… we have nothing to worry about. Food, cars, electricity, gasoline, toilet paper, are all available in abundance, with no fears about where our next roll of the soft white stuff will come from.
That is, until you go to the store or dealership and find out that shelves and car-lots are bare. Maybe not everything at the same time, but these shortages are popping up continually now. Something most of us have never encountered in our lifetime is suddenly staring us in the face. It’s irritating and inconvenient, but is it REALLY something to get worried about? We always manage to get by. Next year, the cars will be better and have even more exciting accessories. You’ve thought about trying a new brand of cracker and since your usual brand isn’t on the shelf, now’s the time. There isn’t any kernel canned corn, so it’s creamed corn today. You had your heart set on making a loaf of fresh bread, but there are no packets of yeast to be found. Little adjustments that are annoying but nothing to get upset about. But that’s today. What’s (not) in the stores tomorrow?
Let’s start with a few facts about food. In order to produce field crops, the ground has to be fertilized. Commercial production does not allow the sustainable and thoughtful rotation of crops from year to year. Smaller farms may be able to do this, but the big growers need all their land to produce, all the time. Specific crops have particular nutritional needs, and these have to be provided artificially on big farms. No problem, right? We can lay that fertilizer down in March for wheat and twice over the course of a few months for corn and our crops will be magnificent. Amber waves of grain!! Corn as high as an elephant’s eye on the fourth of July!!
Unless you can’t get the fertilizer. What happens then?
- Corn and Wheat – 30% to 50% reduction in production*
- Rice and Rapeseed – 19% to 76% reduction in production**
Take a minute to consider all the food areas that corn, wheat, rice and oil affect (hint: ‘moo’, ‘oink’, ‘cluck’). What does this mean to our ability to buy the food products we want? Well, nothing unless there is an interruption in sourcing fertilizer. How could this happen?
On April 19th of this year, U.S. fertilizer manufacturer CF Industries (CFI) advised its customers that railroad-mandated shipping reductions will result in nitrogen fertilizer shipment delays during the spring planting season. Union Pacific informed CFI, without advance notice, that it was mandating CFI and around 30 additional shippers, to reduce the volume of private cars on its railroad, effective immediately. Effectively, CFI was told to reduce its shipments by nearly 20%. Non-compliance, according to CFI, would result in the embargo of its facilities by Union Pacific. That means CFI will be unable to accept new rail sales involving Union Pacific customers for the foreseeable future.
As if that wasn’t bad enough, the USA is experiencing severely-restricted access to the source of fertilizers, too. Did you know the US receives about $10.3 billion worth of fertilizer from the Ukraine, or that $1.3 billion worth comes from Russia? So there goes that source for the foreseeable future! Maybe you’re a little uncomfortable with this info that crop yield is going to be down significantly. You should be. But wait, there’s more, and in the next part of this post you simply won’t believe what is happening.
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evidence of everything your discussing is starting to appear in stores. Perhaps more regional then anything at the moment, more and more I see prices spiking (not rising, SPIKING) in my local stores. And if one looks carefully, shelves are not always loaded with product and from time to time that favorite can of whatever is sold out.
But we need to understand over the last 30 years the global economy developed a logistics system call “just in time” which as the name implies means items were being shipped to arrive at retailers just in time to avoid being sold out. It worked as long as nothing impacted the supply chain.
We’re seeing things falling into place now now that are going to have an even bigger impact six months down the road come harvest time as Heidi so effectively called our attention to. If you wait for the talking man or woman on TV to tell you there is a shortage, your running to the store too late.
Look what happened during the pandemic with people fighting in store aisles over less critical items like toilet paper and paper towels. Now consider how people unprepared are going to react to a worldwide food or fresh water shortage.
A timely and well considered article.