For decades, Americans have been blessed with a bountiful supply of food. Our local supermarkets are bursting from the many varieties of cereals, meats, fish, fruits, vegetables, and snacks sold there. Grapes and watermelon are available in the winter, and oranges and cabbage in the summer. These days people of even very modest means have access to more and better-quality food than royalty did less than a century ago. Virtually any food we want is available, at any time, and nearby.
That’s wonderful, but is all of this plenty that we’ve come to take for granted in the process of changing? Still worse, could America even be facing a shortage of certain foods in the months ahead?
These questions may sound preposterous but they’re not. Many strange things have been happening on our farms, and none of them is good. And it’s not only US farms that are experiencing unusual events: they are happening all around the world.
Recent headlines make this very clear. Here are just a few:
*Last March, in Nebraska alone, more than a million calves were lost to flooding.
*Many millions of acres on US farms were essentially turned into mud because of the nearly nonstop rains.
*Many thousands of American farmers have been forced out of business because of torrential rains.
So just much rain has fallen in America’s heartland? The 12-month period ending in April was the wettest in US history, and the region has been battered by many more storms in the weeks since then. Bloomberg said there has never been a year like this before, and summed up the situation this way: “Rivers topped their banks. Levees were breached. Fields filled with water and mud. And it still kept raining.”
At least six million acres used for planting corn will go unused this year, an unprecedented number. The corn crop has been battered, but soybeans are doing even worse. Planting of corn is 30.2% below where it should be at this time of the year. However, planting of soybeans is 50.6% below where it should be at this time of the year.
And the farms that are planting are faced with the herculean task of coping with all the water. The owner of one Nebraska farm said that conditions are so bad “it’s like trying to plant on a lake.”
Some headlines coming out of the farm states explain how difficult these conditions are:
*“It will take years to recover losses from the current rains.”
*Producers worry about a shortage of feed and bedding come fall.”
*Vegetable prices are rising at the fastest pace in three years.”
In late June there were more storms in the region, with some of them dropping as much as five inches of rain.
It’s not just US farms experiencing these problems; extreme weather events are causing terrible destruction to crops all around the world. Australia, for example, has been suffering from the worst drought in 116 years, forcing that country to import wheat for the first time in 12 years; last year Australia was the world’s fifth largest exporter of wheat.
In the last year there have been significant crop failures in Italy, France, Mexico, and Argentina. There was a massive rice crop failure in the Philippines. North Korea is suffering from an intense drought, which the UN says is creating an “enormous” shortage of food
In other countries, African swine fever has been decimating the global pig population in China and other countries in Asia; it’s estimated that in China alone at least 200 million hogs will die from that disease this year — more pigs than the US pork industry produces in an entire year. In other words, much of the food chain is experiencing problems.
These unusual events have resulted in a very high financial (and emotional) cost to farmers, and going forward all of us will feel their pain in the form of much higher food prices. In recent months farm bankruptcies have been skyrocketing, and some experts are concerned that the price of food could soar.
Zero Hedge and other websites have said that all of us will be paying higher prices for less food, and that there’s the potential “for a full-blown food crisis in the near future.” Companies that sell farm-related merchandise including seed, fertilizer, machinery, land, fuel and related items are also feeling the pinch now, and when conditions improve they may try to recoup lost profits by raising prices.
All of this is scary stuff, but the really scary part would come if the nightmare scenario unfolds and a full-blown food shortage develops. Hopefully that will never happen.
If weather conditions go back to normal, soon the recent rains will be a huge bump in the road but not more than that. On the other hand, so many unusual food-related events have been occurring around the world that investors and everyone else would be wise to keep a close watch on what happens next.
The bottom line: This story could still have a happy ending, or it could turn into the nightmare some believe has already started to unfold. Even at this point in the planting season no one knows for sure. Storm clouds are gathering, but that doesn’t mean a hurricane is about to hit.
By Gerald Harris
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