A Famine Triad: Drought, Energy, and Inflation

Will the earth’s modern food production techniques continue to provide enough food for 8 billion people? ⁽¹⁾  Or, are emerging conditions for famine in play where a large percentage of people may face the risk of inadequate food supplies?

Food shortages often lead to famine conditions, then starvation, disease and death.  And, if food is available, it may become too expensive for many.

As a reminder, risk is an uncertain future event that may not occur, and if a risk is realized the consequences may range from negligible to catastrophic outcomes.

Food production and distribution might normally be considered a low velocity risk.  Low velocity means that when an adverse event occurs, such as too much or too little rain, the effect will not be felt by consumers for months or perhaps a year as supply chain stocks diminish.

When food shortages for the end consumer do occur, the delay between an adverse event and empty shelves (stomachs) may be many months.  Ample warning signals will exist for those aware, enabling mitigating steps to be taken.

A problem with a low velocity risk is that the risk itself may not be recognized by most people until it is too late for an effective response.

Lack of awareness of current and developing conditions, i.e., for those not paying attention, sudden occurrence of food shortages might look like a high velocity risk.  Akin to an aircraft engine failure upon takeoff, risk velocity is high and measured in seconds, not hours, with the consequences (impact on the ground) catastrophic.

For the unaware, food shortages might not be measured in seconds, but might be measured in hours or days. To the unaware, events begin unfolding rapidly, grocery store shelves are quickly depleted, and when food can be found, prices might be much higher.

How did the world reach this situation?  What conditions led to this?  When might the food shortages occur?  How many people might be affected?

Three concurrent conditions form a triad of drought, energy, and inflation risk factors.

Drought

Rapid increases in the cost of natural gas have disastrous effects on fertilizer production. High energy costs not only affect fertilizer production, but also lead to shutdown of indoor farming in Europe. ⁽²⁾

Recent reports on drought conditions in the USA indicate half of the Continental United States is experiencing drought conditions, affecting 134 million people.  Mississippi River water levels have dropped to record lows.  Nebraska’s Platte River, which empties into the Mississippi River, has completely dried up in places.

More importantly, especially for crops, top soil continues to dry out across areas of the Corn Belt affecting crop production in Indiana, Illinois, Iowa, Missouri, Nebraska and Kansas. ⁽³⁾ 

The United States is in its third year of drought, the worst in 1200 years. ⁽⁴⁾  The effects of the third year of La Niña induced dryness continue to be felt.  The soil is getting dryer, making it harder to grow crops.

According to one report 75% of farmers in the USA indicate drought conditions are adversely affecting crops.  Crop yields overall are down compared to previous years as much as 50% for rice, 10% for tomatoes, 20% for corn, and 45% for carrots.  Kansas is facing a 70% corn crop loss.

Drought does not just affect crops.  Cattle, pigs, and chickens rely on food stocks supplied by farmers.  Without food stock for cattle for example, ranchers reduce herd sizes.

Cattle herds are down in Oregon, New Mexico, and Texas anywhere from 15% to over 40%.  Bison meat is being harvested now due to drought-induced low food stocks and high food stock prices. ⁽⁵⁾

If drought is not enough, a new disease is threatening cattle in the USA.  Theileria, an invasive species first discovered in the USA in 2017. As of 2022, it has been detected in cattle in West Virginia, North Carolina, Tennessee, Kentucky, Pennsylvania, and Kansas. The prevalence of the fatal disease is increasing. ⁽⁶⁾

Europe is also experiencing once in 500 Year drought, reducing both crop yields and electricity generation.  Low moisture levels have spawned wildfires, also affecting croplands. ^{(7, 8)}

Energy

Natural gas availability and cost are key problems.  An August 2022 report indicated about 70% of all fertilizer production capacity in Europe has shut down.  The culprit is unprecedented natural gas costs.

Unless there is a turnaround in fertilizer production along with sharply reduced costs, food production costs will go up and not just in Europe. Less food follows less fertilizer. ⁽⁷⁾

Natural gas used in the Haber-Bosch process produces ammonia used to create fertilizers.  Fertilizers produced with this process contribute an estimated 50% of nitrogen used in global agriculture, with a much higher percentage in areas where population growth is faster.

In Germany, natural gas more than doubled in October 2022 compared to the same time last year, up 109.8%.  Firewood, wood pellets, and other fuels increased by 108.1%.  Heating oil up 82.8%, electricity up 26%, and gasoline up 22.3%. ⁽⁹⁾

Inflation

The cost of food is increasing, whether due to less supply and same or increasing demand or to devaluing the dollar, the effect is the same – higher prices.  For example, in California, onions and garlic harvested in the Summer of 2022 increased in price about 25%, with another 25% price increase projected for 2023. ⁽¹⁰⁾

In the United States overall, food price jumps in 2022 compared to 2021 include fresh and dried vegetables up 40.2%; grains up 30.4%; fresh eggs up 97.3%; pasta up 34% ; and turkey up 38.2%. ⁽¹¹⁾

In Germany, food prices have increased an overall 40% including a 73 percent increase in potatoes. Germany, with a decline in pig production, is reportedly now the largest meat importer in Europe. ⁽⁹⁾

Wrap-up:

No information has been found in the past six months that suggests lowering the likelihood of food shortages and price increases occurring in 2023.

Consequences of food shortages remain severe with the worst-case possibility of famine somewhere in the world.  Billions of people might be affected. ⁽²⁾

And, in areas where there might not be outright famine, the combination of inflation (devalued money) and food shortage driven price increases (supply and demand) may raise the cost of food and threaten food security for many low-income people.

Will there be a slow continuing decline in food availability resulting in shortages and price increases, forcing many people to change their eating habits?

Will there ultimately come a time (equivalent to engine failure upon takeoff) when food risk suddenly transitions to being unaffordable or unavailable with ensuing panic?

Will food shortages lead to famine, starvation, disease, and death?

We do not know the answer to any of these questions today.

The food risk factors of drought, energy, and inflation conditions are real enough though.  Time will tell.  Think the unthinkable.

Tradeoff future likelihoods (probabilities) of food becoming scarce and more expensive with a range of consequences you can tolerate.  Manage your food risk now, while you still can.

All risk is personal.

References:

1. United Nations. Department of Economic and Social Affairs. The global population is projected to reach 8 billion on 15 November 2022.  https://www.un.org/en/desa/world-population-reach-8-billion-15-november-2022.  15 November 2022.

2.Snyder, Michael.  The Food Crisis Of 2023 Is Going To Be Far Worse Than Most People Would Dare To Imagine.  http://theeconomiccollapseblog.com/the-food-crisis-of-2023-is-going-to-be-far-worse-than-most-people-would-dare-to-imagine/. October 16, 2022.

3.Fritz, Angela, and Miller, Brandon.  Mississippi River has dropped to record-low levels amid severe drought  https://edition.cnn.com/2022/10/22/weather/mississippi-river-low-level-drought-climate/index.html.  October 22, 2022.

4.Cook, Benjamin.  Megadroughts in the Common Era and the Anthropocene.  NASA, Columbia University.  https://www.drought.gov/news/megadroughts-common-era-and-anthropocene-2022-11-15.  Published November 15, 2022.

5.Rankin, Charlie Rankin. It’s Worse Than They are Telling You – Hundreds of Millions will starve.  Yanasa TV.    https://rumble.com/v1ou8wf-its-worse-than-they-are-telling-you.-hundreds-of-millions-will-starve.html.  Published October 20, 2022.

6. Lokting, Britta. A new tick-borne disease is killing cattle in the US. The emerging disease is threatening the livestock industry.  https://www.technologyreview.com/2022/11/17/1063352/new-tick-borne-disease-killing-cattle-in-us/.  November 17, 2022.

7. D.Gebre, Samuel, and Elkin, Elizabeth. Europe’s Deepening Fertilizer Crunch Threatens Food Crisis. https://www.bloomberg.com/news/articles/2022-08-26/europe-s-fertilizer-crisis-deepens-with-70-of-capacity-hit?leadSource=uverify%20wall. August 26, 2022.

8. Newburger, Emma. Europe is experiencing its worst drought in at least 500 years. https://www.cnbc.com/2022/08/23/europe-drought-worst-in-at-least-500-years-eu-report.html.  August 23, 2022.

9. Remix News. German food and energy prices push inflation to new highs in October. https://rmx.news/germany/german-food-and-energy-prices-push-inflation-to-new-highs-in-october/.  Available in German at:  https://www.welt.de/wirtschaft/article242072485/Inflation-Lebensmittel-und-Energiepreise-treiben-sie-auf-neuen-Hoechststand.html   November 11, 2022.

10. Snyder, Michael. The Era Of Cheap Food And Cheap Gasoline Is Over. http://theeconomiccollapseblog.com/the-era-of-cheap-food-and-cheap-gasoline-is-over/. October 11, 2022.

11. E. Carney, John. No Veggies for You! Food Inflation Surges as Eggs, Pasta, Vegetables, and Grains Get Even More Expensive. https://12ft.io/proxy?q=https%3A%2F%2Fwww.breitbart.com%2Feconomy%2F2022%2F10%2F12%2Fno-veggies-for-you-food-inflation-surges-as-eggs-pasta-vegetables-and-grains-get-even-pricier%2F.  October 12, 2022.