Families Face Massive Food Insecurity Levels (#GotBitcoin)
A recent study released by Feeding America indicates that after nearly 10 years, food insecurity levels for most communities across the country, including Kentucky, had reached crisis levels. Families Face Massive Food Insecurity Levels (#GotBitcoin)
Food insecurity is a measure defined by the USDA as lack of access, at times, to enough food for an active, healthy life for all household members.
In conjunction with the Map the Meal Gap study, which uses the most recent data from the United States Department of Agriculture (USDA) and Census Bureau, Feeding America has released an interactive map based on its recently released study, The Impact of the recession on Local Food Insecurity, which used the Map the Meal Gap model to predict changes to food insecurity rates for the overall population and children in response to projected changes to poverty and unemployment in the wake of the economic slow-down.
That analysis shows that progress made to food insecurity in the U.S. this past decade will likely be wiped out and food insecurity rates will climb higher than the peak of the Great Recession, potentially going from more than 37 million people facing hunger in 2018 up to more than 54 million in 2020. In Kentucky, an additional 234,000 people could become food insecure in the wake of the slow-down.
Per Map the Meal Gap 2020, food insecurity exists in all 120 counties. Kentucky has the eighth-highest rate of overall food insecurity in the United States. The report also shows that children are more likely to be food insecure, with the child food insecurity rate at 18.9% compared to 14.8% for the overall population for Kentucky. Kentucky’s child food-insecurity rates remain higher than the national rate of 15.2%.
Overall food insecurity in Kentucky ranges from a low of 6.9% of the population in Oldham County up to 24.8% in Harlan County. The analysis also finds that 33% of residents of Kentucky who are food insecure are likely ineligible for federal nutrition assistance under current program requirements.
This means that many households must rely even more on charitable food assistance. According to the economic impact analysis, all counties across the country will likely see increased rates of food insecurity. In Kentucky, the pandemic is projected to increase the food insecurity rate by 35%. Nearly 900,000 Kentuckians (897,000) Kentuckians may experience food insecurity because of COVID-19.
Analysis shows that progress made to food insecurity in the U.S. this past decade will likely be wiped out and food insecurity rates will climb higher than the peak of the Great Recession of 50 million people, potentially going from more than 37 million people facing hunger in 2018 up to more than 54 million in 2020.
“Map the Meal Gap shows once again that not one single county in this country is free from hunger,” said Claire Babineaux-Fontenot, chief executive officer of Feeding America. “In the decade before the pandemic, we made progress in finally returning to pre-Great Recession levels of food insecurity, though that number was still regrettably high. That fragile progress has given way under the weight of this crisis. The Feeding America network of food banks knows all too well the precarious nature of household budgets. We also know that the work that we do has great potential to help and we cannot make meaningful progress alone. Our vision is an America where no one is hungry. Join us in making that mission a reality for the tens of millions of people out there who need us now more than ever.”
Per Map the Meal Gap 2020, all 3,142 counties and county equivalents as well as 436 congressional districts in all 50 states are home to people who struggle with hunger. The percentage of the population estimated to be food insecure in 2018 ranges from a low of 3.6% of the population in Burke County, North Dakota up to 30.4% in Jefferson County, Mississippi. Child food insecurity rates range from 2.4% in Falls Church City, Virginia to 43.7% in East Carroll Parish, Louisiana.
According to the COVID-19 impact analysis, the food insecurity rates for all counties across the country will likely see increases.
For example, Jefferson County, Mississippi, the county with the highest overall food insecurity rate is projected to increase from 30.4% to 34.2% this year. Burke County, North Dakota, which had the lowest overall food insecurity rate in 2018, is projected to see a food insecurity rate (9.2%) more than 2.5 times its most recent rate (3.6%). In East Carroll Parish, Louisiana, more than half the child population is projected to be food insecure, with the rate going from 43.7% to 52.5% because of the pandemic.
While food insecurity affects every community, people of color and African Americans, in particular, are disproportionately impacted as a result of structural disparities. In 2018, food insecurity among African American households was more than twice that of white, non-Hispanic households according to the USDA.
Structural and institutional racism have positioned communities of color as particularly vulnerable to the economic fallout and health consequences of this pandemic. Systemic barriers to jobs less likely to be affected by the pandemic, lower than average wages, and greater employment instability all contribute to African American workers being more at risk of experiencing food insecurity.
Both pre-pandemic and in 2020, counties with the highest rates of food insecurity are overrepresented by counties with a majority African American population. For example, in Jefferson County, Mississippi, which has the highest food insecurity rate in 2018 and highest projected rate in 2020, 86% of the population is African American.
These Feeding America studies underscore the extent of need that remains in communities across the United States. Food insecurity is a measure defined by the USDA as lack of access, at times, to enough food for an active, healthy life for all household members.
Other Key Findings Of Map The Meal Gap 2020 Include:
* One-third of people who are food insecure may not qualify for federal food assistance. Virtually every county (97%) is home to people who are food insecure and likely ineligible for such assistance, and there are 115 counties in which a majority of people estimated to be food insecure is unlikely to qualify.
* Counties with the highest rates of food insecurity are disproportionately rural. Rural counties – those outside of major metropolitan areas – make up 63% of all U.S counties, but 87% of counties with food insecurity rates in the top 10%.
* An estimated 84% of counties with the highest rates of food insecurity – those that rank in the top 10% of all 3,142 counties – are in the South. Since the South contains 45% of all U.S. counties, this region is home to a disproportionately high number of counties with the highest rates of food insecurity.
“Hunger in America must become unacceptable for all of us,” Babineaux-Fontenot continued. “There were 37 million people facing hunger before the pandemic, but most people had no idea. If there is any ‘silver lining’ to the dark cloud of this pandemic, it is that the American public is far better informed about the food crisis that has accompanied the health one. We know it will take an entire network of support, including food banks, partner agencies like food pantries, federal nutrition programs, the food industry, and the public to make the progress that is so desperately needed.”
Map the Meal Gap 2020 uses data from USDA, the Census Bureau, Bureau of Labor Statistics and food price data and analysis provided by Nielsen, a global measurement and data analytics company. The study is supported by Conagra Brands Foundation and Nielsen.
“Conagra Brands Foundation is proud to partner with Feeding America and food banks across the country to help provide food to children, teenagers, adults and senior citizens. Helping to increase awareness of this critical issue, which affects every community in America, has never been more important,” said Robert J. Rizzo, Senior Director, Community Investment, Conagra Brands and Conagra Brands Foundation.
In addition to food-insecurity estimates, Map the Meal Gap reports on food price variation across counties. Using data from the Census Bureau’s Current Population Survey (CPS), the study finds that, on average, food-secure individuals report spending $3.09 per person, per meal as of 2018. This is essentially the same as the national average of $3.02 ($3.09 in 2018 dollars) as reported in Map the Meal Gap last year.
After adjusting the national average meal cost of $3.09 based on local sales taxes and Nielsen data on relative food prices, Map the Meal Gap 2020 finds that county meal costs range from 69% of the national average in places like Llano County, Texas($2.14) to more than double the average cost in places like New York County, New York($6.19).
“Nielsen is proud to continue our decade long data and analytics partnership to Map the Meal Gap. Eliminating hunger is especially urgent with so many vulnerable people during the COVID-19 pandemic,” said David Rawlinson, CEO, Nielsen Global Connect.
Dr. Craig Gundersen, Professor of Agricultural and Consumer Economics at the University of Illinois, Executive Director of the National Soybean Research Laboratory and a member of Feeding America’s Technical Advisory Group is the lead researcher of Map the Meal Gap 2020 and the food insecurity projection analysis.
Map The Meal Gap 2020 Provides The Following Data Online Through An Interactive Map:
* The estimated percentage of the population and number of individuals who are food insecure in every U.S. state, county and congressional district, as well as the service area of each Feeding America food bank.
* The percentage of the food-insecure population who likely qualifies for SNAP and other federal nutrition programs.
* The percentage of the food-insecure population who likely does not qualify for federal nutrition programs and thus must rely even more on charitable food assistance. These percentages reflect individuals in households with earnings that are higher than the state gross income limits for federal nutrition programs.
* The average meal cost in every state and county.
* The food budget shortfall in every state and county.
The Map the Meal Gap 2020map allows policymakers, state agencies, corporate partners, food banks and advocates to develop integrated strategies to fight hunger on a community level.
Separately, a new interactive map shows the 2020 food insecurity projections compared to the most recent Map the Meal Gap data. To account for local unemployment variation, this new analysis adjusts the national annual unemployment projection due to COVID-19 using projected changes in the unemployment rate by industry and occupation from Goldman Sachs Investment Research and actual percentages of workers by industry from the American Community Survey.
Along with the interactive map and visualizations, Feeding America has also published a series of report briefs, including a summary of key findings as well as analyses on child food insecurity, food price variation and health, disability and food insecurity.
Federal nutrition assistance programs, such as the Supplemental Nutrition Assistance Program (SNAP), serve as the first line of defense against hunger.
However, not everyone who is food insecure qualifies for these federal programs. As of 2018, one in three (32%) food-insecure individuals who reported income lived in households unlikely to qualify for most federal food assistance. These findings underscore the importance of protecting and strengthening the existing safety net of public food assistance while also investing in the charitable programs that help to fill the gap for people who are not eligible. To join Feeding America’s Campaign to End Hunger, visit feedingamerica.org/act.
Nearly 30 Million Americans Reported Not Having Enough Food Last Week
Nearly 30 million people in the United States reported they did not have enough to eat last week in a new peak since May, according to the U.S. Census Bureau’s weekly Household Pulse Survey data.
The survey data shows that about 23.9 million of 249 million respondents indicated they had “sometimes not enough to eat” for the week ending July 21 and 5.42 million more indicated they had “often not enough to eat.”
In total, about 12 percent of respondents reported not having enough food.
This week marked the highest number of respondents who reported insufficient access to food since the census began the Household Pulse Survey 12 weeks ago in May.
The new survey data comes as the pandemic continues to take an economic toll on Americans.
At the end of this week the additional $600 in unemployment benefits and the federal eviction moratorium granted in the CARES Act expire.
Lawmakers have talked about extending the moratorium and the unemployment benefits, but have not been able to reach a deal. Senate Republicans are pushing to lower the weekly benefit.
The same survey found that about 51 percent of respondents are experiencing a form of unemployment and over 26 percent are experiencing housing insecurity.
This week unemployment claims rose for a second straight week as an addition 1.4 million people filed for benefits.
Updated: Abu Dhabi Turns To Poultry, Fish Farms For Food Security
The oil-rich desert emirate of Abu Dhabi is investing 524 million dirhams ($143 million) to boost local production of produce, fish, cattle and poultry in its push to improve food security.
Much of the money will go toward using new technologies to improve large-scale production of food in climate-controlled conditions, the Abu Dhabi Government Media Office said Tuesday in a tweet.
Abu Dhabi — like the rest of the United Arab Emirates — must import most of its food. The coronavirus pandemic, however, has laid bare the UAE’s vulnerability to disruptions in foreign food supplies.
The biggest single investment is 150 million dirhams for Emirates National Poultry Farms, according to the tweet. The other outlays are for projects by Mirak Agricultural, Aqua Fisheries, Alfafa Co. and Al Nahdha Farm. Abu Dhabi Investment Office is making the investments in cooperation with the Abu Dhabi Agricultural & Food Safety Authority.
Join the conversation about Map the Meal Gap 2020 on Twitter using #MealGap.
About Feeding America
Feeding America® is the largest hunger-relief organization in the United States. Through a network of 200 food banks and 60,000 food pantries and meal programs, we provide meals to more than 40 million people each year. Feeding America also supports programs that prevent food waste and improve food security among the people we serve; educates the public about the problem of hunger; and advocates for legislation that protects people from going hungry. Visit www.feedingamerica.org, find us on Facebook or follow us on Twitter.
Zuani Villarreal, Feeding America
More Americans Add Retirement Insecurity To Their Food Insecurity
A Boston College study shows the pandemic worsens an already grim trend.
How much has the pandemic hurt Americans’ retirement security?
Not as much as you might think.
After improving slightly in 2019, the outlook for financial security in retirement for workers ages 30 to 59 deteriorated in 2020, according to a study released Tuesday by Boston College’s Center for Retirement Research.
According to the study, 51% of U.S. households are now at risk of being unable to maintain their standard of living in retirement. That is up from 49% in 2019.
Considering the scale of the 2020 pandemic shock to the global economy, the deterioration was relatively modest. Rising home and stock prices counteracted some of the impact of sharply higher unemployment, said Alicia Munnell, an economist at Boston College and the center’s director.
In 2007, only 40% of U.S. households were considered at risk of falling short in retirement, down a tick from 41% in 2004, when Boston College began publishing the calculation. The percentage has hovered around 50% for the past decade, reflecting the effects of the financial crisis.
Reasons for the long-term increase in households at risk include a rise in the age at which people can claim full Social Security benefits, to 67 for people born in 1960 or later. Other reasons include longer life expectancies and the long-term decline in interest rates, which has reduced the amount of income retirees can earn on their savings. The results don’t measure the amount by which households at risk are likely to fall short.
The center derives its estimate of the percentage of households at risk of falling short in retirement by using data on wealth and income from the Federal Reserve’s Survey of Consumer Finances, which is conducted every three years.
The researchers project household wealth in retirement. They typically deem those on track to replace less than 65% to 75% of their preretirement income—the exact percentage varies by household—at risk of being unable to maintain their living standard. The researchers assume people work until age 65, when they claim Social Security and start tapping their retirement accounts and home equity.
The center projected 2020 results by estimating the number of workers affected by job loss and projecting the impact on their future earnings and savings. The projections also included the impact of rising home and stock prices on wealth.
Hunger Hits Highest In Years As Global Recession Hits Income
The world faced its worst hunger problem in at least five years in 2020 on the back of the coronavirus crisis, and the outlook remains grim again this year.
Some 155 million people across 55 countries — more than the population of Russia — suffered from issues ranging from a food crisis to famine, according to a report with data from more than a dozen agencies. That’s up 20 million from 2019, with economic shocks overtaking extreme weather as the No. 2 cause.
The worsening situation highlights how the pandemic has exacerbated food inequalities around the world, on top of extreme weather and political conflicts that are stifling access to key staples. Consumers are now also contending with rising food costs as rampant Chinese demand stretches global crop supplies.
“Covid-19 has been exacerbating fragilities,” said Dominique Burgeon, director of emergencies and resilience at the United Nations’ Food and Agriculture Organization. “Its restrictions, for example, on the movement of goods and people, has resulted in widespread income losses, especially for those people who rely on informal work in urban households.”
Conflict and insecurity remain the largest causes of hunger, responsible for almost two-thirds of those facing food crises, according to the report created with help from agencies including the European Commission and United Nations World Food Programme. The Democratic Republic of Congo, Yemen and Afghanistan are some of the most-affected nations.
The number of people facing hunger primarily from economic shocks, including those related to the pandemic that cut jobs and incomes, jumped nearly 70% last year to 40.5 million. That shows the toll Covid-19 has taken on food insecurity, and more economic pain is expected in 2021, David Beasley, the WFP’s executive director, said Wednesday in a webinar.
Supply chain disruptions also caused spikes in food prices, while higher inflation or weaker currencies in import-dependent nations made food less affordable, according to the report. Women have been particularly hard hit, as they’ve been more vulnerable to losing jobs.
Global hunger is expected to hold above pre-pandemic levels this year, affecting more than 142 million across 40 countries, the report showed. Conflicts remain a problem and economic hardship could intensify due to the coronavirus crisis, the agencies said.
Last year, about 28 million people were in an “emergency” state of food insecurity, or worse.
“We are extremely concerned,” Burgeon said. “When we look at the early data we have from 2021, we see that this number has already increased.”
Hunger Stalks Millions As Abiy Asks Ethiopians To Join Army
* Fighting Has Spread Beyond Tigray Region Into Two Other States
* Additional 300,000 People Need Aid, World Food Programme Says
Fighting in northern Ethiopia may intensify further after the nation’s Nobel-laureate leader urged citizens to join the army and militias, which may add to the misery caused by nine months of civil war between the federal government and dissidents in the Tigray region.
About 300,000 people are facing “emergency levels of hunger” in Ethiopia’s Amhara and Afar states, where Tigrayan forces began an offensive after regaining most of their territory from government troops in June, the World Food Programme said on Monday. That’s in addition to about 5.2 million people in Tigray who’ve been impacted by the conflict and desperately need food aid.
“The agricultural planting season has been missed in many parts of Tigray and estimates show only 25% to 50% of the normal cereal production will be available this year,” the United Nations agency said in a statement.
Conflict in Ethiopia erupted in November after Prime Minister Abiy Ahmed accused forces loyal to the Tigray People’s Liberation Front, which dominated national politics for 27 years prior to being sidelined in 2018, of attacking a federal military base. The violence has scarred the nation’s reputation as one of Africa’s top investment destination and sent its eurobonds plummeting.
There have been reports of intense fighting, including the use of heavy artillery, in four districts along the border between Amhara and Tigray since the start of the month, internal UN documents seen by Bloomberg show.
A major offensive is underway in northern Amhara to “reverse the existential threat” from Tigray, Sema Tiruneh, head of the Amhara region’s Peace and Public Security Bureau, told state media on the weekend.
Meanwhile more than 200 people, about half of them children, were reportedly killed in an attack on a health facility and school in Afaron Aug. 5 — an incident the government and Tigrayan officials have blamed on each other.
Abiy, who won the 2019 Nobel Peace Prize for ending a long-running conflict with neighboring Eritrea, on Tuesday called for a national response to repel the Tigrayans. “Now is the right time for all capable Ethiopians who are of age to join the defense forces, special forces and militias and show your patriotism,” his office said in a statement.
Violence has also flared in other parts of Ethiopia and its neighbors have been drawn into the fray. Inter-communal fighting between ethnic Afaris and ethnic Somalis in eastern Afar has spilled over the border into Djibouti in recent days, the UN documents show. Ethiopian and Sudanese forces have previously clashed over a contested strip of border land known as al-Fashaga in Amhara.
Calls by the U.S. for Tigray to stop it’s advance after the federal government unilaterally declared a cease-fire in June have been rebuffed by the dissidents.
“Tigray is fighting to defend itself, to remove the rope from around its neck,” Debretsion Gebremichael, the region’s leader, said in an interview broadcast on YouTube on Sunday. “Tigray has been strangled and now it is trying to tear apart the rope.”
Biden Administration Approves Largest Increase To Food Assistance Benefits In SNAP Program History
The Biden administration has approved the largest increase to food assistance benefits in the history of the Supplemental Nutrition Assistance Program (SNAP), in a move that will substantially retool the program to provide the targeted assistance advocates have long said is desperately needed by poor families.
First reported by the New York Times and confirmed by a spokeswoman at the USDA, average monthly benefits, which were $121 per person before the pandemic, will rise by $36 under the new rules.
Many anti-hunger advocates have long believed the Thrifty Food Plan’s metrics are out of date with the economic realities most struggling households face. They say the plan, formulated in the 1960s, was designed when many American families still had only one working parent, giving the other parent more time for labor-intensive, but cheaper, cooking from scratch.
In the past two decades, more working families are made up of two wage earners or a single-parent, leaving less time for soaking beans and simmering stews. The Biden administration has asked the USDA to revise the Thrifty Food Plan to better reflect the modern cost of a healthy basic diet.
During the Trump administration, coronavirus relief bills did not expand SNAP for the 40 percent of recipients already receiving the maximum benefit. In January, Biden signed an executive order allowing states to increase SNAP emergency allotments, allowing an additional 12 million people to receive enhanced benefits.
As the pandemic triggered, high unemployment and shortages in food banks and pantries around the country, Vilsack was charged with reimagining food assistance programs, which account for over two-thirds of USDA’s budget. SNAP, WIC (a program for pregnant women, infants and young children), Pandemic-EBT, (a program meant to replace free or subsidized meals for kids now learning online) and school meal programs have all seen temporary expansions, many of which are poised to expire in September.
The changes to SNAP are permanent, aimed at addressing pandemic-related surge in hunger in America, when projections predicted 50 million people, including 17 million children, would be considered food insecure by the end of 2020. But, advocates say, the infusion of funding corrects benefits that fall far short of demonstrated need, a problem they say has existed for at least a decade.
Hey, Elon: We Made A $6 Billion Plan To End World Hunger
Surging demand for emergency food aid highlights the need to invest heavily in a paradigm shift toward sustainable agriculture.
When United Nations World Food Program director David Beasley recently called for billionaires to help solve world hunger, Elon Musk took the bait — vowing to sell $6 billion in Tesla stock if Beasley could tweet “exactly how” the money would feed humanity. Predictably, the media and Twitterverse erupted, mostly in protest.
Beasley’s provocation was not only defensible, it was necessary, as are big investments from Musk and other private-sector leaders. Forty-two million people are on the brink of famine. Musk could buy each of them a 43-cent meal per person per day, which over 365 days amounts to a cost of $6.6 billion. That intervention would hardly solve world hunger, but near term it would save many lives.
What was lost in the ensuing social media fracas was the idea that investments in food security must extend well beyond emergency aid.
In his recent comments at COP26, Beasley stressed the impact of climate change. Heat and drought, along with flooding, superstorms, invasive insects, shifting seasons and bacterial blights are bearing down on farmers, who have also shouldered the stresses of the Covid-19 pandemic.
All told, the number of undernourished people worldwide rose from 650 million people in 2020 to 810 million people today, WFP’s chief economist, Arif Hussain, told me — a surge of 150 million in a year.
I’ve embedded with World Food Program personnel as they staved off famine in Ethiopia and understand why this organization was awarded the Nobel Peace Prize last year: It helps populations survive food-system collapse.
To keep saving lives, the World Food Program must invest not just in food rations, but in more sophisticated supply-chain management, storage facilities, road and bridge-building for more efficient aid distribution, and, crucially, satellite monitoring and in-field communications technology to track levels of risk.
If Elon Musk doesn’t want to plow $6 billion into emergency aid, perhaps he’ll cash out his Tesla stock to invest in climate-smart innovations that hold tremendous longer-term promise for food security — including AI and robotics technologies that can slash the use of agrochemicals, indoor cropping systems, advances in sustainable fish farming, cellular agriculture, plant-based meats, anerobic digesters, supplements that can ratchet down methane emissions from livestock, nanotech solutions that can boost crop yields and draw down carbon.
Investors also need to back natural climate solutions, including silvopasture and regenerative farming practices that can improve farmland’s capacity for storing carbon. They should also fund growing private-sector markets paying farmers to sequester carbon.
In a conversation at COP26 in Glasgow, U.S. Secretary of Agriculture Tom Vilsack told me we’re entering a golden era of investment — “an extraordinary range of game-changing technologies is coming into play.” Vilsack’s USDA is planning to invest hundreds of millions in climate-smart agriculture. Figures like Musk who’ve led the way in energy and transportation investments don’t yet fully appreciate its potential.
Musk should especially consider funding two areas that are as crucial to smallholder farmers as to large-scale agribusiness: smart seeds and a drought-proof water supply. Advanced breeding and gene-editing tools like CRISPR can cut the time needed to develop new climate-resilient crop varietals to less than a year, whereas traditional breeding methods can take eight times that long.
Guatemalan farmers are developing, for example, climate-resilient coffee crops; agronomists in Florida are breeding citrus trees that can endure blights; Californian farmers are scrambling to develop wine grapes and tomato plants that can tolerate heat shock.
Musk should also consider investments in “blue tech” — water innovations that include recycled wastewater, desalination plants, hyper-efficient irrigation technologies and systems in rural and drought-afflicted regions that include water ponds and solar-panel shields over canals that preserve scarce resources. These innovations along with smart seeds can help smallholder farmers survive drought — and obviate the need for food handouts.
There are good reasons for skepticism around emergency aid: If you give people fish, the adage goes, they will eat for a day. Yet it’s no longer true that if you teach people to fish, they will eat for a lifetime.
In a warming world — especially in Afghanistan, Ethiopia, Madagascar, Sudan, Yemen and other countries facing famine — there are simply fewer fish to eat along with shrinking habitats. For the foreseeable future, indisputably, we will need emergency measures.
The International Panel on Climate Change has predicted that by mid-century “the world will reach a threshold of global warming beyond which current agricultural practices can no longer support large human civilizations.” The operative phrase here is current agricultural practices. In the coming decades, what we eat and how we grow it will change radically, and we need everyone onboard — the UN and Elon Musk alike — to fund the shift to sustainability.
The Tesla And SpaceX CEO Challenged The Head Of The UN World Food Program In A Twitter Exchange
Elon Musk hit back at a suggestion that he and other billionaires should “step up now” to help solve world hunger, pointing the finger instead at a prominent global food program.
Musk lashed out after David Beasley, director of the United Nations World Food Program, told CNN that just a sliver of Musk’s and other billionaires’ wealth could help solve world hunger. “$6 billion to help 42 million people that are literally going to die if we don’t reach them. It’s not complicated,” Beasley told CNN.
Musk responded on Twitter: “If WFP can describe on this Twitter thread exactly how $6B will solve world hunger, I will sell Tesla stock right now and do it.”
If WFP can describe on this Twitter thread exactly how $6B will solve world hunger, I will sell Tesla stock right now and do it.
— Elon Musk (@elonmusk) October 31, 2021
Musk added, “Please publish your current & proposed spending in detail so people can see exactly where money goes. Sunlight is a wonderful thing.”
Beasley later clarified that he didn’t say $6 billion would solve world hunger altogether — “but it WILL prevent geopolitical instability, mass migration and save 42 million people on the brink of starvation.”
Though Musk seemed to be calling for more transparency around the UN World Food Program, which was awarded the Nobel Peace Prize in 2020, he and his companies aren’t known for being particularly communicative. Tesla shut its press office in 2020, and Musk’s charitable foundation interfaces with the public through a barely-there website.
Beasley pointed out in his CNN interview that while billionaires like Musk have seen their fortunes swell to new heights during the pandemic, daily life has worsened for the world’s poorest people. Musk’s personal net worth is currently around $289 billion. It jumped by $36 billion in a single day last week following Hertz’s, announcement that it would buy 100,000 Tesla vehicles.
Meanwhile, an estimated 155 million people were pushed into acute food insecurity in 2020, meaning that a person’s inability to consume enough food puts their life or livelihood in danger, according to UNWFP.
The number of people facing acute food insecurity hit a five-year high in 2020, and the global hunger crisis is growing more dire as climate change eats away at humans’ ability to grow and catch their own food, UNWFP noted in a separate report.
Musk signed the Giving Pledge, a public promise to give away at least half his wealth in his lifetime or when he dies, in 2012. Compared to some of his wealthy peers, he has been relatively quiet about his philanthropy until this year.
Musk announced a $100 million prize aimed at helping to solve climate change, and he has made several other donations in 2021, including a $1 million contribution to a Texas food bank, Vox reported.
Musk sometimes announces his philanthropic activities on Twitter, including a September message about a $50 million donation for children’s cancer research.
Ben Soskis, an expert on the history of philanthropy and a research associate in the Center on Nonprofits and Philanthropy at the Urban Institute, said Musk has distinguished himself from his ultra-wealthy counterparts in at least two ways.
“After insisting on right to give privately, Musk is developing a public philanthropic persona unlike any we’ve seen from a mega-donor: it lacks coherent framing principle (other than interplanetary ambition) & seems focused as much on trolling as winning praise, defining mission,” Soskis tweeted.
Wealth Rises In Canada’s Recovery, But So Does Food Bank Usage
Food insecurity is rising in Canada, a country that has long-prided itself on its social safety net — including a roughly C$300 billion pandemic relief package meant to leave no one behind.
The number of people turning to food banks rose 10% in the province of Ontario during the first year of the Covid-19 pandemic.
That’s aligned with figures that show food bank usage across the country was significantly higher this past March than in 2019.
At first glance, the numbers are hard to reconcile with data showing that Canadians became much wealthier during the pandemic. But the rise in household net worth was largely due to a boom in housing and stocks, leaving behind those with lower incomes and few financial assets. In Ontario, only about 6% of food bank users are homeowners.
The cost of food and housing are two of the top three reasons why people access a food bank, according to a survey by Food Banks Canada. With a recent surge in inflation affecting food and fuel, the situation may get worse in 2022.
“A volatile combination of high rental housing costs, rapid food inflation, and pandemic-related unemployment created a ‘perfect storm’ that drove up the number of visits to food banks in the last year, especially in larger urban areas,” Richard Matern, research director with Food Banks Canada, said in an emailed statement.
The households of greatest concern, particularly in urban areas, are those that face higher rental and food costs combined with static income, such as social assistance.
“It is more about income than it is food prices,” said Valerie Tarasuk, a professor in the University of Toronto’s nutritional sciences department. “The thing that is most predictive of someone’s food insecurity status is their income, it’s not their rent cost.”
Those on the front lines of hunger relief in Canada say vulnerabilities that have been building for years may be about to get worse as government emergency income programs for Covid-19 end. Matern said his organization expects a “tidal wave” of new clients in the months ahead.
Ontario, the most populous province with nearly 15 million people, is a case in point. Food bank use has been on the rise since 2017, stoked in part by rising shelter costs for some of the province’s most vulnerable residents.
The pandemic increased the pressure. Between April 1, 2020 and March 31, 2021, the province’s food banks saw the biggest surge in visits since 2009, according to data from Feed Ontario, an organization of 1,200 hunger-relief organizations.
“This has to do with a constellation of several issues,” said Siu Mee Cheng, Feed Ontario’s interim executive director. “People are willing to give up food in order to pay for a roof over their heads and make sure that electricity and water is running.”
Frayed Safety Net
There’s no doubt pandemic aid programs were beneficial, said Cheng. One of the biggest, the C$2,000-per-month Canada Emergency Response Benefit, offered many struggling workers more generous assistance than they received under traditional employment insurance.
Most of the surge in food bank use during the pandemic was in segments of the population that were supposed to be protected by other social programs, like disability or old age payments, which have not kept up with inflation, Cheng said. The proportion of Ontario senior citizens using food banks is still lower than the general population — roughly 8% — but that group saw a 36% spike in the 12-months ended March 31.
That period doesn’t include the recent stretch of higher food prices. In British Columbia, retail ground beef prices were 8% higher in October than they were six months earlier; in Quebec, pork loin was up 19%. “Significant increases in inflation really began in the last few months,” Cheng said. “We do anticipate in the food bank sector that usage will only continue to increase in next year’s report.”
Still, the University of Toronto’s Tarasuk said it’s too early to conclude food insecurity is spiraling. “I’m wary of claims that it has increased substantially because we don’t have data to suggest that right now,” she said.
What’s indisputable is that food inflation has been running ahead of general inflation in Canada for the last 20 years, according to a new food price report from four universities. Between 2015 and 2019, average food expenditures rose 16.3% while median incomes grew 6.6%.
Supply chain problems, drought and wildfires added still more pressure in Canada in 2021, says the report, led Dalhousie University’s Sylvain Charlebois, which forecasts a 5% to 7% overall increase in food prices next year.
“This means that Canadians are having to allocate a higher proportion of their income for food, a trend that has only been exacerbated by Covid-19,” the report states. “Real concerns around food insecurity persisted in 2021 as wages and salaries for most have not kept pace with the increase in prices.”
Hunger Rife In Ethiopia’s Tigray Region, World Food Program Says
* Almost 40% Of Tigrayans Confronting Extreme Food Shortages
* Multiple Mediation Efforts Under Way To End 14-Month Civil War
Almost 40% of the 6 million people living in Ethiopia’s northern Tigray region, the epicenter of a protracted civil war, are facing extreme food shortages, a new assessment by the World Food Programme has found.
About 83% of the population are food insecure and not a single aid convoy has reached the region since mid-December, the United Nations agency said in a report released on Friday. Fighting between federal forces and troops loyal to the Tigray People’s Liberation Front, which was the country’s preeminent power broker for almost three decades, has dragged on for 14 months despite multiple mediation efforts to end it.
“Families are exhausting all means to feed themselves, with three-quarters of the population using extreme coping strategies to survive,” the WFP said. It also found the number of people going hungry in Amhara, which borders on Tigray and has also seen heavy fighting, more than doubled in the past five months and over 14% of children there under the age of five are malnourished.
The release of the assessment, which was carried out over the past two months, came amid reports of fresh fighting in Afar, another northern region.
The government blamed rebel Tigrayans for staging renewed attacks and disrupting aid deliveries. “This indicates that the terrorist group is still trying to use hunger as a political tool,” the Ministry of Foreign Affairs said in a statement on Friday.
Getachew Reda, a TPLF spokesman, couldn’t immediately be reached for comment. He said earlier this week on Twitter that renewed fighting was started by regional forces from Afar and Eritrea and called for “desperately needed humanitarian aid” to enter Tigray.
Yemane Gebremeskel, Eritrea’s information minister, didn’t respond to questions about his country’s alleged involvement in the Afar conflict.
Thousands of people have died in the war and millions more have been displaced. Most healthcare facilities in Tigray ran out of key supplies months ago, with health-care workers lacking antibiotics and other drugs, proper clothing and cleaning materials, according to aid workers.
While federal forces have regained territory lost in early November, they have so far refrained from moving into Tigray, but used drone attacks that have killed large numbers of civilians. The TPLF leadership says it has made a strategic retreat into Tigray and is willing to enter into peace talks.
The European Union is backing so-far unsuccessful efforts by the African Union’s envoy, former Nigerian President Olusegun Obasanjo, to bring the sides back to the negotiating table. Kenyan President Uhuru Kenyatta and Workneh Gebeyehu, the executive secretary of the Intergovernmental Authority of Development, have also been trying to broker a ceasefire.
The multiple mediation efforts are problematic because they aren’t being coordinated and there is a danger that the warring sides could resort to “forum shopping,” said Cameron Hudson, senior fellow at the Atlantic Council’s Africa Center.
“I do worry that at some point we might need a mediator for the mediators,” he said.
Surging Fertilizer Prices Set To Exacerbate African Food Crisis
* Use of nutrients may shrink by a third in sub-Saharan Africa
* Import-dependent region may face increasing food shortages
A surge in global fertilizer prices is adding to worries about food security across sub-Saharan Africa, where small-scale farmers depend largely on imports — if they even use additional nutrients at all.
With prices tripling over the past 18 months, many farmers are considering whether to forgo purchases of fertilizers this year. That leaves a market long touted for its growth potential set to shrink by almost a third, according to Sebastian Nduva, program manager at researcher group AfricaFertilizer.Org. That could potentially curb cereals output by 30 million tons, enough to feed 100 million people, he said.
“We are likely to see a scenario where yields are depressed and this will mean that either the government will have to readjust their budgets and import food, or there will be food shortages,” Nduva said.
Sub-Saharan Africa already has the world’s lowest fertilizer application rates, averaging 12 kilograms per hectare compared with a global average of 110 kilograms. With usage set to fall as input costs rise, the threat to regional food security and political stability is growing, according to Alain Sy Traoré, director of agriculture and rural development at the ECOWAS Commission.
That will increase the region’s dependence on imports at a time when food prices are near a record high. More than 20 million people across sub-Saharan Africa are already on the brink of famine, according to the World Food Programme.
Soaring gas prices helped drive fertilizers higher last year, squeezing supply as increasing costs shuttered plants while producers introduced export restrictions.
While fertilizer prices in the U.S. have eased, prices in Europe and the Middle East, the top suppliers to Africa, are yet to find any relief — a gauge of western European prices for ammonia remains at a record. Tensions over Ukraine have also been pushing up natural gas prices this month and any escalation could drive fertilizer prices even higher.
The high costs have curbed output at some of the more than 100 fertilizer blending plants in sub-Saharan Africa, which largely depend on imports of the nutrient, Nduva said. Stockpiles of the nutrients are now dwindling after governments and traders delayed procurements in the hope that prices would fall.
Small scale farmers, who account for more than 70% of fertilizer consumption in the region, are hardest hit. Most lack access to finance that could help them withstand the spiking prices.
“Corn, rice, sorghum and millet growers are most vulnerable because they do not have such buffers and will be forced do without any nutrients when planting,” said Patrice Annequin, senior fertilizer market specialist at IFDC, which promotes affordable nutrient technologies.
Yao Nabotena, a cotton farmer in Kokaha village in Ivory Coast, used just 33 bags of fertilizer this season, half the amount required on his seven-hectare plantation.
Some sectors are in a stronger position to weather the market turmoil. Gains in cocoa and cotton will cushion some farmers in West Africa from the higher input costs, said Annequin.
African nations have also begun or are expanding production of fertilizer as part of plans to reduce reliance on imports from Europe and North America, which are sometimes unsuitable for the region’s soils. Investors from Morocco’s OCP Group to Africa’s richest person Aliko Dangote and Fertiplant East Africa are investing in operations to produce or improve delivery of fertilizer in countries including Nigeria, Ethiopia and Kenya.
Fertilizer demand in the region should bounce back in 2023 as prices come down. Still, even before the current squeeze, sub-Saharan Africa had barely reached half its consumption potential, according to AfricaFertilizer.Org. Higher application rates and better use of arable land could transform the market.
“Meeting any of these parameters could double the region’s fertilizer consumption,” Nduva said.
China Plans To Feed 80 Million People With ‘Seawater Rice’
Chinese scientists have developed salt-tolerant strains of rice in a bid to ensure food security as sea levels rise from climate change.
The secret to the bountiful harvest is new salt-tolerant rice strains developed by Chinese scientists in the hope of ensuring food security that’s been threatened by rising sea levels, increasing grain demand and supply chain disruptions.
Known as “seawater rice” because it’s grown in salty soil near the sea, the strains were created by over-expressing a gene from selected wild rice that’s more resistant to saline and alkali. Test fields in Tianjin—the municipality that encompasses Jinghai—recorded a yield of 4.6 metric tons per acre last year, higher than the national average for production of standard rice varieties.
The breakthrough comes as China searches for ways to secure domestic food and energy supplies as global warming and geopolitical tensions make imports less reliable. The nation has one-fifth of the world’s population, and that many mouths to feed, with less than 10% of the Earth’s arable land. Meanwhile, grain consumption is rising quickly as the country grows more wealthy.
“Seeds are the ‘chips’ of agriculture,” said Wan Jili, a manager at Qingdao Saline-Alkali Tolerant Rice Research and Development Center, drawing a parallel between the crucial role semiconductors play in the development of new technologies and their role in the ongoing trade war between the U.S. and China. Seawater rice could help improve China’s grain production in the face of an “extremely complicated situation regarding climate change and global food security,” she said.
China has been studying salt-tolerant rice since at least the 1950s. But the term “seawater rice” only started to gain mainstream attention in recent years after the late Yuan Longping, once the nation’s top agricultural scientist, began researching the idea in 2012.
Yuan, known as the “father of hybrid rice,” is considered a national hero for boosting grain harvests and saving millions from hunger thanks to his work on high-yielding hybrid rice varieties in the 1970s. In 2016, he selected six locations across the country with different soil conditions that were turned into testing fields for salt-tolerant rice.
The following year, China established the research center in Qingdao where Wan works. The institute’s goal is to harvest 30 million tons of rice using 6.7 million hectares of barren land.
“We could feed 80 million more people” with salt-tolerant rice, Yuan said in a documentary broadcast in 2020. “Agricultural researchers like us should shoulder the responsibility to safeguard food security,” he told a local newspaper in 2018.
Climate change has made the task more urgent. China’s coastal waters have risen faster than the global average over the last 40 years, a worrying trend given the country’s deep reliance on its long and low eastern coast for grain production. Successfully growing salt-tolerant rice on a large scale would allow the country to utilize more of the increasingly salty land in the area.
According to the Intergovernmental Panel on Climate Change, sea levels around the world could rise as much as 59 centimeters by the end of the century if the planet warms by 2 degrees Celsius. Oceans surrounding the U.S. will swell faster within the next three decades than they did in the past century, according to a report this week led by the National Oceanic and Atmospheric Administration.
President Xi Jinping has stressed in several recent meetings with top government officials that ensuring the supply of primary goods is a “major strategic issue” given climate and geopolitical pressures. “The food of the Chinese people must be made by and remain in the hands of the Chinese,” he said at a gathering of the Politburo Standing Committee meeting in December.
Chinese scientists are betting that land once dismissed as barren can be turned into productive grain-producing plots. About 100 million hectares of land in the country, about the size of Egypt, is high in saline and alkaline. Meanwhile arable land has decreased 6% from 2009 to 2019 because of urbanization, pollution and overuse of fertilizers.
To make use of salty soil, farmers traditionally dilute their fields with large amounts of fresh water. The approach is still commonly used in some coastal regions. But the method requires vast amounts of water and often doesn’t improve yields enough to make sense economically.
“China is looking at another method now, to develop grain varieties that can withstand the soil’s saltiness,” said Zhang Zhaoxin, a researcher with China’s agricultural ministry. While seawater rice has mostly been planted on trial fields so far, Zhang said he believes commercial cultivation will soon take off with the government’s support.
The research team in Qingdao said last October that it can meet the goal of growing 6.7 million hectares of seawater rice within ten years. In 2021, the group was put in charge of 400,000 hectares of land to expand production of seawater rice.
“If China can be more self-sufficient in staple foods, it would be a contribution to the world’s food security too,” said Zhang. “The less China imports, the more other countries will have.”
Russia-Ukraine War Adds Pressure To Already High Food Prices, Threatening Food Security For Millions
Both countries are top grain exporters and supply disruption is only part of the war’s impact on food.
Russia’s invasion of Ukraine threatens a significant portion of the world’s food supply when prices were already at their highest level in years.
The two countries are among the globe’s top grain exporters, according to the Harvard Growth Lab’s Atlas of Economic Complexity, making up a combined 26% and 20% of global wheat and barley exports in 2019, respectively.
The conflict has sent wheat futures prices soaring and is putting pressure on a still-recovering global supply chain, setting the stage for an increase in already inflated consumer prices.
The potential pain from a loss of agricultural exports, however, is likely to be felt disproportionately world-wide. Countries in the Middle East and North Africa rely on the nearby Black Sea as a trading route and source of imports from Russia and Ukraine.
The war has hamstrung shipping there, stranding ships and sailors across the globe and putting countries such as Egypt, the world’s largest importer of wheat, at risk of losing a critical food source. Egypt gets about 70% of its total wheat imports from Russia and Ukraine.
Historical ties and geographic proximity mean that former Soviet Union countries, such as Armenia, Belarus and Kazakhstan, tend to import a lot of their wheat products from the region.
The 2019 trade data compiled and analyzed by the Harvard Growth lab, which is based on countries’ reporting to the United Nations and represents the latest complete trade data available, covers an estimated 95% of global goods trade.
Country-specific dynamics will affect how they are able to handle the loss of a critical source of wheat imports, according to David Laborde, a senior research fellow with the International Food Policy Research Institute.
Egypt’s relatively diversified food basket and its strategic wheat reserves can help it cope in the near term, he said, while a more economically vulnerable country such as Yemen is likely to struggle making up the imports gap.
Surging fuel prices can also give oil-exporting countries such as Iraq more flexibility to pay for wheat—even at higher costs.
Global food prices were rising before Russia’s invasion of Ukraine. The conflict sent shock waves through a system already challenged by disruptions in production and supply chains that were caused by the pandemic, among other factors.
“Normally our food systems are very resilient, and certainly more resilient today than they were 40 years ago,” Mr. Laborde said. “It’s really when we have a succession of problems that we start to suffer.”
Ukraine and Russia’s agricultural exports face different challenges. Ukraine has endured weeks of heavy shelling, with some residential areas and civilian infrastructure taking heavy damage.
Most wheat, barley, and sunflower exports are complete by February, according to the food policy and research institute, but Ukrainian maize exports typically remain heavy through the spring into the early summer.
Crops grown in the 2022 season are at risk, with barley planting starting in March and maize in April. Winter wheat isn’t typically planted until late summer.
Russia, on the other hand, has been the subject of harsh economic sanctions from the international community, and hundreds of businesses have said they are pausing or ending operations there.
German agricultural giant Bayer AG said Monday it had stopped all spending in Russia and Belarus that wasn’t directly related to supplying products essential for civilians such as health and agriculture products; it warned that it could withhold seeds for crops in Russia next year if the war in Ukraine continues.
The company said it had already provided “essential agricultural inputs” to Russian farmers for this year’s planting “to alleviate additional pressure on the global food system” and would be making a decision about 2023 at a later date.
Bayer added that it hoped Ukrainian farmers would be able to secure the 2022 harvest “as the window for planting is closing in only a few weeks.”
Even if Russia can pull off this year’s harvest, the sanctions make it nearly impossible for many Western companies to do business there. It remains to be seen, however, whether the countries most reliant on Russia’s agricultural products will continue to import as usual or seek goods from elsewhere.
The conflict also has secondary effects on prices people pay for food, such as higher transportation costs because of fuel-price inflation. Even before the invasion, farmers were struggling to handle higher fertilizer costs. Russia, a major supplier of fertilizer to the world, recently cut exports to guarantee supplies for farmers at home.
Aside from supply, the war and the humanitarian crisis also pose a threat to regional food security. Food and basic supplies are running low in besieged Ukrainian cities. More than three million people have fled Ukraine since Feb. 24, according to the U.N. High Commissioner for Refugees, as of mid-March. About half the refugees are children.
All That’s Stopping A Full-Blown Food Crisis? Rice
Prices of the staple diet of half the world’s population remain subdued, thankfully.
Crises are often years in the making. But there’s typically one event that stands out as the flashpoint when the panic really began. For the global financial crisis, it was the collapse of Lehman Brothers.
For the 2007-08 food crisis, the trigger was Vietnam imposing an export ban on rice. Importers panicked and, in a matter of days, rice prices doubled. Food riots soon followed from Dakar to Bangladesh.
The world is once again facing a critical juncture in food prices. Russia’s invasion of Ukraine has upended one of the world’s most important breadbaskets, pushing the cost of wheat to an all-time high.
Vegetable oil and corn prices are also surging. Food-importing nations are understandably worried. Thankfully, there’s enough rice this time around for prices to remain subdued.
Rice matters because it’s the staple diet for half the world’s population, including about a billion undernourished people living in Asia and West Africa. The worst food riots during the 2007-08 crisis weren’t about the price of bread, but the cost of a bowl of rice. Right now, rice is all that’s standing between us and a full-blown food crisis.
The world can’t avoid a huge bout of food inflation, which will be extremely painful for food-importing nations such as Egypt, Turkey and Indonesia. Hunger will increase. Even developed countries will see sharp rises in supermarket prices. According to the United Nations Food and Agriculture Organisation, food prices have already jumped to a nominal all-time high.
Even in real terms, adjusted for inflation, the FAO food index is just a whisker below the all-time high set in 1974. In the past year, wheat prices in Europe have surged nearly 65% in dollar terms, corn is up almost 38% and palm oil has risen nearly 55%. Yet, benchmark rice prices are down almost 20% during the same period.
The steady depletion of the world’s rice stockpile put the world in a precarious situation more than a decade ago. Each year from 2000-01, the world consumed more rice than it produced, with bad weather hurting crop yields.
By 2006-07, stockpiles had fallen to the lowest in 20 years. Without a buffer, it was a question of when, rather than if, prices would shoot up.
The world is in a better place today because Asian governments learnt the lesson of the previous price spike and have spent the last decade and a half supporting domestic rice cultivation. Global production has outstripped demand each and every year since 2007, leading to a huge increase in the world’s stockpiles of the grain.
According to the U.S. Department of Agriculture, global rice inventories will rise in the 2021-22 crop season to a record 190.5 million metric tons, up by more than 150% from 75.4 million tons just before the previous crisis.
Rice is a thinly traded commodity – so small changes in exports and imports have an outsize impact on prices. While global rice production in the last crop season was 509.6 million tons, global trade totaled just 9.9% of that amount, or about 50.6 million tons. By contrast, more than 25% of world wheat output was traded last year.
When Vietnam, typically the world’s second-largest rice exporter, imposed its export ban in 2008, others including India, China and Cambodia quickly followed, effectively shutting down the entire market. Panic followed: In four months, the Philippines bought as much rice as it usually imports in a full calendar year.
Saudi rice imports shot up 90% as the kingdom built up its reserves. The result was the most dramatic price increase the rice market had ever seen, with prices soaring to about $1,100 per ton from about $480 in just eight weeks.
Rice currently changes hands at about $405 per ton, down from $410 before Russia invaded Ukraine almost a month ago. If the world is to avoid a full-blown food emergency, rice prices need to stay where they are.
Plentiful global stockpiles should help, but three factors can still send prices higher. The first is beyond anyone’s control: bad weather, particularly a poor Asian monsoon. For now, initial forecasts suggest the 2022 wet season in India could be normal.
Policymakers can shape the other two components — and it’s extremely important they do. They need to support Asian farmers as they face record high fertilizer and fuel prices. That means subsidies, which multilateral development banks can and should help with.
And, more importantly, they need to keep the market open. If major rice exporters, above all India and Vietnam, were to restrict rice exports this year, that could trigger a panic. New Delhi and Hanoi should avoid the temptation. There’s a lot at stake.
Biden Says To Expect ‘Real’ Food Shortages Due To Ukraine War
President Joe Biden said that the world will experience food shortages as a result of Russia’s invasion of Ukraine, and production increases were a subject of discussions at a Group of Seven meeting on Thursday.
“It’s going to be real,” Biden said at a news conference in Brussels. “The price of the sanctions is not just imposed upon Russia. It’s imposed upon an awful lot of countries as well, including European countries and our country as well.”
Ukraine and Russia are both major producers of wheat, in particular, and Kyiv’s government has already warned that the country’s planting and harvest have been severely disrupted by the war.
Biden said that at the G-7 summit in Brussels earlier that he and Canadian Prime Minister Justin Trudeau both discussed increasing their nation’s agricultural production to try to make up for shortfalls. Biden said he’s also urging all nations including those in Europe to drop trade restrictions that could restrict exports of food.
Food Hoards Can Ease Inflation, But Only Some Governments Are Prepared
Countries with large grain reserves, such as China, can shield their citizens from higher food prices caused by war in Ukraine.
Food stockpiles might look comfortable at the global level. In reality, only a handful of governments have provisions to cope with grain shortages caused by the war in Ukraine.
For important cereals such as wheat and corn, the world-wide stock-to-use ratio—a measure of inventories as a proportion of annual demand—will finish the year at 29%, according to forecasts by the Food and Agriculture Organization of the United Nations. This is lower than before the pandemic, although not worryingly so.
But the headline number is deceptive as a small number of countries control the biggest share. The U.S. Department of Agriculture estimates that China holds half of the world’s wheat reserves and 70% of its corn. After five consecutive record crops, India has almost one-tenth of global wheat stockpiles.
The U.S. has 6% and 12% of global wheat and corn reserves, respectively. Combined, countries in North Africa that are especially reliant on grain imports from the Black Sea region have a roughly 5% share of global wheat reserves.
With the largest grain inventories in the world, China is best prepared for a global crunch. Beijing has given priority to food security for its 1.4 billion-strong population for several years and began steadily building the country’s strategic reserves after the 2008 food price crisis.
China significantly ramped up imports at the beginning of the Covid-19 outbreak. In 2020, the country brought in 26% more grains and oilseeds than the year before, according to agricultural market data provider AgFlow. Import volumes rose a further 11% in 2021 and continued to show year-over-year growth in January and February of this year.
As Ukraine and Russia are major international grain exporters, tensions between the two countries began to push up the cost of commodities well before Russian troops first crossed the Ukrainian border on Feb. 24.
Since December last year, cash prices for Argentine wheat and corn—a likely substitute for Ukrainian crops for a number of importing nations, especially in Africa—are up 27% and 38% respectively, according to AgFlow.
Countries with plentiful reserves can avoid paying these elevated prices by dipping into their existing grain silos. This could help to shield citizens from food price inflation. Egypt, which was the breadbasket of the Roman empire but now imports around 70% of its wheat needs from Russia and Ukraine, has reserves to keep its subsidized food program going for around 4½ months.
Other countries such as Benin and Somalia have few reserves at all. China’s stockpile is formidable by comparison: Late last year, officials said that they had enough wheat to meet 18 months of the country’s needs.
Food inflation is high even before the impacts of the war really kick in. In February, prices in the U.S. rose 7.9% compared with the same month a year earlier.
Many emerging markets are experiencing double-digit food-price increases. Turkey’s latest official inflation statistics show a 64.5% year-over-year increase. Chinese consumers are actually paying less at the supermarket—February food prices fell 3.9% compared with a year earlier.
In Aesop’s fable, the grasshopper played in summer and went hungry in winter, while the ant that stored food away was comfortable. After consecutive shocks from the pandemic and now a war, more governments may follow the ant’s example. As they give priority to building stockpiles, inflation in important food commodities may have further to go.
UAE Pumps Money Into Egypt As Food-Price Surge Squeezes Economy
* Egypt Has A History Of Protests Linked To Food Prices
* UAE Backs President El-Sisi With $2 Billion Investments
The United Arab Emirates has accelerated a plan to invest billions of dollars in Egypt because it wants to ward off economic shocks from the war in Ukraine that could shake the stability of the Arab world’s most populous nation.
A major food importer, Egypt’s been hit hard by record grain prices fueled by the Russian invasion. One of the Middle East’s most indebted nations, it buys most of its wheat from Russia and Ukraine, using those supplies as a cornerstone for a subsidized program providing cheap bread for 70 million people.
The UAE will invest about $2 billion by buying state-held stakes in companies, Bloomberg News reported this week. That came as the leaders of Egypt, the UAE and Israel discussed energy and food security at a rare meeting.
Bread prices have a politically-sensitive history in Egypt. An attempt in the late 1970s by then-President Anwar Sadat to end subsidies on basic foodstuffs triggered riots that left more than 80 people dead, so governments have since resorted to workarounds such as shrinking the size of loaves.
A person familiar with UAE thinking said it’s investing after Egypt had expressed concerns over food security and that Abu Dhabi sees this as a core issue for President Abdel-Fattah El-Sisi. The Gulf state supported El-Sisi’s overthrow of an Islamist president who came to power following the Arab Spring uprisings a decade ago.
The deals are very much linked to the UAE’s “concern about Egyptian economic security and therefore regime security, given the geopolitical shock of the war in Europe,” said Ryan Bohl, a Middle East analyst at Stratfor Worldview, a geopolitical intelligence platform. The UAE move is a proactive measure, he said.
Wheat is more expensive now than in 2008, when the world saw food riots and demonstrations. Egypt needs to get ahead of any similar discontent, since about half of its people live near or below the World Bank’s poverty line.
Ukraine War Spurs Some Bread-Price Rises in Top Wheat Importer
“The economic shock to Cairo is clear as day” for Abu Dhabi and probably also Riyadh, Bohl said. “Food prices after all contributed to the Arab Spring and Abu Dhabi has zero interest in repeating that history.”
The deals were being discussed before the Ukraine war but as fighting convulsed the global economy, the sides sped up their talks, a second person familiar with the discussions said. The UAE sees Egypt, with its large population and one of the Middle East’s strongest armies, as strategically important, the person added.
“We are dealing with challenges and demands,” El-Sisi said this week, urging people to cut back ahead of the holy month of Ramadan when food sales rise. “With a country of 100 million, this is not simple and requires planning, from the wheat shipments to the availability of bread to the people.”
Attempting to shield its economy from global shocks, Egypt hiked rates, let its currency fall, imposed tough economic measures and sought support from the International Monetary Fund. It announced $7 billion in tax breaks and increases in social spending.
Egyptian TV anchors are echoing the government line, urging people not to panic buy or spend on “trivia.”
“They want us to cut consumption? Well, we have been since 1997!” said Hanaa Mahmoud as she picked up groceries from a market on the outskirts of Cairo. “I cook a good meal once a week now and with very little protein for my children. I’m sorry but I’m literally taking food out of my mouth to feed my kids.”
The international community is unlikely to provide enough help to sustain Egypt’s subsidies, analyst Bohl said.
“So either the UAE and potentially Saudi Arabia provides economic support or Cairo is left to absorb the shocks of the invasion of Ukraine on its own.”
Kazakhstan Plans Egypt Hub For Exporting Grains, Food To Africa
Kazakhstan is looking to establish a logistics center at an Egyptian Red Sea port that would help it ship its grains and other foodstuffs to Africa, Egypt’s agriculture ministry said.
As well as the project at Ain Sokhna port described as a logistical zone for free trade, the two countries are also discussing further agricultural cooperation and investment, according to a ministry statement that cited Kazakhstan’s ambassador.
The central Asian country is one of the approved sources for wheat for Egypt, the world’s biggest importer of the grain.
Spain To Allow Rationing After Supermarket Shortages
The Spanish government will allow rationing of some products by retailers, as part of broad measures to cushion the economic impact of the war in Ukraine.
Stores will be allowed to temporarily limit “the number of goods that can be bought by a client,” according to the rule published in the Official Gazette Wednesday. The government didn’t name any specific type of products that could be affected.
The new rule comes after more than two weeks of protests by truckers over soaring fuel prices caused food shortages in supermarkets across the southern European country. Before that, some markets had restricted the sale of sunflower oil as imports from top producer Ukraine were disrupted by Russia’s invasion.
Ukraine is the main supplier of corn and sunflower oil to Spain, providing 30% and 60% of imports respectively, according to Madrid-based economic consultancy Afi. Madrid has eased grain import rules to increase supplies from Brazil and Argentina.
Rising Costs At U.S. Food Banks Mean People Who Need It Most Are Getting Less
Budget constraints mean that food banks and pantries are having to pull back at a time when hunger is increasing.
In Omaha, the Food Bank for the Heartland is having to slash its food-spending budget, resulting in about 2 million fewer pounds of food for the people in the 93 counties it serves.
The Open Door pantry in Eagan, Minnesota, is handing out 4 pounds less per person, on average. And for the first time in its 35-year history, the West Alabama Food Bank is having to cap the amount of food it gives out.
Food banks and pantries across the U.S. are stretched so thin by soaring operating costs that they’re having to ration what goes out to feed the nation’s hungry.
At the West Alabama Food Bank, pallets that were overflowing with donations just a few months ago are now bare at its warehouse in Northport. Shipments of fresh pears, cheese and milk are waiting for pickup at a distribution facility in Montgomery, roughly 100 miles away.
But Executive Director Jean Rykaczewski can’t afford to retrieve them because a drive that used to cost $450 now is as much as $1,200 thanks to sky-high fuel prices.
Rykaczewski is seeing rising prices for everything: food costs have jumped, gasoline is higher and her most recent power bill was up $500 from the previous month.
“We’re not even in the summertime when it’s 100 degrees in the South, and our freezers and coolers are running continuously,” she said. “That worries me.”
The fastest rate of U.S. inflation in 40 years is hitting companies across the board, but its toll on food banks is unique. The centers are usually a refuge for families who can’t afford to get dinner on the table.
That service is in high demand as Americans deal with soaring costs for gasoline, utilities and rent, leaving less money left over for groceries. But instead of being able to fill the need, budget constraints mean that food banks and pantries are having to pull back just at a time when hunger is increasing.
“This hurts people living paycheck to paycheck, who barely squeak by,” Rykaczewski said. “It’s just like a big tornado. It’s just spinning, and there’s no way out.”
The U.S. has seen rising levels of hunger since the start of the pandemic. Temporary federal aid, like the expanded child tax credit, had brought some relief, but many of those programs have expired.
Now, food prices are also soaring — making it even harder for lower-income families to afford groceries. Some food banks are reporting that demand is back to levels seen in the first half of 2020, when people waited in lines that formed at dawn and stretched for blocks.
More than one-third of U.S. households reported that they had difficulty paying for normal expenses in the prior seven days, with the share rising in both wealthy and poorer states, according to the latest survey by the U.S. Census Bureau.
FoodFinder, a food pantry locator app, averaged 3,000 users a day in the first three months of 2022, about five times higher than the average of 587 users a year earlier.
“We were expecting fewer people on average per day in 2022 because the pandemic is improving, but we’ve seen no slowing down in sight,” said Jack Griffin, chief executive officer.
While many food banks rely on donated goods, they often have to also stretch their operating budgets for purchases to supplement those contributions.
Feeding America, which operates a nationwide network of 200 food banks and 60,000 other food programs and pantries, has asked Congress for $900 million more in funding for food purchases.
The group is expecting its food costs to jump 40% in the fiscal year that ends in June from a year earlier. The nonprofit is also moving twice as many truckloads of food compared with pre-pandemic levels, and it’s costing more to move those supplies, with transportation costs up 20% from the prior year.
“Our food banks and partners are resilient and are doing everything they can to continue to provide nutritious food to our neighbors in need, but we cannot sustain this level of response without the continued support from the public and private sector,” Erika Thiem, Feeding America’s chief supply chain officer, said in an emailed response to questions from Bloomberg News.
The Open Door pantry in Minnesota gets the bulk of its supplies through food rescue — donations of leftover items from retail partners like grocery stores. But with higher food prices, those retailers are buying less, making for fewer contributions.
The organization has seen a 60% drop in meat supplies coming in via food rescue and it’s also having to take more food that’s nearing the end of its shelf life, especially for protein and eggs.
“We see a little bit of frustration among our clients with the lack of supply that we’re able to offer,” said Jason Viana, the executive director. “They feel at their wits’ end. They need to ask for help, and then that help ends up not being enough. That’s a hard truth we have to accept.”
Higher fuel prices are hitting groups that deliver meals to the elderly and other vulnerable populations. Earlier this month, the average retail gasoline price in the U.S. climbed to a record high above $4 a gallon.
In Newport News, Virginia, Peninsula Agency on Aging drops meals off to more than 1,000 seniors and the homebound each day. The group has been lucky enough to not need to cut back on its services so far, but it’s careful to keep delivery routes to under one hour and less than 16 miles. That helps to stretch its $42,000 fuel budget.
“We did not and could not have planned for such unprecedented increases,” said Gerald Patesel, vice president of community services.
As inflation squeezes budgets, many food banks are also seeing a drop-off in donations.
That’s the case for the The Okra Project, which specializes in serving the Black transgender community in New York. The organization is largely driven by small, individual contributions. Since the start of 2022, financial donations have fallen 40%, said Dominique Morgan, the group’s executive director.
“Higher prices are forcing the average person to choose between making the donation they used to make and holding that dollar for themselves,” she said.
That leaves Morgan having to make hard choices about how to stretch the budget to meet the needs of a population that’s already more vulnerable. About 25% of transgender adults and 36% of trans people of color reported experiencing food insecurity compared with 8% of cisgender adults, a 2021 analysis of census data from the Williams Institute at UCLA found.
“Who did I have to say no to today? That keeps me up at night,” Morgan said.
When the pandemic first hit in 2020, the West Alabama Food Bank saw such a big influx for donations that it decided to spend $3.2 million on a new 96,000 square-foot building, almost double its current size, and another $1.8 million to build a cooler and freezer on the premises.
The group is scheduled to move to the upgraded location next year. But as inventory levels decline, and the organization isn’t able to stretch its dollars as far, Rykaczewski is second-guessing the investment.
“My concern is: Oh, my goodness, did I just double the space we have, and are we now not going to need it? Is it going to be sitting half empty?” she said.
How War, Oil And Ships Are Building A Hunger Crisis
Even before Russia invaded Ukraine, food prices had been rising around the world, driven by the higher shipping costs, energy inflation and labor shortages that have followed in the pandemic’s wake, along with extreme weather.
Global food prices are at all-time highs, with a benchmark UN index soaring more than 40% over the past two years. War in one of the world’s major breadbaskets, plus the sanctions imposed on Russia and measures taken by some countries to protect their own food supply have raised the threat of a full-blown hunger crisis. Here are some of the factors at work.
The war in Ukraine initially slowed key agricultural supplies that the Black Sea region ships to world markets, from wheat to vegetable oil to fertilizer, as Ukraine’s ports were shuttered and vessels stayed away. Sales remain tepid out of Ukraine, and the spring plantings remain in doubt as war engulfs the country’s farmlands.
Growers in Ukraine are plunging ahead wherever possible, but ongoing fighting may mean crops won’t get planted or harvests of other crops already sown may suffer. A major Ukraine food exporter, MHP SE, pivoted to supplying the Ukrainian army and civilians in bombed-out cities. On the other hand, Russia’s wheat shipments bounced back, with some of the grain exported to countries that usually imported from Ukraine.
The Energy Crunch
Energy prices began to soar in 2021 as the demands of economies reviving from the pandemic outstripped supplies, and energy and food are deeply intertwined. In Europe, soaring prices for natural gas — a key input for the production of nitrogen fertilizers — has already forced some facilities to curtail production. The price of fuel, used by farmers to heat barns and run equipment used to produce food, is also skyrocketing.
Adding to the stress are sanctions against Russia, a major energy supplier to the world, with the U.S. and U.K. moving to ban imports of Russian crude and other oil products. Surging energy costs as a result of Russia’s war in Ukraine prompted the U.S. to tap roughly a million barrels of oil per day from its strategic reserves for six months starting in May, an unprecedented move that reflects the Biden administration’s concern about rising gasoline prices and supply shortfalls.
Prices of fertilizer, crucial for growing most crops, had already been rising worldwide before the invasion amid supply snags and production woes. Now the war has brought new issues. Russia, a big supplier of every major type of crop nutrient, urged domestic fertilizer producers to cut exports in March, stoking fears of shortages of crop inputs that are vital to growers.
Russia’s move adds uncertainty to the global market when farmers in Brazil — the world’s largest fertilizer importer — are already having trouble getting nutrients for crops. Russian President Vladimir Putin said his country will supply fertilizers to nations that have “friendly relations” with Russia, though it first needs to guarantee fertilizer supplies for the domestic market.
The astronomical surge in prices is even prompting some U.S. farmers to plant more soybeans than corn, a move that could add to a global squeeze on supplies.
Governments are taking steps to keep food supplies closer to home, a move likely to prolong food inflation. Hungary, Argentina, Turkey, Serbia and Egypt have all imposed or threatened limits on agricultural exports ranging from wheat to cooking oil in an attempt to suppress domestic prices and safeguard local food supplies.
Disrupted trade flows in the Black Sea region are likely to hurt the nations in Africa and Asia that rely on Europe’s breadbasket to feed their populations. For example, Egypt is the largest wheat importer and got 86% of its supplies from Russia and Ukraine in 2020.
Shock waves are spreading to store shelves, with worries of surging sunflower oil prices triggering heavy buying in Turkey. Even Indonesia, the world’s biggest exporter of edible oils, is feeling the strain: Supermarkets have restricted cooking oil purchases to one pack per shopper and families are bringing their young children to line up so they can buy more.
Worries over food supplies are also growing in the world’s two most populous nations, China and India. Chinese buyers are scooping up U.S. corn and soybeans to secure supplies as Beijing ramps up its emphasis on food security.
When purchases fall because consumers can’t afford to buy, economists call that “demand destruction.” In India, the blistering rally of vegetable oil has led to a drop in purchases. The nation is the biggest importer of edible oils, indispensable for frying, baking and other forms of cooking, and consumers are extremely sensitive to prices.
In the U.S., budget constraints mean that food banks and pantries are having to ration what goes out to feed the nation’s hungry as Americans struggle with soaring costs for gasoline, utilities and rent, leaving less money left over for groceries.
Alternatives For Supply
Other global suppliers may take strides to fill stockpile shortfalls. India, for example, has increased wheat shipments in recent years and could boost exports to a record 12 million tons if the conflict drags on. But many nations that could typically offset shortages are themselves facing production problems. In Brazil, a major supplier of corn and soybeans, crippling drought has parched crops.
Dry weather also wilted fields in Canada and parts of the U.S. last year. Wheat plantings for 2022 in the U.S. are expected to only increase by 1%, according to a recent government report, and it will be months before those acres get harvested.
European Farmers Turn To GM Feed To Replace Corn From Ukraine
* Ukraine Is A Key Supplier For Spain And The Netherlands
* Alternative Suppliers In The U.S. And Brazil Produce GM Corn
European farmers are set to buy more genetically modified animal feed from the U.S. and South America after Russia’s invasion cut off corn shipments from Ukraine.
The war in Ukraine is already pushing companies to turn to alternatives to sunflower oil, and that shift in trade flows is also likely to include corn, which is mainly used as animal feed. Ukraine’s non-GM corn accounts for about half the European Union’s imports. However, 92% of U.S. corn is GM, according to the Center for Food Safety, with similar levels in Brazil.
While companies in the EU don’t have to label meat or products from animals fed GM crops, over the past decade, consumer demand has increased for dairy produce from cows fed with the non-GM variety.
As the EU shifts to shoring up food security, it’s relaxing import rules. In Spain, which is expecting corn shipments from the U.S., Argentina and Brazil over the next two weeks, the government is temporarily allowing imports with traces of pesticides to compensate for the loss of Ukraine output.
That will help to avoid shortages, said a spokesperson for CESFAC, the association of feed makers in Spain, one of Ukraine’s biggest customers, along with the Netherlands.
The price of corn and other grains have surged in the wake of Russia’s invasion. Ukraine had exported about 6.6 million tons of corn to the EU by the end of March, compared with a five-year average of 7.2 million tons.
Strategie Grains head Andree Defois forecasts that the EU will import 800,000 tons of U.S. corn this season, the most since 2017-18.
“Some farmers in central Europe and Denmark are starting to run out of non-GMO feed,” Ase Andersson, global head of media at dairy giant Arla, said in an email.
Food Prices Jump Most On Record As War Sparks Supply Chaos
* UN Gauge Of World Food Costs Climbed To Fresh Record In March
* Higher Prices Are Contributing To Inflation And Hunger Crisis
Global food prices are surging at the fastest pace ever as the war in Ukraine chokes crop supplies, piling more inflationary pain on consumers and worsening a global hunger crisis.
The war has wreaked havoc on supply chains in the crucial Black Sea breadbasket region, upending global trade flows and fueling panic about shortages of key staples such as wheat and cooking oils.
That’s sent food prices — which were already surging before the conflict started — to a record, with a United Nations’ index of world costs soaring another 13% last month.
Ukraine’s ports are closed and many vessels are avoiding the region, which accounts for about a quarter of all grains trade. Farmers in Ukraine, the top sunflower-oil exporter, are expected to drastically cut crop plantings and the nation is struggling to export supplies already harvested.
Elsewhere in the world, high energy and fertilizer prices are raising food-production costs, which is feeding through to bigger grocery bills or threatening output.
The food price rally is felt most in poor countries where groceries make up a large share of consumer budgets — and the fallout from Russia’s invasion has sent costs of basic foods like bread soaring.
The United Nations’ World Food Programme recently said expensive staples in import-dependent Middle Eastern and North African nations are putting people’s resilience at a “breaking point.”
The surging costs are spurring some countries to hold off on imports, seek new suppliers or draw down local stockpiles, though that won’t be a long-term fix, said Erin Collier, an economist at the UN’s Food and Agriculture Organization.
“It’s basically kind of deterring demand,” she said in an interview. “That can only last for so long. Wheat is a staple food.”
The FAO’s gauge of global prices has jumped about 75% since mid-2020, eclipsing levels seen in 2008 and 2011 that contributed to global food crises. Last month’s surge helped prices round out a seventh straight quarterly gain, the longest such run since 2008.
The UN has warned that prices could still climb much more.
That’s bad news for the world’s hunger problem. Cost increases stemming from the war and resulting sanctions on Russia will — without action — push more than 40 million additional people into extreme poverty, according to an analysis published last month by the Center for Global Development, a non-profit think tank whose funders include Bloomberg Philanthropies.
Aside from the food-supply risks associated with the war in Ukraine, farmers around the world continue to contend with severe weather events and the impact of climate change.
For example, the worst drought in decades is causing millions of livestock to die in the Horn of Africa, while global warming is making food insecurity more severe in places like Afghanistan.
The FAO raised its outlook for global grain stockpiles — usually a good sign for supplies — but said most of that is due to stranded grain in the Black Sea region.
Ukraine’s exports will be particularly hard hit from the war, with wheat shipments falling 5 million tons and corn down 12.5 million tons from a previous estimate. Freight and financing challenges are also impairing Russian sales.
The problems will also drag into the next season. Ukraine planted its wheat months before the war erupted, and the FAO expects at least 20% to go uncollected because of destruction, constrained access to fields or a lack of resources for harvests. Russian production could be affected by challenges importing agricultural inputs, it said.
“Looking forward to 2022-23, we’re already seeing signs that production is going to be reduced in Ukraine,” Collier said. “The amount they’re able to export really depends on how much longer this conflict continues.”
Yellen Plans Global Food-Crisis Summit As IMF, UN Urge Action
* War Hitting Ukraine, Russia Grain Production And Delivery
* Climbing Food Prices To Spread Hunger Among Poor Nations
U.S. Treasury Secretary Janet Yellen will convene a meeting of top international financial officials next week to address a global food-security crisis, with the heads of institutions including the IMF urging action to address dire consequences of record price surges caused by Russia’s invasion of Ukraine.
“With over 275 million people facing acute food insecurity, I am deeply concerned about the impact of Russia’s war on food prices and supply, particularly on poor populations,” Yellen said in a speech to the Atlantic Council think tank in Washington Wednesday.
Next week’s food summit will take place in Washington alongside the spring meetings of the International Monetary Fund and World Bank.
Participants will include ministers representing the G-7 and G-20, International Monetary Fund Managing Director Kristalina Georgieva and World Bank President David Malpass, according to Treasury spokesperson Alexandra LaManna.
Georgieva, Malpass, United Nations World Food Program Executive Director David Beasley and World Trade Organization Director General Ngozi Okonjo-Iweala issued a joint statement asking the international community to support vulnerable countries through grants to cover urgent financing needs.
High food prices and supply shortages are “increasing pressure on households worldwide and pushing millions more into poverty,” the leaders said, adding that their institutions stand ready to address the crisis.
“The threat is highest for the poorest countries with a large share of consumption from food imports, but vulnerability is increasing rapidly in middle-income countries, which host the majority of the world’s poor.”
Speaking in a question-and-answer session after her Atlantic Council speech, Yellen said “this will be an urgent concern for us next week to try and think about how we can stave off starvation around the world.”
Soaring food prices will contribute to sending more than a quarter-billion more people around the world into poverty this year, charity group Oxfam International warned earlier this week.
Ukraine and Russia are among the top five grain exporters, and the war poses a massive blow to both production and shipments, causing food prices to rise at their fastest pace yet. Several countries, including Egypt, Turkey Bangladesh and Iran buy more than 60% of their wheat from Russia and Ukraine, a United Nations report shows.
The Washington confab will discuss “the urgent response to the ongoing food security crisis that has been severely exacerbated by Russia’s invasion of Ukraine,” LaManna said.
Hunger And Blackouts Are Just The Start Of An Emerging Economy Crisis
Fed hikes and pandemic debt piles add to the risks for developing nations. Some are already sliding into turmoil.
A barrage of shocks is building that’s unlike anything emerging markets have had to confront since the 1990s, when a series of rolling crises sank economies and toppled governments.
Turmoil triggered by rising food and energy prices is already gripping countries like Sri Lanka, Egypt, Tunisia and Peru. It risks turning into a broader debt debacle and yet another threat to the world economy’s fragile recovery from the pandemic.
Compounding the danger is the most aggressive monetary tightening campaign the Federal Reserve has embarked on in two decades.
Rising U.S. interest rates mean a jump in debt-servicing costs for developing nations — right after they borrowed billions to fight Covid-19 — and tend to spur capital outflows.
And on top of it all: the stark reality that war in Europe, which is driving the latest food and energy shock, shows few signs of ending.
The cocktail of risks has already pushed Sri Lanka to the brink of default on its bonds. A handful of other emerging economies, from Pakistan and Tunisia to Ethiopia and Ghana, are in immediate danger of following suit, according to Bloomberg Economics.
Of course, the developing world’s commodity exporters stand to benefit from higher prices. Still, there are other troubles brewing, with a new Covid-19 outbreak locking down key cities in China, and growing angst that Europe and the U.S. will fall into recession.
The world’s top economic policy makers are sounding the alarm. The dominant themes at the spring meetings of the International Monetary Fund and World Bank in Washington this week are a slowing global economy and the rising risks — seen and unseen — facing developing nations.
The IMF, in its latest World Economic Outlook, likened the war’s impact to “seismic waves” rolling over the global economy. It also warned of the possible return in emerging markets of the sort of “doom loop” that led Russia to default in 1998, helped bring Vladimir Putin to power and took hedge fund Long Term Capital Management to the verge of collapse.
The World Bank slashed its global growth forecast and announced the creation of a $170 billion rescue package — bigger than its Covid-19 response — for crisis-hit nations.
“We can see this train wreck coming towards us,” said John Lipsky, who spent half a decade as No. 2 at the IMF. The combination of real-economy shocks and financial-market tightening, he said, is “going to push a large number of low-income countries into the need for debt restructuring.”
The biggest default looming in emerging economies is in Russia, where Putin’s decision to invade Ukraine has brought sanctions, economic isolation, and a pledge to pay debts only in rubles — which would likely be ruled a breach of commitments, triggering losses for investors.
Still, Russia’s role as the sanctions-hit aggressor make it a unique case. Which means Sri Lanka, for now, is at the vanguard of the potentially broader crisis.
The country’s currency is down nearly 40% this year. Last week, it suspended foreign debt payments, deciding to use what’s left of its reserves to cover food and energy imports rather than pay investors.
For people like Jagath Gunasena, the crisis has already arrived. It’s meant sending his wife and son to stand for hours to refill the cooking-gas cylinder they need to run their Colombo food stall — only to see them turned away when supplies run out.
“At least we have leftovers from our food stall to eat,” Gunasena said. “I don’t know how the others will find ways to cook or get by.”
That kind of uncertainty has driven protesters to call for President Gotabaya Rajapaksa to resign even as his government tries to negotiate help with the IMF and Asian powers like China and India.
Sri Lanka may be the first. But it’s not alone. Some 13 emerging countries have bonds trading at least 1,000 basis points above U.S. Treasuries, up from six a year ago.
Credit-default swaps on developing-country debt spiked in the first weeks of the Ukraine war, showing a growing fear of default — and while they’ve since retreated, they’re still some 90 basis points above last year’s average.
Bloomberg Economics, which keeps scorecards of the building risks for EM countries, puts Turkey and Egypt top of the list of major emerging markets exposed to “economic and financial spillovers” from the Ukraine war.
And it ranks Tunisia, Ethiopia, Pakistan, Ghana and El Salvador — with large debt stocks and borrowing costs that have risen by more than 700 basis points since 2019 — among countries in immediate danger of being unable to repay debts.
‘Start To Surface’
The direct impact of a default in five countries such as these on the global economy would be small, but crises in the developing world have a history of spreading well beyond their starting points. “In a cascade of emerging-market credit events, the negative impact of the whole could be larger than the sum of the parts,” wrote Ziad Daoud, Bloomberg Economics’ chief EM economist.
The World Bank calculates 60% of low-income countries are in debt distress already, or at high risk of it. So far, the trouble is brewing in the sort of “off the radar screen” places investors don’t pay much attention to, said the Bank’s chief economist, Carmen Reinhart.
That doesn’t mean it will stay that way. Reinhart cited the example of LTCM, which was bailed out in 1998 due to losses in Russia and other emerging markets. “That wasn’t necessarily on anyone’s radar screen,” she said. “Those things start to surface. Exposures are opaque.”
Governments all over the emerging world stepped up their borrowing to cushion the pandemic’s impact. The cost of servicing those debts is rising “on a steep incline,” according to the IMF.
A record amount of that debt is now held on balance sheets of local banks in emerging economies, according to the IMF — raising the risk of a feedback loop in which banks are forced to pull back on lending as economies slow and the value of the government bonds they own falls.
Which in turn may lead to the sort of economic “doom loop” that drove Russia to default in 1998 and Argentina to a similar fate a few years later.
The increase in borrowing costs is likely to get steeper still as the Fed’s efforts to combat inflation at home lead to higher interest rates on U.S. Treasuries, the benchmark for many developing economies. Central banks across much of the emerging world are raising their own policy rates too, as prices surge.
Jim O’Neill, the former Goldman Sachs economist who coined the term BRICs in the early 2000s to describe the then fast-growing emerging markets of Brazil, Russia, India and China, said the current environment is the most uncertain he’s seen since he began his career in finance in the early 1980s.
“If we get the inflation risk persisting and central banks have to tighten policy, for certain emerging markets it will be a disaster,” he said.
One sign of trouble ahead is the lengthening line of countries in rescue talks with the IMF.
Along with Sri Lanka, it includes countries with similar balance-of-payments problems like Egypt and Tunisia, where food prices helped drive regime change just a decade ago.
And Pakistan, where high inflation and geopolitical tensions combined to topple premier Imran Khan this month — and where the government is cutting electricity to households and industry because it can’t afford to buy coal or natural gas from abroad to fuel its power plants.
In Tunisia, the cradle of the 2011 Arab Spring uprisings, a cash-strapped government has raised fuel prices at least 4 times over the past 13 months. Tourism has dried up, and shortages are spreading to the point where market vendors joke that marijuana is easier to buy than flour.
Raed, a 26-year-old baker, said he can’t get enough flour on the black market at prices far above the official, subsidized one to keep his shop open. “The situation is very bad,” he said. So he’s decided that once the holy month of Ramadan is over, he’ll join the legions of migrants trying their luck elsewhere.
In nearby Egypt, the world’s largest wheat importer, the disappearance from the market of supplies from Russia and Ukraine has hit hard. Last month, the central bank let the currency weaken more than 15% in a matter of hours and hiked its benchmark rate for the first time in five years amid an outflow of hard currency.
President Abdel-Fattah El-Sisi has urged people to make do with less-lavish meals when they break their Ramadan fast.
The government “is asking us to ration our consumption, but we’ve already been doing this,” said Ezzat Mohamed, who lives in the rural Qalyubiya province, where stores have begun offering food on credit.
To be sure, many developing nations sell more commodities than they buy, and benefit from rising prices. They’re typically a boon in regions like Latin America, for example – where Brazil’s real is the world’s best-performing major currency this year, and Chile’s exports in March were up more than 20% from a year earlier.
‘Skeletons In The Closet’
Robin Brooks, chief economist at the Institute for International Finance, predicts the fallout from the Ukraine war will largely be limited to food and energy importers.
Busts often follow booms — and there haven’t been many of the latter in an emerging world that’s had a rough ride from Covid-19, Brooks points out. By contrast, the crises of the 1990s erupted in economies where capital had been pouring in, and its abrupt departure revealed flaws in corporate balance sheets.
Even with risks rising because of an increasingly aggressive Fed, “I’m not as worried as others about skeletons in the closet,” he said.
But if that pandemic backdrop leaves emerging countries less vulnerable to capital outflows, the opposite is true when it comes to social tensions.
That’s one reason why it’s hard not to see something broader in the political and economic turmoil starting to hit the poorest corners of the global economy. Oxfam is warning that more than a quarter of a billion people could be pushed into extreme poverty this year.
Latin America’s commodity exporters aren’t immune from political unrest — Peru, with one of the world’s highest Covid death rates, has been rocked by weeks of violent protests — or even a weakening of their external position.
Peru’s current-account balance swung from a surplus of 0.8% of GDP at the end of 2020 to a deficit of 2.8% a year later. In neighboring Colombia and Chile, deficits widened to around 6% and 7% of GDP respectively in the final quarter of last year.
Foreign investors also own a majority of the sovereign debt in those countries, which has ballooned by 10-15 percentage points of GDP over the past two years, Gavekal Research pointed out in a recent note.
“Emerging market asset prices — including those of commodity exporters — may be a lot more vulnerable to swings in the external environment than is currently assumed by investors,” its economists wrote.
In Brazil, less than six months ahead of presidential elections, opinion polls show that 75% of the public blames President Jair Bolsonaro’s government for a surging cost of living.
Although the country’s central bank is months into an aggressive tightening campaign, Brazil’s inflation rate was still 11.3% in March. The problem is that, as in many parts of the world, prices feed off each other and higher fuel costs make food more expensive too, said Thais Zara, an economist at LCA Consultores in Sao Paulo.
Bolsonaro is using a commodities windfall to expand cash aid to the poor ahead of the election and has pumped $32 billion of credit into the economy.
But in Rio de Janeiro’s markets the anxiety about what lies ahead remains real. Maria Conceicao loaded up on fish for her family ahead of last weekend’s Easter celebrations. “We’ll celebrate with fish now, but will have less later,” she said. Because for Conceicao, like millions of others in the developing world, the grim reality is: “Each month gets worse.”
Rockefeller Foundation’s Shah Sees ‘Massive’ Global Food Crisis
Rockefeller Foundation President Rajiv Shah called for debt relief and emergency aid to poorer nations to avert a “massive, immediate food crisis” emerging in poorer nations following Russia’s invasion of Ukraine.
The war has put at risk exports of wheat, corn, sunflower oil and other foods from Russia and Ukraine that account for more than 10% of all calories traded globally, driving up food prices in low-income countries that are already reeling from pandemic damage to their economies.
The U.S. should lead efforts to “fully fund” the United Nations World Food Programme and pre-position emergency food supplies in countries expected to face food shortages in the next six months, Shah, a former U.S. Agency for International Development administrator during the Obama administration, said in an interview on Bloomberg Television’s “Balance of Power With David Westin.”
“These strategies have been done before and have worked in the past,” Shah said.
Disruptions in global fertilizer supplies caused by the war will have an “even worse” impact on global hunger, cutting crop yields in Africa and other parts of the developing world, he said.
Shah also called for debt relief for struggling nations so they can purchase fertilizer and food for their people with “money that would otherwise go to creditors in the rich world, including the World Bank.”
Peru Risks Hunger Spike On Fertilizer Shortages, Food Producers Warn
* Crop-Nutrient Crisis Has Led Farmers To Block Roads In Protest
* Production Of Rice, Potato And Corn May Fall As Much As 40%
A shortage of fertilizers is threatening to create a hunger crisis in Peru as political upheaval distracts authorities from scouring for alternative supplies amid the war in Ukraine, food producers warn.
Peru’s agricultural industry is facing a deficit of 180,000 metric tons of urea, a key nitrogenous fertilizer, with output of staples such as of rice, potato and corn set to fall as much as 40% unless a solution is found in the coming months, according to Eduardo Zegarra, an agrarian economist and researcher at think tank GRADE.
Around the world, fertilizer prices have surged after Russian’s invasion of Ukraine pushed up the cost of natural gas, the main input for most nitrogen fertilizer, forcing some producers in Europe to cut output. Markets also worry that potential sanctions on Russia, a big low-cost shipper of every major kind of crop nutrient, could disrupt global trade. Russia accounted for 70% of Peru’s fertilizers last year.
“The issue of hunger for the population, for millions of citizens of the country, that is today’s problem,” Climaco Cardenas, president of Peruvian farming association Conveagro, told Radio Exitosa.
The situation has led farmers to block roads to push for the dissolution of Congress and for an agrarian reform promised by President Pedro Castillo. At the same time, authorities are debating measures to ease inflationary pressures on the population.
Castillo’s administration has been beset with bitter clashes with congress and a slew of cabinet changes, with a fifth prime minister scheduled to be announced in the coming days. After two failed bids to oust the left-wing president, opposition parliamentarians are investigating him for alleged treason.
“The fertilizer crisis is one of national security,” Zegarra said. “If, in coming months, Peru doesn’t buy urea from somewhere, the agricultural season will be a disaster.”
Cooking-Oil Chaos Exacerbates A Looming World Hunger Crisis
Indonesia is halting palm oil exports in the midst of high inflation, weather woes and tight supplies.
The world’s supply of cooking oil — already squeezed by war — is getting smaller.
Two months after Russia’s invasion of Ukraine upended global agricultural trade, Indonesia is set to ban exports of cooking oil in the wake of a local shortage and soaring prices, adding to a raft of crop protectionism around the world.
The country accounts for more than a third of global vegetable-oil exports, with China and India, the two most populous countries, among its top buyers.
Indonesia’s supply of edible oil to the world is “impossible to replace,” said Carlos Mera, head of agricultural commodity markets research at Rabobank. “It’s definitely a big blow.”
Indonesia is the biggest producer of palm oil, the world’s most consumed edible oil. The southeast Asian nation’s announcement of the ban on Friday sent U.S. futures tied to soybean oil, an alternative to palm, soaring to the highest price on record for a third straight day.
In the U.K., some supermarkets are limiting purchases of cooking oils, like sunflower, olive and rapeseed.
Russia’s invasion of Ukraine has thrown the trade of sunflower oil into chaos and is squeezing already tight supplies of other vegetable oils used in food, biofuels and personal care products.
Weather woes across the world’s major producers of edible oils are adding to fears of shortages. Dryness has crimped the size of soybean harvests in South America, the world’s biggest producer, and drought in Canada shrank production of canola, leaving little available supply.
While limited supply and soaring prices are set to worsen inflation of food items like salad dressing and mayonnaise in wealthy economies like the U.S., developing nations like India are set to feel the worst impacts. Such countries depend on imports of palm oil as a cheaper alternative to more costly soybean, sunflower and canola oil.
“We are terribly shocked by this decision of Indonesia,” said Atul Chaturvedi, president of Solvent Extractors’ Association of India, and edible oil trade group. “We were not expecting a ban like this.”
The surge in core food costs is also leading to the biggest debate in a decade over using farmland to grow crops for producing fuel. The American Bakers Association, whose members produce 85% of U.S. baked goods, is warning about empty grocery store shelves.
“We desperately need the U.S. Environmental Protection Agency to take the right action to allow soybean oil stocks to shift back into food instead of being diverted to biodiesel production,” said Robb MacKie, the trade group’s president.
Food-versus-fuel tensions are also flaring in other regions, including Indonesia.
The latest action by Indonesia is certain to “aggravate” food inflation that’s already at a record high, said Tosin Jack, commodity intelligence manager at Mintec in the U.K.
Tight vegetable oil supplies are already prompting food manufacturers to improvise with their products, including trying to come up with new formulations and switch to substitutes when possible, according to Jack.
For makers of packaged items like chips — whose ingredient lists often allow flexibility by stating the food can contain multiple vegetable oils — the move by Indonesia takes one more oil off an ever-shrinking list.
Changing food recipes though can be daunting and “does not necessarily produce a product with the same sensory characteristics,” said Jeannie Milewski, executive director for The Association for Dressings & Sauces, an Atlanta-based trade group that represents makers of products that most often rely on soybean oil.
Soybean oil futures in the U.S. have nearly doubled since the start of 2021, driven in part by higher demand for ingredients to make biofuel. Prices then shot up to the highest on record after Russia’s attack on Ukraine disrupted sunflower oil shipments and set off demand for alternative commodities.
Canadian canola had already climbed to an all-time high last year as devastating drought shrank crops across North American prairies. Palm oil in Asia has risen about 50% and rapeseed in Europe 55% in the past 12 months.
Still, “despite record prices overall, vegetable oil demand remains high because vegetable oils are an essential part of diets in all countries and particularly in countries like India, Pakistan, Bangladesh,” said John Baize, an independent analyst who also advises the U.S. Soybean Export Council.
Baize calls Indonesia’s restriction on palm oil exports a “big deal” but expects it won’t last long. He noted that Indonesia exported 26.87 million metric tons of palm oil in 2021 compared with consuming 15.28 million metric tons domestically.
For now, Indonesia’s ban intensifies worries about food costs and shortages, with expectations that other countries are likely to make similar moves as the war in Ukraine drags on.
“We’re likely to see a few more,” said Rabobank’s Mera. “That exacerbates the concerns.”
Supermarkets Limit Cooking Oil Purchases After Supplies Hit By Ukraine War
Supermarkets across the UK have placed limits on how much cooking oil customers can buy due to supply-chain problems caused by Russia’s invasion of Ukraine.
Tesco is allowed three items per customer while Waitrose and Morrisons have placed limits of just two items each, according to the BBC.
In comments carried by the broadcaster, the British Retail Consortium’s Tom Holder said the move was a temporary measure “to ensure availability for everyone”.
Most of the UK’s sunflower oil comes from Ukraine, with the restrictions applying to that product as well as olive and rapeseed oils at some supermarkets.
Mr Holder said retailers were “working with suppliers to ramp up production of alternative cooking oils, to minimise the impact on consumers”.
Recent data showed cooking oil was one of a range of food staples to have its price shoot up.
The price of cooking oils and fats went up 7% and is nearly a quarter more expensive than a year ago, the Office for National Statistics said on April 13.
The Russian tanks and missiles besieging Ukraine are also threatening the food supply and livelihoods of people in Europe, Africa and Asia who rely on the vast, fertile farmlands of the Black Sea region known as the “breadbasket of the world”.
Can The World Feed Itself? Historic Fertilizer Crunch Threatens Food Security
A run-up in prices and shortage of man-made nutrients are forcing the agriculture industry to adapt, and the impact could be severe.
For the first time ever, farmers the world over — all at the same time — are testing the limits of how little chemical fertilizer they can apply without devastating their yields come harvest time. Early predictions are bleak.
In Brazil, the world’s biggest soybean producer, a 20% cut in potash use could bring a 14% drop in yields, according to industry consultancy MB Agro. In Costa Rica, a coffee cooperative representing 1,200 small producers sees output falling as much as 15% next year if the farmers miss even one-third of normal application.
In West Africa, falling fertilizer use will shrink this year’s rice and corn harvest by a third, according to the International Fertilizer Development Center, a food security non-profit group.
“Probably farmers will grow enough to feed themselves. But the question is what they will have to feed the cities,” said Patrice Annequin, a senior fertilizer market specialist for IFDC based in Ivory Coast. When you add increased hunger across West Africa on top of existing risks like terrorism, “this is absolutely dangerous for many governments in our region.”
For the billions of people around the world who don’t work in agriculture, the global shortage of affordable fertilizer likely reads like a distant problem. In truth, it will leave no household unscathed.
In even the least-disruptive scenario, soaring prices for synthetic nutrients will result in lower crop yields and higher grocery-store prices for everything from milk to beef to packaged foods for months or even years to come across the developed world.
And in developing economies already facing high levels of food insecurity? Lower fertilizer use risks engendering malnutrition, political unrest and, ultimately, the otherwise avoidable loss of human life.
“I’m reducing the use of fertilizer in this crop cycle. I can’t afford such stratospheric prices,” Marcelo Cudia, 61, a farmer in the Philippines’ rice-producing region of Central Luzon, said outside the patch of land he’s been cultivating for the last 13 years.
About 12,000 miles away, Brazilian soybean farmer Napoleão Rutilli is facing the same tough choices. “If fertilizers are expensive, we’ll use less fertilizers. If we’ll use less, we’ll produce less,” said the second-generation farmer, 33. “Food prices will increase and everyone will suffer.”
Why Are Fertilizer Prices Going Up?
Commercial farmers rely on a combination of three key nutrients — nitrogen, phosphorus and potassium — to fuel their harvests. Those inputs have always been key, but it was only about a century ago that humanity learned to manufacture mass-produced ammonia-based nutrients.
The discovery of the Haber-Bosch method in the early 1900s, which is still used to make fertilizer today, has allowed farmers to vastly increase their yields.
The agriculture industry has since come to depend on — even hinge on — man-made fertilizer. Although soil’s needs are different region to region, the general trend is pretty undisputed: More fertilizer use brings more food production.
But as costs for synthetic nutrients have skyrocketed — in North America, one gauge of prices is nearly triple where it was at the start of the pandemic — farmers have had to start paring back use, sometimes dramatically. That’s put the world in uncharted territory.
“Fertilizer prices are up an average of 70% from last year,” said Timothy Njagi, a researcher at the Tegemeo Institute of Agricultural Policy and Development in Kenya, referring to prices in the country. “The fertilizer is available locally, but it’s out of reach for the majority of farmers. Worse, many farmers know that they cannot recover these costs.”
Prices have been climbing for more than a year for a host of reasons: runaway pricing for natural gas, the main feedstock for much of the world’s nitrogen fertilizer; sanctions on a major Belarusian potash producer; back-to-back late-summer storms on the U.S. Gulf Coast that temporarily shut-in production in the region; plus Covid-19 restrictions that have disrupted every global supply chain, including chemicals.
That tightening in the physical fertilizer market has galvanized China, the largest phosphate producer, to restrict outgoing shipments in order to build up a stockpile at home, further exacerbating the global shortage.
Add Russia’s invasion of Ukraine, which effectively cut off nearly a fifth of the world’s nutrient exports, and the fertilizer industry and its pricing mechanisms are arguably more broken than ever before.
“Fertilizer sales are very, very low, to the point of desperately low, and this should be traditionally the busiest time of the year,” said Jo Gilbertson, head of fertilizer at Agricultural Industries Confederation, a U.K.-based trade association. “The seeds of the problem are being sown now.”
How Will Lower Fertilizer Use Hit Output?
“My biggest concern is that we end up with a very severe shortage of food in certain areas of the world,” Tony Will, the chief executive of the world’s largest nitrogen fertilizer company CF Industries Holdings Inc., said in a March interview.
In the Philippines, urea — a key nitrogenous fertilizer — is now about 3,000 pesos (about $57) per bag, and even more when transported to the fields. That’s more than three times the price at this time last year, said Roger Navarro, president of Philippine Maize Federation Inc.
“Farmers will tend to decrease the usual fertilizer dose of their crop and that will lessen the production,” he said, forecasting a 10% drop in yields. “It is rather sad, but this is reality.”
The yield outlook is even worse elsewhere. Peru’s agricultural industry is facing a deficit of 180,000 metric tons of urea, and output of staples such as rice, potatoes and corn could tumble as much as 40% unless more fertilizer becomes available.
The International Rice Research Institute predicted crop yields could drop 10% in the next season, meaning there’ll be 36 million fewer tons of rice — enough to feed 500 million people.
In Sub-Saharan Africa, food production could drop by about 30 million tons in 2022, equivalent to the food requirement of 100 million people, the IFDC said in December — and that forecast was made before the war in Ukraine pushed prices to new records this spring.
There’s also a growing concern less fertilizer use will result in lower-quality crops. Just ask Gary Millershaski, who farms nearly 4,000 acres of wheat and roughly 3,000 acres of corn and sorghum in southwest Kansas.
Also chairman of the Kansas Wheat Commission, Millershaski said the commission’s “biggest fear” this spring is that farmers may have skipped applying nitrogen as the wheat emerged from winter dormancy several weeks ago. If they did, it could hurt protein content of the grain and result in a “lower class of wheat.”
With nearly half of U.S. wheat exported to other countries, that’s a problem that will impact consumers the world over. The harvesting of hard red winter wheat, the most widely grown class in the U.S. and the grain that’s used to make all-purpose flour, will begin in June.
How Will Lower Fertilizer Use Hit Inflation?
Without a doubt, the food that is produced will be more expensive. Global food prices are already surging at the fastest pace ever as the war in Ukraine hits crop supplies, with a United Nations index of world food costs soaring another 13% in March.
“Food security is in peril,” Philippines Agriculture Secretary William Dar said in a text message to Bloomberg News.
Rising food prices, without a corresponding increase in incomes, have a long history of triggering social unrest. In 2008 and 2011, soaring inflation triggered food riots in more than 30 nations across Asia, the Middle East and Africa, helping to fuel uprisings in the Arab Spring.
“That’s the big concern: Will the high prices of food have a boomerang reaction?” said Gideon Negedu, executive secretary of the Fertilizer Producers and Suppliers Association of Nigeria and a member of the Presidential Fertilizer Initiative. “The food markets may begin to react to these prices because there is no commensurate increase in average household incomes.”
What Can Farmers Do?
Farmers aren’t sitting idly by. Those who managed to secure fertilizer ahead of the latest run-up are being more strategic about how much they use, including leaning into “precision agriculture.” That means collecting more data on their fields, monitoring crops for increased efficiency and rolling out other data analysis tools.
Farmers are increasingly testing soil for lingering nutrients and applying exactly as much fertilizer is needed, rather than an overly generous ballpark — a practice that’s been in use across some places like the U.S. and parts of Brazil for decades but isn’t yet commonplace in some other parts of the word.
If a soil tests high for phosphorous or potassium, “often little to no fertilizer is needed at all,” said Carrie Laboski, professor and extension soil scientist at University of Wisconsin-Madison.
For some crops like corn, growers might apply a little bit of “starter fertilizer” when they’re planting, which is like insurance if soils are testing high for crop nutrients. When it comes to nitrogen, “they shouldn’t eliminate it, but cut back,” she said.
Some farms are also exploring controlled-release formulations, like tiny capsules of nutrients that dissolve slowly over time. Although not a solution for many commercial farms given their large scales, others are exploring alternatives to chemical fertilizers, including animal waste.
“Compost and sewage sludge and biosolids or organic nutrients become more valuable,” said Mark Topliff, lead analyst for farm economics at the Agriculture and Horticulture Development Board in the U.K. “The supply of those has been stretched” as more growers turn to alternatives.
Some farmers are even moving away from high-fertilizer crops altogether, like corn, in favor of lower-demand plantings like beans.
Tregg Cronin, a U.S. farmer in central South Dakota who chooses between growing wheat, corn, sunflowers, oats and soybeans, has found himself in an enviable situation: Drought last year left Cronin’s soil with excess nitrogen.
So he’s opting to plant 10% more acres of sunflowers — which need the nitrogen more than soybeans do. But if fertilizer prices stay high in the months ahead, next year he’ll pivot to more soybeans. Others are making similar calculations — and hoping they’re betting in the right direction.
“If you really want to play 3D chess,” he said, “you need to be thinking about your rotation next year more so than this year.”
Food Banks Are Serving More People Again As Inflation Squeezes Budgets
Higher costs and supply-chain problems are straining organizations as they look to meet rising demand.
Food banks are straining to meet growing demand caused by rising food prices, which are pinching budgets for households and the organizations themselves.
Forgotten Harvest, which serves the metro Detroit area, said demand increased 25% to 45% since December in different areas it serves. In March alone, demand rose 30% compared with the previous month.
Christopher Ivey, a spokesman for the food rescue, says metro Detroit is at the front of the bell curve, experiencing economic ripples before they hit other parts of the U.S.
“The need is growing quickly, as gas prices are continuing to rise,” he said. “As you know, there are shortages in the grocery store and the costs of the commodity goods are going up and up and up,” he said, adding that the organization is challenged by the increased demand but is still able to fulfill the needs of the public.
With inflation at a four-decade high, American households are feeling the pinch of higher prices across a range of products and services.
The price of food at grocery stores in March was 10% higher than a year earlier, while food prices at restaurants were 6.9% higher than in March 2021, according to the Labor Department’s most recent consumer-price index.
A recent survey by Feeding America, which runs a nationwide network of 200 food banks and 60,000 food pantries and meal programs, found that around 85% of its food banks saw demand for food assistance increase or stay the same in February compared with the previous month. That represented about a 20% increase from the previous survey in January.
The pressures follow two difficult years caused by the Covid-19 pandemic.
Lines snaked along streets outside food banks in 2020, as the arrival of the novel coronavirus brought the U.S. economy to a slowdown and the demand for free milk, vegetables and canned items surged.
Although businesses began to broadly reopen after the introduction of Covid-19 vaccines, food insecurity lingered in major metropolitan areas amid global supply issues, a worker shortage and persistent pandemic.
“I think one of the things that the pandemic illuminated is that food insecurity has plagued much of America even before this pandemic took hold,” said Allison Korn, the director of the Food Law & Policy Clinic at the University of California, Los Angeles.
Ms. Korn said that with the addition of inflation, people who weren’t necessarily part of historically disenfranchised groups are now experiencing food insecurity at higher rates.
“You will continue to see folks come into food banks who are seniors, who are undocumented individuals, and persons who suffer from disabilities,” she said. “But you’re also seeing folks who are just kind of trying to cobble together jobs who may suffer from chronic and persistent unemployment.”
In addition to inflationary pressures bringing more people to food banks and pantries, they are making providers strain to get enough food to hand out to those who need it most.
“We have had to work harder to secure the food needed to support the community,” said Tim Fetsch, the chief operating officer of the St. Louis Area Foodbank, which began in 1975 and provides food for nearly 400,000 people each year.
Mr. Fetsch said the pandemic and current economic climate have significantly affected the organization’s supply chain because of increased food costs, rising transportation costs and the limited availability of food.
The food bank has traditionally relied heavily on retail partnerships for donations. But those retailers are experiencing the same supply-chain issues and, in turn, have reduced the amount of food they donate, Mr. Fetsch said.
Feeding America has been able to close the gap in its food availability by purchasing food—something it rarely had to do in the past since most food was donated, according to President and Chief Operating Officer Katie Fitzgerald. She said food banks in the organization’s network increased food purchasing by close to 60%.
But with food companies raising prices on everything from snacks to mustard amid inflationary pressures, it will be hard to maintain. “We’re still trying to purchase that food, but now it’s costing us 40% more,” she said.
The USDA’s Emergency Food Assistance Program has partnered with food providers across the country, in addition to state agencies, to help keep shelves stocked at the local level. The USDA is investing approximately $2 billion in the country’s emergency food system in fiscal 2022, hoping to match what the department provided in 2021, a spokesman said.
“We keep seeing challenges after challenges after challenges,” said Mr. Ivey, the spokesman for the metro Detroit food bank. “And, you know, hopefully there’ll be a light at the end of the tunnel soon.”
Tesco Chairman Sees ‘Real Food Poverty’ As Cost Of Living Rises
Tesco Plc Chairman John Allan said many customers are struggling to afford to heat their homes and feed their families as the cost of living becomes unbearable for some U.K. consumers.
“There’s no doubt at all people who have never had to go to a food bank are now having to do so,” Allan said in an interview with the BBC Radio 4 Today program on Tuesday. “I think we’re seeing real food poverty for the first time in a generation.”
Allan called for a windfall tax on profits for energy producers to be paid back to those most in need of help with energy bills. He also said business rates should be reformed and reduced to help, in particular, small and medium-sized businesses who “if we’re not careful will not see out this current crisis.”
Food Delivery Apps Now Have Expansive Reach In Food Deserts
Delivery services could fill gaps in many low-income parts of the U.S. without a grocery store nearby — if they’re affordable.
Policymakers now have one more tool for addressing food insecurity, according to a new study that shows the vast majority of Americans now have access to online food delivery services.
Researchers at the Brookings Institution found that about 93% of Americans have access to either prepared foods or fresh groceries through at least one of four major online food delivery platforms, according to analysis of data shared by the companies.
That includes 90% of people living in so-called “food deserts” — low-income areas with limited access to brick-and -mortar grocery and food stores. Americans who live in food deserts have historically found it difficult to access fresh, healthy foods at affordable prices within a reasonable distance from their homes.
Delivery platforms got a big boost when the Covid-19 pandemic shut down restaurant dining and upended the service industry.
The Brookings analysis finds that the expansion of delivery services for both restaurants and grocery stores during the pandemic has created an opportunity for these platforms to aid efforts to address food insecurity.
“We can’t afford to treat this [digital food services] as something just new and shiny anymore because it’s here and I think it’s here to stay,” said Caroline George, a researcher at the Brookings Institution and a coauthor of the report. “So we have to make sure that it serves everyone in a fair way.”
Maps included in the analysis shed light on the platforms’ expansive reach and how they overlap with food deserts. Researchers collected delivery zone data from Amazon (including both Amazon Fresh and Whole Foods), Instacart, Uber Eats and Walmart.
They found that delivery options tend to be most concentrated in metropolitan areas, creating some relative disadvantage for residents in areas with lower population density.
But in some regions with very high delivery coverage — such as the Seattle-Tacoma-Bellevue metro area — the maps show that grocery apps could get fresh and prepared foods to households in need.
Yet these maps are only theoretical, the study notes. The ability to deliver food is only one piece of the puzzle, as it does not guarantee access to these services.
Affordability for lower-income customers is another issue, especially as inflation raises food prices higher. Access to a broadband connection is yet another barrier. The national rate of household broadband adoption is 86%, lower than the delivery access rate, according to the report.
Still, the massive reach of delivery platforms presents an opening for policy solutions, said Adie Tomer, coauthor of the report and researcher at Brookings Institution.
In the report, Tomer and George suggest that expanding programs allowing people with SNAP benefits to order food online — perhaps to cover any delivery fees and tips — would be one way to expand food access.
Ellen Vollinger, the SNAP director for the Food Research & Action Center, a nonprofit that works to fight against poverty-related hunger in the U.S., sees food delivery apps as an enhancement in the fight to get food in people’s hands, as long as it is coupled with other adequate resources like mobility assistance and digital access.
Vollinger is, however, against the use of funding meant for food through the SNAP programs on deliveries and tips as she considers them not enough for food.
“The food benefits should remain for that because the need is very great and there’s just no extra room in that context of benefit to start paying for delivery fees,” Vollinger said.
However, she said as more individuals get more help with their internet payments through recent federal assistance programs and have reliable digital access, they may find it worthwhile to use other parts of their household budgets to pay for delivery fees, if they have significant transportation issues.
Whatever the answers, Tomer said the question is clear: “How do we tap into those benefits to make sure that they touch all households, irrespective of income and neighborhood?”
Biden Hails US Farmers’ Efforts To Feed World Amid Price Spikes
* President Visits Family Farm As Consumer Prices Continue Spike
* U.S. Will Expand Insurance, Technology, Fertilizer Programs
President Joe Biden praised U.S. farmers as essential to curbing record-high inflation and maintaining global food supplies following Russian President Vladimir Putin’s invasion of Ukraine.
“Our farmers are helping on both fronts: reducing the price of food at home and expanding production and feeding the world,” Biden said during a visit to a family farm outside Chicago on Wednesday.
Biden announced steps aimed at curbing food inflation as new data showed that consumer price increases in April — driven by spikes in the cost of groceries — continued to exceed expectations.
The president presented US efforts to step up agricultural production as a patriotic endeavor to offset the effects of the war in Ukraine.
“American farmers are the breadbasket of democracy,” he said.
April’s consumer price index report, which rattled markets with data showing price hikes exceeding estimates, underscored the challenge facing Biden, who has seen his approval rating battered as polls show Americans hold little confidence in his ability to tame inflation.
Biden called inflation “unacceptably high” in a statement Wednesday, but put the onus for combating prices on the Federal Reserve.
Biden said he agrees with Fed Chair Jerome Powell’s assessment that inflation is the “number one threat” to the economy, adding, “I am confident the Fed will do its job with that in mind.”
Grocery prices were up 10.8% over April 2021, with meat rising 13.9% and eggs up 22.6%, in part due to an outbreak of avian flu.
The core consumer price index, which excludes food and energy, increased 0.6% from March and 6.2% from April 2021. Stocks dropped, with the S&P 500 down about 0.5% as of 2:45 p.m. in New York. Two-year Treasury note yields, which are more sensitive to changes in monetary policy, were up about 3 basis points after surging as much as 13 basis points earlier.
The White House seeks to address the growing cost of groceries with new initiatives aimed at encouraging more planting and harvesting of food. Food inflation has been exacerbated by Russia’s invasion of Ukraine, which has disrupted one of the world’s great breadbaskets, an especially important source of wheat and other grains and cooking oil.
One new measure will expand eligibility for crop insurance for farmers who plant twice on the same land in the same year.
“My administration is looking at how to extend crop insurance coverage to give financial security to farmers,” Biden said.
The administration will also make it easier for farmers to collect cost-sharing subsidies for so-called precision agriculture, in which technology is used to refine the use of irrigation, pesticides and fertilizer and improve crop yields.
And the government will double to $500 million federal spending on domestic fertilizer production, a sector experiencing supply-chain logjams.
But the farm visit also was political in tone, with Biden seeking to combat criticism over rising inflation under his watch by shifting the focus to Republican lawmakers, whom he accuses of supporting policies that benefit companies he says are responsible for high prices.
White House Press Secretary Jen Psaki compared Biden’s visit to a presidential trip last week to an Alabama Lockheed Martin Corp. plant that manufactures Javelin anti-tank missiles, which have proved vital to Ukraine’s defense.
For Biden, turning public opinion on inflation before November’s midterm elections is crucial if Democrats have any hope of maintaining their congressional majorities.
Just 36% of Americans approve of his handling of the economy and 87% say they’re concerned by inflation, according to a Fox News poll released earlier this month. But while two-thirds of Americans blame Putin for rising prices on crucial products like gasoline, 70% point at the policies of the Biden administration.
The Ukraine war and sanctions also are impacting Russia’s oil exports, while Russia and its ally Belarus are also major fertilizer suppliers.
“Putin’s war against Ukraine — it’s not just against the Ukrainian people, it’s against the world’s most vulnerable people,” Representative Jim McGovern, a Massachusetts Democrat, said after meeting with Biden at the White House on Tuesday.
“His blocking the shipment of food from Ukraine, wheat, sunflower oil, maize to get to Africa and to get to the Middle East is going to result in a hunger crisis much worse than anybody anticipated.”
Consumers in the US are less directly affected by the rising cost of grain and other crops than people in lower-income countries, as farm commodities only account for 16 cents per dollar of US grocery store retail prices, according to the US Department of Agriculture. Labor, transportation and marketing costs are big factors in US food prices.
Americans, however, have been particularly hard hit by surges in retail costs for beef and other meat, triggering Democratic allegations of profiteering against the giant packing companies that dominate meat processing in the US. Four companies slaughtered 85% of grain-fattened cattle in 2018, according to the USDA.
“Only four big companies, by the way, control more than half the markets for beef, pork and poultry,” Biden said. “Without meaningful competition, our farmers and ranchers have to pay whatever the four big retailers say.”
Meatpacking executives attribute the price increases to difficulty recruiting workers for slaughterhouses and higher transportation and feed costs for cattle and other livestock.
Tyson Foods Inc., the largest US meat company by sales, disclosed this week that it has been subpoenaed in an inquiry of its pricing practices from the office of New York Attorney General Letitia James.
Tory MP Says UK Doesn’t Need Food Banks, People Just ‘Cannot Budget’
Conservative MP Lee Anderson sparked controversy Wednesday when he said there is no need for food banks in the UK, just as Prime Minister Boris Johnson is facing calls to help voters struggling with rising food and energy bills.
“There’s not this massive use for food banks in this country,” Anderson, who represents Ashfield in the Midlands, said in Parliament during a debate on the government’s legislative program. “You’ve got generation after generation who cannot cook properly. They can’t cook a meal from scratch. They cannot budget.”
Instead, he claimed people could “cook meals from scratch” for “30p a day”.
Johnson’s government has been beset by political problems over food poverty, twice reversing a planned cut to children’s meal provisions after a campaign by professional soccer star Marcus Rashford.
Britain’s biggest food bank network, the Trussell Trust, gave away almost 2.2 million emergency parcels in the past year. Orla Delargy of the food charity Sustain has said there’s been a 57% increase in food poverty in just the last three months.
Food poverty campaigner Jack Monroe took to Twitter to attack Anderson’s comments. “You can’t cook meals from scratch with nothing. You can’t buy cheap food with nothing,” she wrote. “The issue is not ‘skills,’ it’s 12 years of Conservative cuts to social support.”
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