Even with dementia I doubt seriously Joe Biden believes the nonsense he read from his prepared script today.  Every economy policy the Biden administration has triggered, specifically including the Green New Deal energy policy, has caused massive inflation.

The national average price per gallon of gasoline was $2.33 in January 2021, according to the U.S. Energy Information Administration (EIA). It has increased nearly 84% when compared to the current national average price of $4.28 per gallon {link}.  Petroleum and refined gasoline costs are embedded in every aspect of the production economy.  Additionally, Biden’s restrictions, and later policies, on natural gas and coal have caused overall energy costs to skyrocket. Again, these are cornerstones of economic inflation.

During a ridiculously obtuse speech today [Full Speech Here], part of which is in the excerpt below, Biden claims there are only two sources of inflation: (1) the pandemic (covid-19); and (2) Russia’s invasion of Ukraine.  I often accuse democrats of pretending not to know things, however these false attributions are far beyond pretense, they are purposeful lies. WATCH:

Beyond the claims about inflation, a visible pile of bovine excrement is noted in the sentences around Ukraine grain supplies.  Notice there is no supply chain issue pushing thousands of tons of military hardware into Ukraine; however, Biden claims they cannot get grain supplies out of Ukraine.  He cannot even see the hypocrisy in his own script.

Sending more than $50 billion in U.S. taxpayer money to Ukraine while those same U.S. taxpayers are crushed under the weight of the inflation that type of spending creates, is beyond blood-boiling.  We are currently in an abusive relationship with our own government and Joe Biden is the cognitively challenged, disposable front man sent to the cameras to gaslight the American people.

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As CTH has noted since last October the rapid increases in fertilizer costs could potentially create a major issue for global food supplies later this summer.  As the farming costs continue escalating, including fertilizer and diesel fuel prices, this will eventually lead to major price increases on the harvests.   Field to fork inflation is looking increasingly severe later this year; what we have called the third wave of inflation.

Beyond prices, a primary impact in the U.S. market, concerns are now escalating about grain shortages {SEE HERE} and lower European crop yields which will lead to less food products on a global basis.   According to information shared by ZeroHedge, “We think it will take at least 2-3 years to replenish global grains stocks,” Illinois-based CF Industries Holdings Inc.’s president and chief executive officer Tony Will said in a statement in Wednesday’s earnings report.”

Axios is reporting on the continued escalation of fertilizer prices; however, they conveniently and purposefully avoid noting the origin of the problem in North America is directly the result of Joe Biden’s immediate energy policies that drove up the costs of natural gas (a critical component):

AXIOS – “Skyrocketing fertilizer costs — like those made from nitrogen, phosphorus and potassium (NPK) — are driving up food prices and, worse, threatening food security around the globe.

State of play: Prices for NPK were up 125% in January from a year before, and rose another 17% from the beginning of the year to March, according to data compiled by the International Food Policy Research Institute (IFPRI).

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This is an update to an ongoing issue we started seriously discussing last October when it became clear that if the trajectory was followed, “the absence of food will change things.”

The International Monetary Fund (IMF) is continuing to send warnings with increased urgency about the very real possibility of widespread food shortages in regions where food instability is a historic issue. [SEE HERE]

“The war in Ukraine has triggered a sharp increase in energy and food prices that could undermine food security in the region, raise poverty rates, worsen income inequality, and possibly lead to social unrest,” the Fund said in its annual Regional Outlook for Africa.”

This is a recent warning around a topic that has increasingly gained international attention.  Indeed, experts in multiple related agricultural fields have openly started to discuss and predict a looming crisis as the majority of the global food supply is contingent on only one or two growing cycles per year for harvest.  Those harvests are facing multiple headwinds that could likely result in lower yields.

Against this backdrop we can be certain that all nation’s government interests are taking this issue seriously.  Now, we are starting to see a race for supply control by various governments.

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Goya Foods CEO Bob Unanu appeared on Fox Business earlier today in order to give a bigger picture review of the current status of food production. Unanu does a good job outlining how the interconnected systems from field to fork impact consumers.  The Goya CEO appropriately outlines what is happening and what the consequences are from Biden energy policy.  It’s a good interview.

Unanu does not push food alarmism and accurately states the U.S. food production system will ensure that food is available for U.S. consumers to purchase, albeit at higher prices.  The people most at risk from food insecurity are developing countries who rely on exports of food products generated by efficient, productive and exceptional farming operations in North America that feed the world.

For U.S. consumers it is the massive increases in energy and transportation costs that are driving up food prices, putting the issue of food insecurity into the correct context of food affordability.   WATCH:

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Consumers can offset the price impacts by shopping closer to the field, the origin of the food purchases needed.  Shopping for fresh food products at farmers markets avoids feeling the impact of shipping and transportation costs, and it helps the local economy.  If you are near areas with farm production in the United States consider the financial value of skipping the convenience of the supermarket in favor of shopping closer to the field.

In the field to fork food supply and distribution system, the closer you can get to the field for purchases the less costs you will encounter.  Obviously, for many people this may not be possible.  However, for others it might be time to evaluate the cost of convenience.

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Several people have written to inquire about recent stories surrounding a wave of industrial accidents at food processing plants all over the U.S.  {Zero Hedge Article} {Twitter Questions, Suspicions} {List from Western Standard}

Indeed, there has been a significant increase in fires and explosions from furnaces, industrial fryers, boilers and some other rather odd incidents with aircraft hitting food processing.  The frequency even gathered attention from Fox News host Tucker Carlson.  WATCH:

Addressing the lesser frequent impact incidents from airplanes etc.  Keep in mind that major industrial food processing facilities are generally located around major transportation hubs – large arteries for commercial trucking and railway lines for inbound good deliveries.  These are the same zoned commercial regions where you find small regional airports.

So, let’s put those airplane ‘accidents” aside for a moment and look at the bigger picture.

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Robert Lighthizer was the U.S. Trade Representative (USTR) under the Trump administration.  Lighthizer was exceptionally strong in developing and structuring the America First trade policy that included the effective use of tariffs to get fair trade outcomes.

In this video Ambassador Lighthizer discusses the current trade policy of the Biden administration with former National Economic Council Chair Larry Kudlow.  The discussion centers around U.S-China trade policy, the phase-1 trade deal that was interrupted by the pandemic, and the future of the existing trade tariffs against Beijing that Biden is reportedly going to remove.  WATCH:

As noted by Lighthizer, if Biden drops the Chinese tariffs, it will only make the trade imbalance worse and push the U.S. deeper into the cycle of lost jobs and economic contraction.  He’s correct.

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This is layers of odd.  As many readers are aware, the prices of fertilizer have skyrocketed as supplies have been heavily impacted by increased energy costs and supply chain issues.  Many people have worried if a shortage of fertilizer may impact farm yields this year.

Against this backdrop CF Industries, one of the world’s largest manufacturers of hydrogen and nitrogen fertilizer, is warning its customers that Union Pacific Railway Lines is now restricting the amount of container tonnage they will permit.  [Press Release Here]

CF Industries Holdings, Inc. (NYSE: CF), a leading global manufacturer of hydrogen and nitrogen products, today informed customers it serves by Union Pacific rail lines that railroad-mandated shipping reductions would result in nitrogen fertilizer shipment delays during the spring application season and that it would be unable to accept new rail sales involving Union Pacific for the foreseeable future. The Company understands that it is one of only 30 companies to face these restrictions.

CF Industries ships to customers via Union Pacific rail lines primarily from its Donaldsonville Complex in Louisiana and its Port Neal Complex in Iowa. The rail lines serve key agricultural areas such as Iowa, Illinois, Kansas, Nebraska, Texas and California.

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The UN Food and Agriculture Organization reported on Friday they are recording the highest Food Price Index since they started recording thirty years ago. With record highs in prices for cereals, vegetable oils, dairy and meats

This issue has been a slow burning fuse toward the biggest powder keg in modern history, and it is about to get very serious.  We have been warning about it since last fall {Go Deep}.  In the most deliberate and painstaking ways possible, we have been urging everyone to take this issue seriously.

The background cause is complex and started with the 2020 government response to the pandemic.  U.S. and international government intervention in the food supply process has been FUBAR from the beginning. Every action taken since early 2020 has been one bad policy after another; building failure upon failure, crisis upon crisis, bad decision upon bad decision, bringing us to a precipice summed up by saying “the absence of food will change things.”

Some will say the food prices we are about to experience –and the crisis it will create– was deliberate.  Others will say this was the cumulative outcome of major failures on the part of the government.  At this point the former makes more sense, and the latter looks like a justification and excuse, because if government entities were really serious about food prices and shortages, they would be taking pragmatic steps to mitigate the problem; they are not.

There are simple things government could do, such as helping farmers offset targeted fertilizer costs, providing relief for diesel fuel and energy costs, and taking other simple steps that would help the agricultural industry.

Instead of responding with the urgency this would demand, the collective government action has been to ignore the problem (talk soundbites), and give speeches about using subsidies to offset the end result (consumers) – without ever addressing the root cause.  All this while fueling conflict in Ukraine and chasing radical energy policies under the guise of global climate change.

The UN Food and Agriculture Organization (UNFAO) keeps track of food prices and projections using a global index [SEE HERE].  What they are calculating, and what they are projecting based on the current calculations, is a major increase in food prices combined with a major increase in food scarcity due to the unaffordability of food products.

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I have stated for the past year ‘the absence of food will change things‘.   The inflation and food affordability crisis has now surfaced in Sri Lanka. Global media is paying attention, even sending out warnings about what this might represent for other nations.

Sri Lanka has a debt to GDP ratio of 120%, approximately the same as the United States.  However, Sri Lanka does not have the benefit of their currency being supported as the global trade currency; therefore, the debt and domestic inflation rate are directly tied together.

The rate of food inflation in March has exceeded 30%…. the absence of the public being able to afford food has now surfaced and the government is collapsing.  Read the news from Sri Lanka through the prism of what could happen in U.S. cities if we lose the dollar as the global trade currency.

(Via Reuters) – Reuters Breakingviews) – Sri Lanka’s collapse is front of mind for many. Protesters fed up with crippling shortages of essential food and fuel items are on the streets, prompting multiple members of Prime Minister Mahinda Rajapaksa’s cabinet to offer to resign late on Sunday.

Social unrest will probably accelerate a restructuring of some $44 billion of international sovereign debt. Though Sri Lanka’s problems follow years of mismanagement, its speedy unravelling is a warning to sturdier economies from Europe to Asia suddenly grappling with a spike in the cost of living.

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Again, they are blaming this on the Ukraine-Russia conflict, but the origin of the issue goes back much further.

Last year, CTH was one of a small number of people talking about the very real possibility of food shortages due to the cumulative effects from regulatory COVID mitigation and the fracturing of the food supply chain that government intervention created. {Go Deep}

What we are witnessing now is not as much attached to the Ukraine crisis, as it is the continued ripple effects in that same supply chain.

The current grain issues are an outcome of a major supply chain disruption on the manufactured and processed food side, which is now exacerbated by higher replenishment costs and lower yields. Fertilizer costs have skyrocketed due to energy cost increases.

It is a perfect storm.

Without the Ukraine crisis surfacing, the grain (wheat, corn, soybean) and supply chain issues were already going to be a problem, and many of these current mitigation efforts -wrongly being attributed to Ukraine- would have taken placed without any regional conflict.  That’s why we predicted these issues last year, long before Ukraine-Russia was in the headlines.

The thing to keep in mind is that some smart governments, especially those nations where the government controls and monitors the food industry, can see these issues long before they surface.  If CTH could see these multinational food issues last year, you know the governments of China and Russia could also see them coming.  Some might even argue they gamed out the problem and are taking advantage of it right now. {Go Deep}

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