilizer prices, he told Bloomberg, diesel, tractors, machine parts, feed for livestock, herbicide, and seed costs, and just about everything to do with farming are astronomically higher this year.

Farmer John Gilbert near Iowa Falls, Iowa, said his decision was made in January when fertilizer prices spiked.

A gauge of prices for US Gulf Coast Urea, US Cornbelt Potash, and NOLA Barge DAP, called the Green Markets North American Fertilizer Price Index, is up 43% since the Russian invasion and up 233% to $1,270 per ton since the start of the 2021 growing season.

The rising cost of natural gas, the primary input for most nitrogen fertilizer, has been one reason for rising fertilizer prices. Also, global supplies are expected to tighten as Russia will limit fertilizer exports to ‘unfriendly‘ countries. Russia is one of the biggest exporters globally — the US just so happens to be a large importer of nitrogen and potash from Russia.

Gregerson said due to global disruptions, “getting fertilizer is going to be more and more of a problem for the world in general.” In return, farmers will transition to crops that use less fertilizer — and it will be done globally.

…click on the above link to read the rest of the article…

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