{"id":1600304,"date":"2022-08-11T07:34:17","date_gmt":"2022-08-11T11:34:17","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1600304"},"modified":"2022-08-11T07:34:57","modified_gmt":"2022-08-11T11:34:57","slug":"what-the-ukraine-war-revealed-about-the-worlds-fragile-food-supply-chains","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/what-the-ukraine-war-revealed-about-the-worlds-fragile-food-supply-chains\/","title":{"rendered":"What The Ukraine War Revealed About The World\u2019s Fragile Food Supply Chains"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fwhat-the-ukraine-war-revealed-about-the-worlds-fragile-food-supply-chains%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1600304&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>Since 2019, there have been three black swan events of historical significance in the global agricultural commodity market: <a href=\"https:\/\/www.frontiersin.org\/articles\/10.3389\/fvets.2022.828498\/full\">African Swine Fever in China<\/a>, Covid-19, and the Russian invasion of Ukraine. Each has altered market dynamics, trade flows, and food production in unprecedented ways. Some economists suggest that this tumult could lead to a <a href=\"https:\/\/www.washingtonpost.com\/business\/inflation-is-raging-because-globalization-is-fading\/2022\/07\/10\/04fd7d04-0051-11ed-8beb-2b4e481b1500_story.html\">pullback in globalization<\/a>. We anticipate a globalization reset instead, where friends and allies work more closely together to ensure a stable food supply. Let\u2019s look at a few data points to see why.<\/p>\n<p>At the top of this list is China\u2019s ongoing recovery from African Swine Fever, which initially led to the country losing nearly <a href=\"https:\/\/www.nature.com\/articles\/s43016-021-00362-1\">7 percent of its hog population<\/a> and resulted in China quickly becoming the <a href=\"https:\/\/www.reuters.com\/markets\/asia\/chinas-grain-pork-sugar-imports-december-2022-01-18\/\">largest corn importing nation on Earth<\/a>. This happened when they chose to start feeding pigs corn instead of \u201cswill\u201d or food scraps to reduce disease. China\u2019s sudden and completely unprecedented demand for more than 25 million metric tons of corn from the world market was the initial force that altered global supply and demand fundamentals.<\/p>\n<p>China was hamstrung by a limited global corn supply with options to buy from Ukraine, Brazil, and the United States. Brazil wasn\u2019t tenable because of China\u2019s already large dependence on their soybeans, and the United States looked even worse because of the ongoing trade war between the two countries. So China diversified but ended up buying lots of corn from Ukraine, which was successful until Vladimir Putin waged war on the Ukrainians in February of 2022.<\/p>\n<p>Many people assume Russia\u2019s war on Ukraine was the beginning of the food shortfalls. That assumption is incorrect. The war intensified and exacerbated several problems that existed before the invasion began.<\/p>\n<p>For example, <a href=\"https:\/\/www.nationalgeographic.com\/environment\/article\/global-food-crisis-looms-as-fertilizer-supplies-dwindle\">fertilizer prices<\/a> skyrocketed this year, mainly because Russia and Ukraine export 28 percent of the nitrogen, phosphorous, and potassium fertilizer used globally. However, it was China that made the first decision to <a href=\"https:\/\/www.reuters.com\/article\/us-china-exports-fertilisers\/chinas-major-fertiliser-makers-to-suspend-exports-amid-tight-supplies-idUSKBN2F007W\">stop exporting phosphate fertilizers<\/a> last summer as they recovered from Covid-19. China accounts for 27 percent of the world\u2019s production of nitrogen, 39 percent of phosphorus, and 13 percent of potash. So, the war compounded the effects that Covid-19 had already set into motion.<\/p>\n<p>The same can be said of our original storyline. Shortfalls in corn production are compounded by the removal of Ukraine\u2019s production, but they started when China\u2019s demand spiked in 2019.<\/p>\n<p>Wheat shortfalls have been a particular focus since the war began, and rightfully so. However, the absence of Russian and Ukrainian wheat is not the only choke point. China\u2019s minister of agriculture and rural affairs said that their wheat production could be down by as much as a third this year due mainly to environmental factors that further compound the global problem. \u00a0<\/p>\n<p>These three events demonstrate the significant volatility and interdependence of today\u2019s commodity markets both before and even more so since Putin attacked Ukraine. What does this all mean, and how are countries likely to respond to these three black swan events?<\/p>\n<p>First, we believe there is little evidence that a \u201cself-sufficiency\u201d model will work to secure supply for any single country. <a href=\"https:\/\/www.trade.gov\/country-commercial-guides\/israel-agriculture\">Israel<\/a>, as an example, has been pursuing this strategy with limited success. Most countries do not have the available, high-quality soil needed to become self-sufficient, nor do they have the know-how and capital needed to build such a program. Thus, most of the world\u2019s countries will continue to look to international markets to feed their people.<\/p>\n<p>Secondly, higher-income countries will start to consider food security as national security, leading them to make wiser procurement choices. We anticipate some \u201cdecoupling\u201d of economies as politicians look to source crops and proteins closer to home and more frequently with allies than adversaries. As an example of this, instead of China living up to its commitments in Phase I of the trade deal, they have chosen to purchase more corn from Brazil instead of the U.S. as they seek to fill the missing supply from Ukraine.<\/p>\n<p>Finally, there will be increased scrutiny on foreign investment in domestic agriculture. This tide is coming and will be particularly acute in the U.S., where foreign entities own everything from our largest pork processing company to vast swaths of agricultural land, our fourth largest meat packer, and one of the largest seed and chemical companies. <\/p>\n<p>The Committee on the Foreign Investment in the U.S. should, and likely will, ramp up scrutiny on these investments going forward. The United States should also take this opportunity to invest in domestic chemical and fertilizer production to eliminate our dependence on Russia, China, and Belarus.<\/p>\n<p>As higher-income countries seek to secure their food supplies and lower-income countries become more dependent on food aid programs, these changing dynamics will reduce globalization as we know it. <\/p>\n<hr class=\"wp-block-separator\" \/>\n<p>\n  Luke J. Lindberg is a Senior Fellow with the America First Policy Institute. Ambassador Kip Tom is the former U.S. Ambassador to the United Nations Agencies for Food and Agriculture<\/p>\n<div class=\"article-comments mt-30 mt-sm-60\">\n<div class=\"article-comments-container d-flex flex-column align-items-center py-30\">\n    <img loading=\"lazy\" decoding=\"async\" width=\"110\" height=\"106\" src=\"https:\/\/thefederalist.com\/wp-content\/uploads\/2021\/12\/fdrlst-mark.svg\" class=\"img-fluid mb-20\" alt=\"The Federalist logo eagle mark\" \/>    <\/p>\n<p>Unlock commenting by joining the Federalist Community.<\/p>\n<p>    <a href=\"https:\/\/thefederalist.com\/plans\/pricing\/\" class=\"btn btn-on-white\">Subscribe<\/a>  <\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Since 2019, there have been three black swan events of historical significance in the global agricultural commodity market: African Swine Fever in China, Covid-19, and the Russian invasion of Ukraine.<\/p>\n","protected":false},"author":1238,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1600304","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1600304","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1238"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1600304"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1600304\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1600304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1600304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1600304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}