“You don’t have to be a prophet or a psychic to see the future. All you have to be is an average observer and notice bare grocery shelves to know food shortages are coming.”

— Jarod Kintz

 

Dear Reader,

Our topic this week: Food shortages.

In the West, we’re so accustomed to aisles full of abundant choices, it’s hard to imagine a food shortage. We got a glimpse of what empty shelves look like during the pandemic, though, didn’t we?

Still, we can’t help but wonder what would and could cause a food shortage in our time…

From yesterday’s Daily Proof:

The German Foreign Minister has declared that “sanctions against Russia will only be lifted after a complete withdrawal of its troops from Ukrainian territory.” Well, there’s no way Russia is withdrawing entirely from Ukraine. They have built a land bridge from Russia to Crimea at a high cost and are not giving it up.

This means the sanctions will never be lifted (unless the official policy changes). It also means there will be enormous destruction to global supply chains and possible mass starvation by late this year due to the ban on Russian exports of wheat and other grains and the impossibility of exports from Ukraine.

While you’re reallocating your portfolio to account for this new reality, you may want to buy an extra freezer and stock up on beef, chicken and frozen vegetables. The food shortages are coming.

Chock it up to war, inflation, supply chain disruption… all of these things are, umn, happening. But there’s also a shift in policy that is causing a disruption: “government” pushing its will rather than trying to solve problems.

We noticed a short bit of political wrangling in the news this week that could impact the delivery of fertilizer to farmers during the spring planting season.

“Union Pacific informed CFI,” reads a nugget in Michigan Farm News, “without advance notice, that it was mandating approximately 30 shippers, including CFI, to reduce the volume of private cars on its railroad effective immediately. CFI was told to reduce its shipments by nearly 20%.”

CFI is the largest producer of urea, UAN and DEF – all necessary types of fertilizer – in North America.

“The timing of Union Pacific’s announcement couldn’t come at a worse time for farmers,” Tony Will, president and CEO of CFI, says.

To the uniformed observer, Union Pacific’s announcement sounds like a private dispute between private companies. Fair enough, but for the fact that CFI “intends to engage directly with the federal government to ask that fertilizer shipments be prioritized so that spring planting is not adversely impacted.”

Details of the dispute read like a long chapter torn from the pages of Atlas Shrugged. A rail company issuing new regs on private use of its rail lines. The offended company petitioning the Secretary of Agriculture for redress. Secretary Tom Vilsack then gets to apply Green New Deal policy to adjudicate the dispute.

“US food security is under threat as never before since the 1930s Dust Bowl,” writes F. William Engdahl on the current state of food supply chain issues, “and the Biden Administration Green Agenda is doing everything to make the impact worse for its citizens.In recent comments US President Biden“remarked without elaborating that the US food shortages are ‘going to be real’.”

Engdahl continues:

The Biden administration… is deaf to pleas of farmer organizations to allow cultivation of some 4 million acres of farmland ordered left out of cultivation for “environmental reasons. However this is not the only part of the world where the crisis in food is developing.

These deliberate Washington actions are taking place at a time when a global series of food disasters create the worst food supply situation in decades, perhaps since the end of World War II.

We don’t pretend to know the details of the dispute between CFI and Union Pacific or the conclave of bureaucrats that’s sequestered in some court somewhere to forge a deal. We don’t pretend to know the motives of the German Foreign Minister.

We’d still like to know how food shortages are a topic of concern in our day and age.

Frankly, scratch that…We’ve always been suspicious of the phrase “in our day and age” because the history books are replete with political policies, decisions, decrees, rules, regulations, fees, fines, taxes, permits, bribes, coercion, corruption… there’s probably at least one word for every letter of the alphabet that would apply.

How do food shortages happen? The details matter. Therein also lie the opportunities. That’s why we are talking to Mark Rossano this week, click here for his analysis that predates the war, the pandemic, floods and famine.

Follow your bliss,

Addison Wiggin
Founder, The Wiggin Sessions

P.S. “This was a fantastic interview,” Eric writes, referring to Matt Piepenburg from last week, “Have him back in a couple months.”

Alas…

“The only thing to take issue with is his view of ‘cash’. Sure, 100k or more sitting in a bank is losing it’s purchasing power. But, for the moment anyway, it is protecting one from the 50-60-70% meltdown he cautions against.

“Cash sits waiting cautiously and then may be aggressively deployed to pick up way-undervalued assets once the capitulation and despondency take hold at the bottom of the cycle.

“We are not there yet. Panic has not set in, but fear certainly has and capitulation can’t be far behind. Holding cash now will provide some incredible opportunities at some point that will make the temporary loss of purchasing power melt away.

“At least that is my theory.”

Cash in hand, when stocks are cheap? That’s not a bad theory.

But it’s worth paying attention to which sectors are going to be leading the way out of any kind of mayhem caused by headline narratives. If techs are getting hammered, crypto with them, maybe energy and commodities will lead the way out of the volatility.