I am hearing and seeing warnings about potential food shortages due to the war in Ukraine. The president even read something about it from his teleprompter. Google or Duck food shortages and you will see hundreds of articles talking about how the bad is going to get worse. This is a foreseeable crisis. What are we doing about it?
Now Google or duck duck food shortage bio fuels; food shortage ethanol. Crickets currently. A few food shortage articles from the late 2000s forecasting increased prices and shortages. Why is this?
What would Putin do tomorrow if Biden announced American farmers would begin transitioning away from bio fuels to wheat and food with massive public investment to "warp speed" this transition? We could totally negate ANY reliance on Russian wheat. Add a focus on American energy independence to become a net positive exporter of oil energy also at "warp speed" ? What leverage would Putin have?
Remove the regulations and subsidies propping up the production of ethanol and subsidize transition back to food. It is unconscionable that we are burning food...... common sense.
Ethanol has become the third rail amongst the political class. This crisis should be a wake up call. ( Even Trump is for Ethanol)
Right, I work in shipping and want to point out a few things.
This is sort of missing what the upcoming food crisis is.
It is a crisis in the supply chain, because global supply chains as a whole are very reliant upon Wheat grown in Ukraine, and to a much lesser extent Russia plays a major role in international food.
This is important for several reasons.
1: we effectively had near total loss of the Ukrainian harvest this year, due to the war preventing the harvest.
2: in a hypothetical best case scenario, namely the war suddenly ending, would still leave Ukraine with much of its fields unplanted, a lot of productive land rendered temporarily unusable due to damage, a lot of farm equipment destroyed, it’s agricultural workforce eliminated as they have been conscripted, killed, or are displaced, and it’s infrastructure is destroyed.
This means that there is not going to be a Ukrainian harvest next year. It’s simply not going to happen at any meaningful scale.
Therefore food insecure nations are going to be desperate for grain stocks, as no one knows how long this disruption will last, or how serious it could become, and nobody wants to be left holding the blame in a food crisis. Therefore the price of wheat and other basic commodities will rise significantly due to desperation and a genuine shortage. For example, there will be hunger in Iraq next year at a minimum.
It will be poorer countries being willing to pay a premium for basic foodstuffs that cause these problems, rather than the US being unable to produce its own.
The price disruption is what will hurt the US economy. A lot of US foodstuffs will be exported elsewhere to make a profit, which may worsen the situation for the very poorest in the USA. Russian grain supply is much more important to the Middle East and Central Asia than the US. We expect US sanctions to interfere with the profitability of importing Russian grain into the USA, and Canadian foodstuffs will likely raise in price as the market will be willing to pay more than normal.
Stopping biofuels is not even remotely plausible to prevent foodstuff price increases. It takes time to grow crops, and often biofuels are grown on soil that would not grow wheat or corn at profitable yields. The US is genuinely incapable of preventing this problem.
However they could minimise it by preemptively creating federal stockpiles, but that’s unlikely as it could cause a panic, or by intervening in the market, reducing beef subsidies and increasing the viability of growing wheat over cattle feed, but again, this would be unpopular and would make beef unaffordable, which would have its own long term consequences.
TLDR: This is a global problem, and cannot be addressed without a global outlook. There isn’t the time to totally change agricultural production without massive government intervention. So it will not happen.
