Table of Contents
Recommendation
The pandemic, Russia’s invasion of Ukraine and climate change have conspired to create a far-reaching, long-lasting global food crisis, according to a team of Business Insider reporters who investigated conditions in 13 locations worldwide for this daunting, admirable series of reports. In short, they explain the factors that disrupted supply chains and caused shortages in fertilizer, as well as grains and other staples. Climate change also has increased food-system vulnerability, reducing crop yields and affecting livestock and fisheries. Although the global food crisis especially affects developing nations and low-income people everywhere, everyone should be concerned because it could ravage regional economies and cause social unrest.
Take-Aways
- Rising fertilizer prices, especially in Africa, add to the global food crisis.
- US beef prices are high and will continue to be elevated.
- Salmon shortages are causing a “sushi crisis” in Japan.
Summary
Rising fertilizer prices, especially in Africa, add to the global food crisis.
Around half of the people in the world today are alive because more than half a century ago synthetic fertilizers dramatically increased agricultural production. Now, the war in Ukraine and other factors have raised the prices of crucial fertilizers. Without fertilizers, farmers can’t grow enough food. Over the course of 2021 and 2022, fertilizer prices went up some 80%, putting financial pressure on farmers and consumers.
“There are as many culprits behind the fertilizer mess as there are heirloom vegetables at a roadside farm stand: Higher energy costs — for oil, coal and natural gas, which is used to make nitrogen fertilizers — are one. Then, add in global supply shocks resulting from poor weather and the war in Ukraine.”
Africa is the region most affected by fertilizer shortages and prices. Countries like Ethiopia and Kenya face crop failures due to drought, and farmers elsewhere in Africa can’t afford adequate fertilizer. Some have found ways to mitigate the problem. For instance, one farmer in Kenya planted soybean and maize crops close together and applied manure just to feed the roots. Farmers can afford to apply fertilizer only where it has the most impact. Such cost-saving approaches may work for small, family farms, but they aren’t sufficient to produce the food necessary for an increasing global population. However, India, Brunei and Nigeria plan new nitrogen fertilizer production which may provide some relief.
Food prices in Nigeria have surged upward, and with people buying less, shop owners earn less and buy fewer goods. For example, “Jollof rice” is a traditional Nigerian staple using rice, vegetables, and meat or fish – the kind of dish your mother might make for a special occasion. But, by mid-2022, the price of making jollof rice soared 8.3%.
“If you worry about domestic politics, if you worry about environmental matters, if you worry about immigration matters, if you worry about diplomacy in the military, you should be paying attention to the food crisis, because it is lurking in the background, pushing those things.” (economist Chris Barrett, Cornell University food policy expert)
This problem may have no fast, easy solution. Nigeria has severe supply chain problems, including transportation insecurity, poor irrigation and bad roads. Food price inflation has been double-digit for close to ten years. Recent food inflation ran as high as 19.5%. Unless energy prices go down, the Ukraine war ends, and the global economy stabilizes, food price inflation may remain high. Ordinary people are adapting by focusing on staples and simply not buying or eating as much food.
US beef prices are high and will continue to be elevated.
By spring 2022, driven by drought, labor shortages and fuel prices, US beef prices were up between 16.7% and 25.4%. Years of drought have made it costly to feed cattle. In response, ranchers often have cut their herd size – contracting supply and driving up prices. The US Department of Agriculture (USDA) expected beef production to fall 7% in 2023.
“Drought is steering the beef market toward a future where prices might stay elevated for years. Withered grass and high grain-feed prices are making it more economical for ranchers to cull their herds than feed them. That means the number of cattle in the US is declining and there will probably be less beef.”
Predicting how long the droughts will last isn’t possible. The rise in global temperatures increases the frequency of drought, and that’s not the only problem affecting beef production. In Kansas, 2,000 cattle died in a heat wave. Wildfires have destroyed thousands of acres of grass. In addition, the labor and transportation costs of getting beef from the slaughterhouse to the grocery store also can drive up prices. Only an end to the drought and a drop in costs could mitigate “upward pressure” on beef prices.
Salmon shortages are causing a “sushi crisis” in Japan.
Japan faces a sushi crisis due to salmon and salmon roe shortages and high costs. Japan uses mostly farmed Atlantic salmon from Chili (70%, generally frozen), Norway (20%) or Russia (10%). After Russia’s invasion of Ukraine, Russia restricted its airspace, so salmon going from Norway to Japan has to fly via Dubai. The flights are longer, less frequent and more expensive, and the fish is less fresh when it arrives. Japan’s imported salmon prices are up 30%.
Japan is using a “hatching and stocking” program to increase its salmon population, but that takes years to come to fruition. At its peak in the 1990s, Japan’s national catch was around 80 million fish, up from 20 million in the 1970s, but it declined sharply in the 2010s. Authorities aren’t certain why the salmon population has dropped, but it could be due to climate change’s impact on the marine environment.
About the Authors
Jeremy Meek, Fati Abubakar, Andri Tambunan, Junya Inagaki, Octavio Jones, Tim Paradis, Morgan McFall-Johnson, Ayelet Sheffrey and Emmanuel Abara Benson covered elements of the food crisis in California, Florida, Nigeria, South Africa, the United Kingdom, Spain, Germany, the Netherlands, India, Japan and Singapore for Business Insider.