The shortages could become so profound that the continent will be on the verge of experiencing a food crisis in the coming months, according to a report published Tuesday.
"Energy crises impact nearly every aspect of our lives, and that is particularly true of food markets, with food production next year expected to be severely threatened," reported industry news site OilPrice.com, before explaining why food production will be affected.
"About 70 percent of the cost of fertilizer production is solely the price of natural gas, and as the price of energy soars, the cost of making and moving food is increasing alongside it," the report's summary noted further. "At the same time, Russia’s invasion of Ukraine and threats from Putin that Russia may alter grain export routes have only added to uncertainty in food markets."
An energy crisis is really "an everything crisis" since modern economies literally run on fossil fuels and, to a far lesser extent other 'green' forms of energy -- without it, economies fail, and when that happens, food production grinds to a halt. Worse, hungry populations become very agitated very quickly, and governments have a hard time keeping the calm and quelling the violence.
The report went on to say that people around the world have already been experiencing the effects of energy shortages for the past two years via inflation, but as the energy situation became more dire in the wake of Russia's invasion and Joe Biden's war on American energy production, inflation has skyrocketed. In fact, in the U.S., government data released this week showed that core inflation rose again in August, and overall inflation remains above 8.5 percent.
The report also noted that the global agricultural industry, especially in Europe and the U.S., has been warning of coming food shortages for months, mostly tied to dropoffs in oil and natural gas exports. The industry has said that food production next year will be severely impacted -- even to the point that there will be major shortages, at which point countries that normally export a large amount of food will likely make the decision to keep what they produce for themselves, which makes the most sense.
OilPrice.com adds there is also a war on fertilizer production:
Industrial NPK fertilizers (so named for their makeup of nitrogen, phosphorus, and potassium oxide), are heavily reliant on natural gas supplies. About 70 percent of the cost of fertilizer production is solely the price of natural gas, which is used in liberal amounts to make the ammonia phosphate slurries that turn into fertilizer. Indeed, according to CRU Group, European fertilizer producers in the region are currently losing approximately $2,000 for every ton of ammonia produced. So as Russia has stemmed and then indefinitely stopped the flow of natural gas into Europe, sending gas prices through the roof, the continent’s fertilizer sector has halted as much as 70 percent of its production capacity.
"This is an enormously scary figure. Commercial fertilizer plays an essential role in 40 to 60 percent of the world's food production. Unless you’re growing your own food or buying from a patchouli-scented co-op, it’s likely that most of your food staples are entirely reliant on NPK," the report added.
Worse, Russia and Ukraine account for the lion's share of grain exports to regions like sub-Saharan Africa, and with the ongoing war, grain production has been impacted as have grain exports. Even if the war ended today -- and it hasn't -- there are going to be significant shortages of grain and other foodstuffs that are normally produced in that part of the world for at least another year.
The world is about to enter an extremely dangerous phase: Hungry people will revolt, which could fan the flames of World War III.
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