[HN Gopher] Missing wheat from the war is less than 1% of global...
___________________________________________________________________
Missing wheat from the war is less than 1% of global wheat crop
Author : mooreds
Score : 185 points
Date : 2022-03-31 13:56 UTC (9 hours ago)
(HTM) web link (twitter.com)
(TXT) w3m dump (twitter.com)
| shagmin wrote:
| This doesn't address how inelastic wheat demand is, and that
| value < 1% can still be a massive amount of wheat.
| paxys wrote:
| > FWIW: Anytime you see a shocking datapoint bouncing around in
| the news, it got there because one person actually looked at the
| data ONE TIME.
|
| > But there's no guarantee OP actually knew what it means! And
| the folks repeating it definitely don't know. : /
|
| I wish everyone took this to heart.
| aaron695 wrote:
| stuckinhell wrote:
| There are three types of lies. Lies, Damned Lies, and Statistics.
|
| We've had enough food to feed the world for years and years. We
| have a supply chain and corruption problem.
|
| Also in world undergoing deglobalization/realignment, we don't
| know if super wheat producers like China or India will be willing
| to export their supplies.
|
| I think people are absolutely right to worry about commodities
| during this realignment to a multi-polar world. A lot of old
| assumptions about what countries will or won't do are not
| accurate any more. Just look at how the BRICS nations have
| ignored US sanctions on Russia.
| adolgert wrote:
| Famine is caused by _local_ supply shortages. The Dust Bowl in
| the US was a 30% wheat shortage, but it can happen from even less
| shortfall if transportation is a problem. The US weaponized wheat
| stem rust against Russia's wheat crops during the cold war, and
| they were hoping the weapon would reduce total yield by 15% in
| order to cause major damage.
| onenukecourse wrote:
| Some thoughts:
|
| 1. Costs are at the margins. Is 1% irrelevant, or cannot be
| replaced? Replacement depends strongly on local weather and
| requires that land be substituted for wheat instead of other
| things.
|
| 2. Global production is 778 million, but Russia produces 74
| million, Ukraine 28 million and landlocked (by Russia) Kazakstan
| 11.3 million, or a total of 113, or about 15% of total production
| [1] . This is the wheat Russia effectively controls. True, not
| all of that is exported, but I doubt Russia with 2% of the
| world's population eats 15% of the world's grain. I'd really like
| to see the source of her export figures (is dollar denominated
| exports? Total exports? Wheat of a certain type? Etc).
|
| 3. Food needs the following inputs:
|
| - Ammonia
|
| - Potash
|
| - Phosphorous
|
| - Diesel
|
| - Propane (in the US to dry the grain in remote farms)
|
| - man power.
|
| All of those input costs are going through the roof, and Russia
| effectively controls more than half of those inputs:
|
| - Ammonia: The Russians are a top exporter and they export the
| NH4 EU needs to make more
|
| - Potash: Canada is the top exporter followed by... Belorussia
| and Russia
|
| - Phosphorous: China, I believe is the top producer
|
| - Diesel: Russia is a top exporter of diesel and also exports the
| heavy crude needed to make diesel. Diesel is used in everything,
| it's hard to sub out, has very inelastic demand, and short term
| supply is inelastic as well (fracked oil is diesel poor).
|
| - Propane (used in the US to dry the grain in remote farms). This
| is byproduct of NH4 production (i.e. produced by Russia). Also,
| the price, like oil but unlike CH4, is basically global since
| it's readily liquified. Therefore, it's a (expensive) substitute
| good for NH4 which the EUros are scrambling to get. Conclusion -
| The US produces enough for itself, but Russia is the marginal
| producer and sets the global price.
|
| - Man power, computer chips (those self driving tractors need
| chips!), etc. These need money, and the USD is not exactly going
| through it's finest moment.
|
| Farming is considered a perfect competition, so margins are
| important. A sharp blow on any one of these would knee caps
| farmers, but they're facing all their inputs going up. Russia
| doesn't need to be the majority, or even the top player in any of
| these to bring large increases in the cost of food to whomever
| she wants.
|
| [1]
| https://en.wikipedia.org/wiki/International_wheat_production...
| dalbasal wrote:
| So... A few points.
|
| The first point is that future crops are at risk. It's not
| necessarily about current production.
|
| The second point is that numbers and qualifiers like 25% of
| _exports_ , 1% of crop can degenerate into empty superlatives.
| Ultimately, skilled analysis is required for useful conclusions.
| The numbers don't stand for themselves.
|
| The third point is that markets can be very sensitive, and price
| changes can be big even if underlying changes in supply are
| small.
| ineedasername wrote:
| (TL;DR of the following points: Global Supply != _Global
| Availability_ )
|
| This analysis misses the real issue by focusing merely on global
| supply rather than the entire system. I'm also not sure of the
| accuracy of some estimates, that could be fog-of-war, but while
| the USDA is estimating 7M ton shortfall in exports, Ukraine
| exports about 24M tons annually [1] and _has banned all exports_
| of wheat & other food staples. [2] They've already shipped some
| grain this year, but the longer this conflict continues, the
| worse the problem will get.
|
| Maybe that doesn't yet change the overall global supply picture
| too much, but the author is not taking into account three very
| important aspects of this
|
| 1) Countries that have imported significant portions of their
| grains from Ukraine will be hit extremely hard by this. It's not
| much comfort to a country like Egypt that imports a significant
| amount of its food, a lot of that from Ukraine & Russia, to say
| "Oh but the global supply is barely reduced!". Contracts & import
| logistics of this magnitude don't turn on a dime, and there are
| undoubtedly logistical issues that make Egypt import from its
| current suppliers rather than another major exporter like the US.
|
| 2) During times of great uncertainly, global supply becomes
| somewhat disconnected from _$cost._ In terms of food
| availability, especially in poorer countries or to poorer people
| in somewhat wealthier countries, it 's really not relevant that
| global supply is up or down a few points when the current price
| of wheat futures _is up 40%_. Absent significant intervention
| (such as subsidies) lots of people are going to go hungry.
|
| 3) It's worth noting global logistics separate from #1 above. In
| normal times pivoting _quickly_ in this way would be difficult.
| Right now? Global logistics are still an absolute mess. It looks
| like bottlenecks are marginally better in places like SoCal, but
| there are shortages of a) ships b) shipping containers c)
| warehouse space d) trucking /drivers e) probably more. This will
| not only further complicate shifting to different suppliers, but
| also drive the end-point $cost higher than just the increase for
| the grain itself.
|
| [1] https://farmpolicynews.illinois.edu/2022/02/a-closer-look-
| at...
|
| [2] https://time.com/6156160/ukraine-bans-wheat-exports/
| log1_aa wrote:
| I do not agree with the author's analysis - the impact on supply
| and demand are enormous, and the 1% number does not matter.
|
| Effectively, the wheat buyer in Egypt (and other importers) needs
| to pay high enough prices such that: 1. Industrial wheat
| consumers in Europe/US and elsewhere substitute wheat with other
| products, making more wheat available for exports. 2. Previously
| untapped stocks get exported instead of stored.
|
| Is there enough wheat worldwide? Yes. The question is what price
| Egypt needs to pay to secure its supplies, and if Egypt can
| afford to pay that price.
|
| More details for the interested:
|
| Ukraine exports around 20 million tons of wheat each year.
| https://www.indexmundi.com/agriculture/?country=ua&commodity....
| We have to assume that Russian wheat will continue to be exported
| - there is no way that countries like Egypt will sanction Russian
| wheat. In the worst case scenario Ukraine will not ship any wheat
| for a year due to port closures and destroyed infrastructure, so
| the world loses 20 million tons of wheat exports.
|
| There are two ways to solve the issue - by increasing supply or
| rationing demand. High prices help with both.
|
| Supply solution: 1. Increase physical supply: It is not easy to
| source this amount of wheat elsewhere, especially not within a
| year. Most wheat in the northern hemisphere was planted last
| fall, meaning higher prices will not trigger a supply response
| for 1.5 years. Argentinean and Australian farmers can still
| increase their wheat plantings, but this will not be exported
| until November 2022 at the earliest. At the same time, the
| Ukrainian exports are missing right now. 2. Draw down global
| wheat stocks: Higher prices can make previously uneconomical
| exports profitable, pulling wheat from every available storage.
| The backwardated futures curve that helps with that - it makes
| storing wheat uneconomical. Stocks everywhere will draw down
| further, which means that wheat prices will remain elevated and
| susceptible to any further supply shocks (bad weather).
|
| Demand destruction: High prices destroy demand for wheat. Human
| consumption is relatively inelastic, meaning higher prices have
| little impact on consumption (and catastrophic consequences).
| However, wheat is also fed to animals or used for ethanol
| production, where demand is more sensitive to prices.
|
| Source: Working in wheat trading.
| heyitsanewacco wrote:
| 1% is a lot... why can't people deal with percentages of large
| numbers? Its COVID all over again. 1% of 7 billion is 70 million.
| Thats ten holocausts!
|
| Supply and demand means I won't go hungry, but less valuable
| people absolutely will. Like the Ukranians during the
| holodomor...
| csee wrote:
| I quickly googled what the annual wheat exports from Ukraine and
| Russia are and got a much bigger number than the tweet suggests.
| c1ccccc1 wrote:
| I googled as well. Ukraine exports were ~ 20 million tonnes.
| The tweet says the expected shortfall is ~ 7 million tonnes,
| probably because Ukraine is not expected to lose all of their
| production. If they did lose all 20 million, then the fraction
| would be 20 million / 778 million = 2.6%. Total production
| (including that consumed locally) is about 25 million, so if
| all of that were lost, the overall difference would be about
| 3.2%.
| groby_b wrote:
| You might want to (much less quickly) figure out what
| percentage of their exports is affected by their war, how the
| war & sanctions affect transportation & trade partners, and
| what the end result of _that_ is.
|
| Nobody has stopped exports completely. Nobody has stopped
| planting wheat.
| 01100011 wrote:
| How much of the capacity is affected by:
|
| - manpower shortages due to war
|
| - infrastructure destruction (roads, ports, etc)
|
| - cropland destruction
|
| - higher fuel prices
|
| - higher fertilizer prices
|
| - regional weather fluctuations
|
| I see many towns in Ukraine are destroyed or emptied of
| people. I don't suppose farms in those towns will be
| producing anything this year.
| groby_b wrote:
| These are all good questions, and I'm not denying Ukraine
| is suffering.
|
| What I'm saying is that they likely still will export
| wheat. The amount is the question. I'm saying that the
| question is harder (a lot harder) than a quick Internet
| search on what percentage of world wheat production comes
| from Ukraine.
| brian_cloutier wrote:
| This thread makes some claims which seem contradictory, or at
| least unusual. [0] claims that a rise in the price of wheat
| futures caused more wheat to be planted; fair enough. However,
| [1] claims that there is no wheat shortage, there is instead a
| shipping shortage, and [1] and [2] both claim that investors are
| unreasonably panicked, because there is not actually a wheat
| shortage.
|
| However, I really don't see the distinction between a "wheat
| shortage" and a "shipping shortage"; as the thread notes, in
| either case there are people without wheat. Areas with wheat
| shortages are going to have higher wheat prices, doesn't matter
| if there's plenty of wheat somewhere else!
|
| In [0] markets are good because the higher futures prices
| correctly stimulated enough production (which is strange because,
| if true, it means the inflated futures prices were _incorrect_).
| However, the markets which were smart enough to stimulate
| additional production were not smart enough to stimulate
| additional shipping.
|
| In [1] and [2] the higher prices (reacting to "a very real
| shipping problem") are nothing but panic, and even make it
| "harder [...] to get new import shipments launched")
|
| How can inflated prices be both the poison and the antidote?
|
| [0]:
| https://twitter.com/SarahTaber_bww/status/150777681533463347...
| [1]:
| https://twitter.com/SarahTaber_bww/status/150777682233906790...
| [2]:
| https://twitter.com/SarahTaber_bww/status/150777682448235316...
| jefftk wrote:
| _> I really don 't see the distinction between a "wheat
| shortage" and a "shipping shortage"_
|
| The distinction matters a lot if you're trying to solve the
| problem. I saw lots of people suggesting a few weeks ago that
| the US change policy to cause more wheat to be produced, which
| would only help with the former.
| brian_cloutier wrote:
| Sure, of course, but that doesn't explain why price increases
| due to a "wheat shortage" are just while price increases due
| to a "shipping shortage" are panic.
| TeeMassive wrote:
| It's winter...
| pixiemaster wrote:
| welcome to the clickbait-hell that we call journalism
| zaroth wrote:
| What's the tool to view this report in an acceptable format? I'm
| actually interested to read and share it.
|
| I'm not sure about this site, but it seems to be rendering the
| research report in some strange form hyper-optimized for
| advertising?
| cs702 wrote:
| A 1% decline in supply can have an enormous impact on price,
| because price is set at each instant by the marginal buyer and
| seller.
|
| For every 100 buyers (people) used to buying (eating) wheat every
| day, there is now only enough wheat for 99, on average. Wheat
| prices will therefore rise until 1 out of every 100 buyers cannot
| afford to buy their usual daily purchase of wheat. On average.
| alephnan wrote:
| > marginal buyer and seller
|
| Yeah, but are end consumers actually buying wheat at the margin
| ?
| JumpCrisscross wrote:
| > _are end consumers actually buying wheat at the margin ?_
|
| Yes, everything transacts at the margin.
| swagasaurus-rex wrote:
| The margin shifts for each step in the supply chain in
| order to pay for the work done in that step. And earn a
| margin on that work.
| exdsq wrote:
| As I've previously commented on this topic on HN, the only reason
| this will start a food shortage is if people start prepping for a
| food shortage. If this news wasn't as widely reported we'd be
| fine but the more we talk about it the more likely it'll become a
| thing.
| ginko wrote:
| That's nice and all but it doesn't really help countries like
| Egypt that import over 60% of the wheat they consume.[1]
|
| [1] https://theconversation.com/russia-ukraine-crisis-poses-a-
| se...
| gumby wrote:
| It sure does and the article explains it (it's a transport
| issue not a supply issue, as the growth in wheat production
| this year will exceed the shortfall).
| phreeza wrote:
| Presumably they already bought wheat futures for a significant
| fraction of demand, and so it is up to the sellers to organize
| the actual wheat, possibly at a loss.
| throwaway6532 wrote:
| They have 4 months worth of strategic reserves and I read
| somewhere planned deliveries will bring that up to 8 months
| worth. I think the danger is in future if those 8 months
| worth get burnt through and replacements don't come. That's
| still an unknown at this point, but it's what I'm personally
| watching out for in terms of being able to see around the
| corner to what may be coming next.
| RcouF1uZ4gsC wrote:
| As an aside, I found that fascinating that Egypt is such a huge
| grain importer.
|
| In the ancient world, Egypt was one of the largest grain
| producers and basically fed the Roman Empire.
| bell-cot wrote:
| https://en.wikipedia.org/wiki/Demographics_of_Egypt#Vital_st.
| ..
|
| Looks like the population went from ~15.4M in 1934 to ~100.5M
| in 2020. I'd bet that neither the area devoted to
| agriculture, nor the productivity (per unit area) increased
| by anything resembling that ~553% increase.
| JoeAltmaier wrote:
| Probably it did. It did in the US over that time. Modern
| farming practices raised yields on some crops from ~20bu
| per acre to around 200 today.
| bell-cot wrote:
| Perhaps. But to skim over Egypt's economic history -
| https://en.wikipedia.org/wiki/Economy_of_Egypt#History -
| their only substantial exports, back in the 1930's, were
| agricultural products. I'll guess that the British Empire
| was not generously subsidizing Egypt's food imports then,
| nor were there millions of free-spending tourists to be
| paying, nor...
|
| Edit: Okay, perhaps Egypt had replaced many of its wheat
| fields with cotton fields by the 1930's, and was buying
| food with the cotton money. The British cotton industry
| might have loved that...but "massive food imports paid
| for with a cash crop" is a dangerous strategy to play
| long-term, or on a national scale. And Egypt threw off
| the last of the British yoke in the mid-1950's.
| lolinder wrote:
| It makes a _big_ difference everywhere else, though.
|
| I personally know people in the US who are buying large
| quantities of wheat and other food in preparation for the
| pending food crisis. They expect food prices _in general_ to go
| through the roof because 1 /4 of the world's wheat has suddenly
| gone missing.
|
| While there _will_ be famines because of this war, if Sarah
| Taber 's numbers are accurate then the reporting within the
| United States has been horribly irresponsible, and it's
| important to call it out and spread the real numbers.
| chewz wrote:
| Egypt - arable land 2.9 pct (more or less constant from 1961).
| Population - 105 milion (1961 - 26 milion).
|
| https://www.worldometers.info/world-population/egypt-populat...
|
| https://data.worldbank.org/indicator/AG.LND.ARBL.ZS?location...
| BasilPH wrote:
| She talks about this further down in the thread, making it her
| main point:
|
| > Again, specific places are facing EXTREMELY REAL wheat supply
| problems. MENA usually sources from Ukraine. Switching supply
| chains to India & other sources takes extra time, & if they're
| further away from India and Ukraine, it takes longer for
| supplies to get there.
|
| and
|
| > To solve that problem, we gotta start with being clear on
| what the problem IS!
|
| > We haven't! We decided it's a wheat shortage, not a shipping
| shortage.
|
| > So investors panicked, drove up the price of wheat, & made it
| even harder for these places to get new import shipments
| launched
| dustymcp wrote:
| That is ironic given they where the grain suppliers of ancient
| rome? [1]
|
| [1]https://en.wikipedia.org/wiki/Cura_Annonae
| xbar wrote:
| Why is it no longer possible for Egypt to grow its own wheat?
| OwlsParlay wrote:
| They do, but their population has also ballooned far past
| what their own agriculture can supply.
| senortumnus wrote:
| Slightly informed guess is that the highly productive but
| water-constrained farmland of the nile valley is better
| used for value crops, like fresh fruits and vegetable, than
| a staple such as wheat which is more cheaply grown
| elsewhere.
|
| Edit: there's a great writeup about "hoop" style greenhouse
| farming there and how productive and water efficient it
| is... but the article escapes me presently
|
| Edit2: ah! Here:
| https://www.nytimes.com/2019/07/30/dining/norwich-meadows-
| fa...
| stubish wrote:
| There are far, far too many people in Egypt. Egypt has had
| plans for decades to irrigate large parts of the desert to
| help solve the problem, but so far it hasn't gotten much
| further than the planning stages.
| jelliclesfarm wrote:
| Egypt gets most of its food aid from Saudi. Saudi is
| entirely reliant on wheat imports and tried to grow wheat
| in the desert to no avail.
|
| In the past decade, Egypt has been reliant from Saudi,
| UAE and Kuwait. This has always been so.
| denni9th wrote:
| Egypt is mostly desert, the only arable land is on the
| banks of the Nile.
| screenbreakout wrote:
| While I was there this winter, I saw huge new plantations
| of dates? or palm (oil)? in the western desert sucking up
| the underground aquifers....fields with cows grazing
| there... also they're probably growing wheat....doesn't
| look sustainable but what do I know about the politics of
| economic corruption.... bread is dirt cheap, it being a
| bit more expensive might lead them to improve their diet
| somewhat... I mean their dates are fabulous...
| imtringued wrote:
| There are probably some plants that grow better in Egypt
| than any other place. "Comparative advantage" makes you
| eternally dependent on the benevolence of other nations
| because wheat is more important than dates. The idea that
| Egypt has the same negotiating power as the wheat
| exporting nations is laughable.
|
| In principle, one could attempt a afforestation project
| in Africa and it would pay dividends over centuries, but
| the current system doesn't reward longevity or
| sustainability.
| throwaway6532 wrote:
| In general if you were to take away synthetic fertilizers
| and rely only on traditional agriculture without over-
| pumping water from aquifers you start to realize that the
| population of planet earth is only possible to sustain at
| its current levels with the current system and if/when
| parts of that start to go away then some of the people
| start to go away too.
|
| The current situation highlights the reliance also on
| global supply chains functioning properly. These are fun
| times.
| mooreds wrote:
| If the shortfall in exported wheat is ~1% of global production,
| and farmers in other countries (India, USA) already are
| planting more to make up for it, what is preventing Egypt and
| others from importing from those other countries to replace
| Ukraine/Russian exports?
|
| What am I missing?
| prostoalex wrote:
| > and farmers in other countries (India, USA) already are
| planting more to make up for it
|
| Are they? Fertilizer prices are up 3x-5x, depending on where
| you look, due to Russian export restrictions, so for many
| farmers it's cheaper to wait it out and give the soil a rest.
|
| Planting reports have only started trickling in, so we don't
| have a good global view of what has been planted in spring
| 2022.
| jtbayly wrote:
| Most wheat was planted 4 months ago, according to the
| author.
| keneda7 wrote:
| Contrary to what the US media and current US
| administration are saying, we had major issues before
| Russia invaded Ukraine. This idea that the Russia
| invasion is responsible for all these problems is
| ludicrous. Yes, it has made them worse but it is not the
| root cause. The fertilizer shortage was happening at the
| end of last year. You know the 4 months ago you quoted.
|
| https://www.theguardian.com/environment/2021/nov/25/ferti
| liz...
| jtbayly wrote:
| Some farmers were delaying buying fertilizer, according
| to that article. Nothing in that article indicates that
| they were not planting because of a "shortage." Prices
| were simply higher and some people were betting on them
| going up and some were betting on them going down.
|
| I'm in agreement with the idea that this isn't primarily
| caused by Russia's invasion of Ukraine. Read the author's
| other thread on fertilizer for more context on that.
|
| She says it's primarily a shipping problem, not a
| production of fertilizer problem. Which tracks with the
| idea that this is simply another example of the global
| supply chain snarling things up.
| whatevertrevor wrote:
| Wheat is a winter crop in India FYI, a lot of the mass
| grain production switches to rice in the spring/summer
| season.
| randomdata wrote:
| _> so for many farmers it 's cheaper to wait it out and
| give the soil a rest._
|
| If you play your cards right, and Mother Nature plays nice,
| this could be the most profitable year of farming seen in a
| long time. Costs are up, yes, but the income potential is
| up even more. Why would anyone choose this year, of all
| years, to "give the soil a rest"?
| pletnes wrote:
| Because you need the cash up front to buy the ingredients
| - seed, fertiliser, diesel - all more expensive than last
| year. (Not saying you're wrong though.)
| randomdata wrote:
| The land is going to be your largest expense in the
| typical case. If you truly can't come up with the money
| for inputs, how are you going to carry the land? You can
| often push your land costs until after harvest, but if
| you don't have the harvest to pay for it... And if you
| know you won't be able to put a crop in due to budgetary
| constraints, why wouldn't you rent it out to another
| farmer? There are lineups of hungry farmers ready to
| spend whatever it takes to find new ground to work.
|
| I find it hard to believe that land is going to lay
| fallow this year specifically because of what's going on.
| Certainly people are adjusting what they plan to grow to
| optimize for the situation. That is definitely happening.
| bluGill wrote:
| That is the easy part, any farmer these days is already
| selling their crop before it is planted. They let
| investors and insurance take the major risk, between the
| two they are guaranteed to break even, and if there is
| anything left over because of a good year (there normally
| is) that is profit. if investors are not willing to buy
| their expected crop at the price needed to break even the
| farmer doesn't plant at all.
| mcguire wrote:
| By the same Dr Sarah Taber: https://twitter.com/SarahTaber_
| bww/status/150780888453416961...
| woeirua wrote:
| The physical wheat may exist, but it may not be possible to
| supply it at the same prices (especially given increased
| transportation costs due to energy prices). There may be no
| physical shortage, but if prices for wheat increase 50% in
| Egypt then many people will go hungry.
| awb wrote:
| The author frames the problem less as a wheat production
| problem and more as a shipping problem.
|
| > Again, specific places are facing EXTREMELY REAL wheat
| supply problems. MENA usually sources from Ukraine. Switching
| supply chains to India & other sources takes extra time, & if
| they're further away from India and Ukraine, it takes longer
| for supplies to get there.
|
| FYI, MENA = Middle East / North Africa
|
| > What these places are facing is a SHIPPING shortage. Not a
| lack of enough wheat in the world. Their food supply chain
| problems are still dangerous. A local, shipping-induced
| shortage that lasts a week can still kill you.
| pempem wrote:
| A sincere question:
|
| Would it not then be helpful to support these new or
| temporary supply chains as a war effort? Shouldn't that
| fall under humanitarian aid?
| stubish wrote:
| I think China may step up here, as it is a great
| opportunity to promote their One Belt, One Road
| Initiative. And they will be one of the countries with
| excess wheat to sell. And it will make Australia look
| stupid if they have wheat but no boats and no signature
| on the agreement.
| pempem wrote:
| Another step up opportunity for China would definitely be
| problematic for the US
| bell-cot wrote:
| If the shortages are in rail lines, grain elevators,
| shipping terminals, bulk cargo ships, etc...no sort of
| "support" can create those at all quickly.
| Robotbeat wrote:
| Trucks. Lots and lots of trucks.
| webmaven wrote:
| Leaving aside the issue that trucks can't move stuff
| across oceans, how do you get the extra trucks to where
| they are needed?
| p1mrx wrote:
| Lots and lots of snorkel kits.
| pm90 wrote:
| Ships
| danuker wrote:
| As a Romanian I visited Lviv a few years ago. There were
| some disaster potholes right past the border. It took 1
| hour to go through say, 10km with a small car. Unless
| those roads get fixed, I expect only military or
| otherwise rugged trucks to be able to pass quickly.
| Otherwise, you'd need a lot of trucks to get a
| significant flow of goods.
|
| Example:
|
| https://www.google.com/maps/@48.0388842,22.9469939,3a,75y
| ,33...
| paganel wrote:
| That's why the Russians de facto imposing a blockade on
| Odessa and generally speaking on the Ukrainian ports at
| the Black Sea is so important to them.
|
| Also Romanian in here, from the Southern part of the
| country where we happen to grow lots of wheat. We're also
| close by the Danube, which helps a lot with transport
| (companies like Cargill have invested massively during
| the last decade in here).
| bombela wrote:
| Ah, looks barely worse than roads in the Silicon Valley.
| Maybe that's why everybody drives SUV and pickup truck
| over here.
| pempem wrote:
| Yeah...I was thinking ships from India and trucks from
| the east for example.
| JumpCrisscross wrote:
| > _What am I missing?_
|
| Logistics.
|
| Food scarcity is a problem not of supply but of transport.
| More wheat in the American heartland doesn't help Egypt if
| every truck, ship and port is booked out for six months. More
| rice produced in India doesn't help if half of it rots en
| route to the city.
| ineedasername wrote:
| _> What am I missing?_
|
| Shifting suppliers on this scale in normal times isn't a
| quick process. Right now global logistics are still a
| complete & total mess.
|
| With great uncertainty, $cost becomes somewhat disconnected
| from supply. Right now futures are up about 40%. Availability
| won't mean much if it isn't affordable, and countries need to
| lock in supply because it's not really a JIT distribution
| system (see previous point on logistics). If the war has
| disrupted your deliveries 3 months out, you need to lock in
| new contracts _now_ (if not 3 months ago) to keep supply
| moving.
| jacobolus wrote:
| Grain is shipped in large specialized dry bulk cargo ships.
| It's a lot closer to ship from Ukraine to, say, Egypt than
| to ship from Australia or Canada or even India. If you ship
| your grain N times farther, you need N times as many ships
| to make the same number of trips. Those ships don't exist
| or can't be mustered on short notice, so you have to use
| some other kind of (less-specialized, less efficient and
| more expensive) shipping.
|
| Even if you can manage to get all of the grain where it
| needs to go on new routes, the price of grain is going to
| go up substantially in places previously importing from
| Russia/Ukraine, and the logistical changes will cause
| second-order disruptions to other global shipping.
| Dylan16807 wrote:
| > If you ship your grain N times farther, you need N
| times as many ships to make the same number of trips.
|
| Which would be really bad if it was a global increase,
| but when it's a tiny sliver of the market you only need a
| sliver of spare capacity.
| ineedasername wrote:
| >you only need a sliver of spare capacity
|
| If there was spare capacity, but there doesn't seem to be
| much at all. 1 in 10 inter-country wheat shipments will
| be Ukrainian, and it's about 1 in 7 for corn, probably
| other crops as well. Repurposing that shipping capacity
| isn't easy either, from a logistics standpoint. It can
| take up to a month just for a ship to cross the Pacific,
| before any other route complexities. It doesn't help that
| there's over 100 such cargo ships tied up in Ukrainian
| ports either, a decent proportion of which will be the
| subset of cargo ships fitted out for bulk grain
| transport.
|
| The last few years have already shown us how delicate the
| global logistics & supply chains are. It doesn't take
| much to stretch them near to the breaking point, and
| we're already close to that point.
| ineedasername wrote:
| Thanks for the added detail-- I wasn't aware of details
| specific to the Ukraine <-> Egypt supply chain, and this
| demonstrates extremely well the difficulties of shifting
| supply sources.
| KarlKemp wrote:
| If anyone else is wondering, the largest ships carry
| 300,000 DTW, which is 300,000,000 kg each of which has
| 3400 kCal. Daily caloric intake of 2,000 may be suitable
| average, meaning that one ship can supply all energy
| needs for 1.5 million people and one year.
|
| (3700 * 300000 * 1000) / (365 * 2000)
| ineedasername wrote:
| Keep in mind that grains are not only used for human
| consumption though. It's also used for animals. Egypt has
| 10M cattle alone [1] and a 1,000lb animal needs roughly
| 7x the calories as a person. [2] So that same largest
| cargo ship will only feed about ~200,000 cattle,
| requiring 50 such ships to feed the cattle population.
|
| They produce about 1.8 billion heads of poultry [3], and
| in total only about 1/3 of their animal feed requirements
| are produced domestically [1].
|
| Animal feed appears to be in a different category from
| other grain imports for human consumption, probably
| because it really is a separate product containing a
| mixture of grains and nutrients from other sources.
| Unfortunately though, much of it is also imported from
| Ukraine [4] which has banned all exports of grains for
| now, and it's probably a reasonable assumption that this
| will include grains used in animal feed, since the issue
| is the food security of their own people.
|
| Eqypt is going to need a lot more newly-sourced grains or
| grain-based products, a large # of container ships full
| of it.
|
| [1] https://apps.fas.usda.gov/newgainapi/api/Report/Downl
| oadRepo...
|
| [2] https://cals.arizona.edu/forageandgrain/sites/cals.ar
| izona.e...
|
| [3]
| https://crimsonpublishers.com/cras/pdf/CRAS.000502.pdf
|
| [4]
| https://www.feednavigator.com/Article/2016/09/19/USDA-
| Egypti...
| log1_aa wrote:
| While the largest bulk carrier ships can indeed carry
| 300,000 tons of cargo, these ships are usually used to
| transport iron ore or other ores. It is very rare that
| wheat is transported on ships that carry more than 70,000
| tons. The main reason is that neither origin or
| destination port logistics allow for larger shipments,
| and most buyers cannot store such large quantities of
| wheat.
| blaser-waffle wrote:
| Political will, removing subsidies for farmers, logistics of
| actually shipping wheat, climate change, etc.
| mooreds wrote:
| > Political will
|
| Of who? Don't the farmers who grew extra wheat want to sell
| it? Or are you talking about governments preventing wheat
| exports (I know that has happened in the past).
|
| > removing subsidies for farmers
|
| Not sure how that is germane. What do you mean?
|
| > logistics of actually shipping wheat
|
| That's a great point! Shipping from the Black Sea ports to
| Egypt/other ME nations is surely cheaper than sending wheat
| from India/Aus/USA to those areas.
|
| > climate change, etc.
|
| Sure, that's a threat to wheat (and food in general)
| everywhere and will be for decades. Do you see it as
| particularly acute/relevant to the current situation? I
| don't.
| drexlspivey wrote:
| How is climate change preventing Egypt to import wheat from
| India instead of Russia?
| KarlKemp wrote:
| By causing a previous rise in food prices in the region,
| which caused a hungry merchant to immolate himself, which
| caused widespread protests and, ultimately, unrest
| including the Syrian war, which allowed Putin to test his
| air force, creating the smug attitude that he could
| invade the Ukraine.
| throwaway6532 wrote:
| The previous rise in food prices also being attributable
| to the Russian heatwave of 2010 being the link to climate
| change.
| Loughla wrote:
| So spring wheat is harvested in the fall, and won't be
| planted for a little bit in the US, because it's just now
| starting to get to spring in many states. Winter wheat, which
| would be harvested this spring, should've been planted months
| ago.
|
| So there's a gap in production, regardless of where they get
| their wheat from, I guess is what I'm trying to get at.
| mooreds wrote:
| From the twitter thread:
|
| > And the world's farmers already started planting more
| wheat 4 months ago, when wheat futures rose due to
| possibility of Black Sea conflict.
|
| > India went all-out planting more wheat, looks set to
| continue a 3yr streak of rapidly increasing wheat exports.
| The US planted four MILLION more tons more wheat seed last
| fall than usual. Aus, Canada, Argentina, South Africa, even
| Brazil getting in on it.
|
| The author's credentials: "I'm Sarah Taber, a crop
| scientist with 23 years in agriculture. I started out in
| field work at 14, put myself through crop school, and got a
| front-seat view of the dirty underbelly of the farm trade."
| https://www.patreon.com/user?u=5610560
| Kon-Peki wrote:
| Here are the last 6 years of winter wheat crop reports in
| the USA [1]. I don't believe that the slight increase in
| winter 2021/spring 2022 planting in the USA is anything
| other than a normal variation. I make no claim to know
| anything about the rest of the world, but I am skeptical
| that expectations of a Black Sea conflict has anything to
| do with planting 4 months ago.
|
| PS, you can get even more data, further back in history,
| directly from the USDA [2], but it is a little difficult
| to navigate this site. This link [3] _might_ work for
| everyone, it is a query for acres of wheat planted all
| the way back to 1919.
|
| [1] https://usda.library.cornell.edu/concern/publications
| /z890rt...
|
| [2] https://www.nass.usda.gov
|
| [3] https://quickstats.nass.usda.gov/results/64834CCE-2C3
| A-39A1-...
| nkurz wrote:
| > Winter wheat, which would be harvested this spring
|
| Since this is a site that cares about accuracy, I'll
| mention that while winter wheat is planted in the winter,
| it's harvested in the summer or fall. It doesn't grow fast
| enough to be harvested in the spring. Instead, it's a way
| of getting a boost on the season by getting the roots
| established early. I don't think there is anywhere it can
| be harvested early enough that one can plant two crops per
| year in the same field. More details and dates for the US:
| https://www.machinefinder.com/ww/en-US/faq/when-is-winter-
| wh...
|
| (If you want to claim that you are technically correct,
| I'll concede that it is true that hypothetical Florida or
| Alabama winter wheat might be harvested in May. I hadn't
| even known that they grow winter wheat there!)
| randomdata wrote:
| _> I 'll mention that while winter wheat is planted in
| the winter, it's harvested in the summer or fall._
|
| Who is harvesting winter wheat in the fall? Even here in
| snowy Canada it's a late harvest if the winter wheat
| comes off in August. Mid-July is typical. Spring wheat is
| a different story.
| nkurz wrote:
| Hmm. The page I linked shows Idaho, Minnesota, Montana,
| Oregon, Washington, and Wyoming with a harvest season
| extending into September. But other than Idaho (Sept 14)
| not by much. So technically I might be right, but only in
| the same way that "Spring" is also correct for the deep
| South.
|
| I had assumed that most of Canada would be later than the
| Northern tier of the US, but apparently I'm wrong. I
| wonder if it's because the summer days get longer the
| farther north you go, and at some point you actually get
| earlier ripening? Or maybe it's all local weather. In any
| case, thanks for the correction.
| lambic2 wrote:
| I don't understand why she mentions "most of the world plants
| wheat in the fall" if, as far as I understand, Ukraine plants
| their wheat in the spring. Since 1) we're in the middle of their
| planting season 2) Ukraine produced 40 million tons of wheat last
| year 3) Given the current situation it's very hard to predict how
| much wheat will be successfully produced this year - It looks
| like the majority of farmers won't be able to grow their crops -
| how is she so sure about the 7 million ton shortfall figure? It
| seems reasonable it will be closer to 20-30 million ton shortfall
| for this year/next year unless I'm missing something.
| mentalpiracy wrote:
| If you read two tweets down the thread, she explains that
| Ukraine is a winter wheat producer. Winter wheat is planted in
| the fall, and harvested in spring-summer.
|
| It has already been planted.
| onenukecourse wrote:
| Why wouldn't Ukraine also plant a fall harvest crop? I
| thought Northern countries try to plant two crops per year.
| Countries like Argentina try to plant three.
| anonAndOn wrote:
| > Ukraine plants their wheat in the spring
|
| This aligns with every single combat photo I've seen thus
| far. I don't think I've seen one field of winter wheat. So
| the shortfall is not in winter wheat, but in the types
| planted right now.
| randomdata wrote:
| _> This aligns with every single combat photo I 've seen
| thus far. I don't think I've seen one field of winter
| wheat._
|
| 1. How many photos from the war have you seen of farmland?
| It's not exactly the prime battleground.
|
| 2. We can assume that you can recognize winter wheat at
| this stage from photos not focused on the crop? It, of
| course, looks like someone's dead lawn when it first
| emerges from it's winter rest. Hard to differentiate from
| any other grassy area unless the photo has a lot of detail.
|
| On that note, I started looking at some random pictures
| after I read your comment. I came across this one[1] of a
| field. Wheat or no in your opinion? In my opinion as a
| winter wheat grower: I have no idea. _Maybe_.
|
| [1] https://asianatimes.com/wp-
| content/uploads/2022/02/XFXJX6VK3...
| anonAndOn wrote:
| 1. Hundreds. Twitter and Telegram are your best bet for
| field kills.
|
| 2. Does it? I've never seen a lawn planted in 7-8" rows.
|
| Regardless of the species of plant in the photo, does
| that look like a tilled field to you?
| randomdata wrote:
| _> Does it? I 've never seen a lawn planted in 7-8"
| rows._
|
| I've never seen 7.5" rows be row-able at that stage
| unless you line yourself up just perfectly. Given that
| the photographers aren't focused on the crop itself, what
| are the chances? With sufficient resolution of the photo
| maybe you can still tell, but someone's random cell phone
| photo isn't going to give you that. Even a top of the
| line camera scaled down to web resolutions is going to
| lose that information.
|
| _> Regardless of the species of plant in the photo, does
| that look like a tilled field to you?_
|
| No, but why would you till it? Wheat is the easiest crop
| to no-till out there. Even the moldboard mafia no-till
| their wheat. You'd have to be dealing with some heavy
| compaction or other issues with the land to justify that
| fuel burn just to grow poverty grass.
| log1_aa wrote:
| The photo shows pasture land, not winter wheat. The wheat
| crop in Ukraine is almost 100% winter wheat that is
| planted in the fall. Source: https://www.fas.usda.gov/sit
| es/default/files/2022-03/Ukraine...
| randomdata wrote:
| While I tend to agree, especially since the photo appears
| to be of military training and not actual combat, here[1]
| is a photo of known winter wheat. This photo was taken a
| little bit later in the year, so the leaf is more
| pronounced and greener than you'd expect of the current
| crop, but even then is the casual observer looking for
| pictures of war going to notice? They really don't look
| all that different to me without stopping to really study
| the details and the first photo doesn't have much detail
| to work with. I would bet that this[2] is a field of
| wheat seeded into soybean stubble, but how can you really
| tell for sure?
|
| [1] https://imgur.com/a/MII3Sc1
|
| [2] https://pbs.twimg.com/media/FPMuO-
| OXwAsWAuU?format=jpg
| nkurz wrote:
| I was going to ask you when it is typically harvested,
| but thought I'd check the page you helpfully linked:
|
| _Winter wheat accounts for about 97 percent of Ukraine's
| total wheat production. It is planted from early
| September to mid-November and harvested between July and
| September._
|
| So depending on what happens with the invasion, it seems
| possible that a substantial portion might still be
| harvested on schedule.
| mceoin wrote:
| David Friedberg on All In Podcast went into this topic quite a
| bit. (His bona fides: ex Monsanto Exec, active founder/investor
| in food/ag space, previously founded climate.com).
|
| Prediction was 200-300m people facing starvation due to the food
| shortages. Fertilizer input costs being the major driver, with
| decline in wheat exports also being an important factor.
|
| https://podcasts.apple.com/us/podcast/e72-impact-of-sanction...
| thepasswordis wrote:
| I absolutely despise things like this.
|
| The war in Ukraine, amplified by the West's anemic and at _best_
| useless sanctions, have likely led to a famine which will effect
| millions of people.
|
| Yeah, us sitting here in our offices in the richest country in
| the world, arguably the people who helped _cause_ this, won 't be
| effected. Maybe our food prices go up a tiny bit.
|
| The people in developing countries, like usual, will now become
| victims of starvation, which will lead to revolutions and civil
| war, and ultimately more suffering.
|
| I'm sorry to be so cynical about this, but it has been like
| watching a slow motion, unending train wreck see the last year of
| foreign policy nightmares coming out of The United States. It
| turns out that, no, we are not in the end of history, and yes,
| there are still a lot of bad people in the world.
|
| Our foreign policy laziness/ineptitude has led to a situation
| where the leader of a nuclear armed, hostile superpower (Russia)
| has two choices: win his war against the west, or die. In the
| process we have invalidated the idea of The Federal Reserve
| meaning anything (oh you have USD deposits? You made us mad?
| We'll just cancel them!), and are about to see countries selling
| oil denominated in something other than USD.
|
| To be clear: Putin is a monster who has now killed thousands, and
| destroyed a country. I wish he was rotting in a prison cell. But
| the reality is: he isn't, and these absolutely idiotic sanctions
| we are imposing on Russia will lead to none of our stated foreign
| policy goals, and only suffering for the poor.
|
| Somebody's twitter thread about how acksually this isn't a bad
| thing offers me no comfort in this regard.
| stevesimmons wrote:
| What would your solution be?
|
| This is a serious question. Yes, sanctions hurt ordinary
| people. Yes, there are second order effects that will hurt many
| people in the developing world. But equally, giving in to Putin
| will create a bigger problem for Ukraine now, and for eastern
| Europe and Taiwan in future.
|
| There are no easy solutions here. Otherwise they would have
| been taken already.
| thepasswordis wrote:
| The original ask from Russia was: Donbas becomes part of
| Russia, crimea becomes officially part of Russia, Ukraine
| promises not to join nato, and "denazification" of the
| Ukrainian government.
|
| Ukraine is now offering that to Russia. My ask is that the
| adults who were screaming at the top of their lungs to take
| that deal a month ago, were listened to.
|
| Further that the people screaming at the top of their lungs
| that turning a nuclear superpower into an isolationist state,
| and actively working to collapse their economy, is a
| _suicidally stupid_ thing, also be listens to.
| velcrohacker wrote:
| Please provide a source. The last I heard was that Ukraine
| would agree not to join NATO if it were voted on by
| Ukraininians after the Russians withdrew completely. Oh,
| and the other condition is that other countries like the US
| will guarantee Ukraine's safety, in a framework remarkably
| similar to Article 5 of the NATO agreement. I have never,
| ever heard Ukraine agree that Donbas and Crimea would be
| annexed by Russia.
| onenukecourse wrote:
| It doesn't matter what Ukraine wants vis a vis NATO. NATO
| states have publicly admitted they were egging the
| Ukrainians along with NATO membership. NATO doesn't want
| to guarantee Ukraine's sovereignty. They couldn't care
| less about Ukraine.
|
| NATO want to put missiles in Ukrainian and Georgian
| fields. Now that they've admitted that NATO's out of the
| question, why would Ukraine agree to make itself a
| target?
| leesec wrote:
| Appeasing sycophantic maniacal warring leaders doesn't have
| a great track record, sorry.
| thepasswordis wrote:
| Exactly! And in 2014, when they were invaded, not only
| did we refuse to honor our obligations as outlined in the
| Budapest agreement, but we refused to even start sending
| them _weapons_ to defend themselves until 2017!
|
| And then in 2021, the sanctions put in place to keep them
| in check WRT nordstream2 were lifted!
|
| The appeasement is exactly why we're in the situation
| that we're in: completely incompetent (at best) foreign
| policy appointees fumbling us into a potential global
| conflict.
| rr808 wrote:
| The problem with agreeing to the original ask of giving up
| more land is that it just continues to escalate. in 2014
| already Russia took Ukraine and a chunk of Eastern Ukraine.
| If you give up more this year, what happens in 10 years?
| Russia will just ask again. Its the same all around the
| Russian borders. Putin is a thug who just demands more for
| himself. If you dont fight him now you'll be doing it next
| year.
|
| Here is a great thread about this (read to the end):
| https://twitter.com/kamilkazani/status/1503053699798769666
| also
| https://twitter.com/kamilkazani/status/1503768312236421120
| Ancapistani wrote:
| > Ukraine is now offering that to Russia
|
| I've not been watching this as closely for the past week or
| two as I was previously, but I've not seen this.
| Particularly the "denazification" point seems unlikely to
| be agreed to by Ukraine.
|
| Do you have a source for this claim?
| thepasswordis wrote:
| https://www.reuters.com/world/europe/ukraine-sets-
| ceasefire-...
|
| Of course the "denazification" thing is dropped. It was
| nonsense propaganda to begin with.
|
| I'm curious where you are following this? This was
| absolutely huge news at the beginning of this week. It's
| really weird to me that wherever you are closely
| following this didn't cover it.
| velcrohacker wrote:
| Your source does not support your claims.
| thepasswordis wrote:
| Yes it does. Read the entire article. Or if you don't
| actually care, don't. But please don't spread
| misinformation like this.
| Ancapistani wrote:
| > I'm curious where you are following this? This was
| absolutely huge news at the beginning of this week. It's
| really weird to me that wherever you are closely
| following this didn't cover it.
|
| It's where I _was_ following it. Work has gotten in the
| way lately and I've had very little time for current
| events.
| saiya-jin wrote:
| I don't get people like you - you are seriously
| contemplating what Putin's PR team announce on given day
| as some seriously meant opinion that's worth anything.
| When its exactly opposite, just empty words, full of
| lies, deceit and lack of anything meaningful. Spending
| any amount of energy on them is waste of time, next day
| will next round of demands.
|
| You do realize that even if his demands would be met for
| some reason, there would be another and another round of
| demands till you have nothing and he has everything. Just
| random things I recall were mentioned by him/PR in last
| month - complete demilitarization of Ukraine (so you can
| defeat whole country with 2 tanks), demilitarization of
| _whole_ Europe (hinting at his long-term ambitions).
|
| Everybody in politics recognizes this and realizes that
| peace talks are sham, yet another set of lies. War will
| end exactly and only when he decides it, not a second
| earlier regardless of whats happening in Ukraine and rest
| of the world.
| thepasswordis wrote:
| Do you think that Reuters is part of some conspiracy to
| print things from Putins PR team and pass them off as
| statements by Urkairne?
| munk-a wrote:
| Neville Chamberlain agrees that forcing Ukraine to cede
| land to Russia will solve the problem once and for all -
| just like it did when we tacitly accepted the permanent
| Russian occupation of Crimea.
|
| It really isn't a secret that Putin is pining for the days
| of the Soviet Union and wants to reunite the old power
| block - so why would we ever want to risk sacrificing the
| stability of the EU to restore the Warsaw Pact and all the
| international conflicts that came with it?
| saiya-jin wrote:
| > Putin is a monster who has now killed (directly and
| indirectly) millions, and destroyed countries
|
| Corrected that for ya.
|
| I don't offer quick safe easy solutions to above issues. I
| don't think they exist. Don't vote for Trump-like populists
| effectively trying to sell rest of western world to Russia just
| because they are republicans just as you? Don't leave weak
| states at mercy of all-grabbing merciless powerful industries?
|
| That's an empty phrase and wish too, there are reasons why
| Trump got voted in and almost won second time, he just said
| things too many people wanted to hear. I would say reasons of
| very polarized US society, you are either with us or against.
| As we can see ie in UK its not unique to vote populists in
| place even in countries with strong democracy.
|
| I don't see what can be done more effectively in this multi-
| polar world to a bad state owning tons of nukes. Even if only
| 1% would be functional its still too many.
|
| Or you want to ignore whats happening just to keep business
| going and prices steady? I don't think anybody in US government
| really cares about Ukraine or its people, but they are
| logically helping damage their adversary and Russia is working
| hard to give them moral/PR upper hand. But make no mistake,
| this war is about future of Europe, not just Ukraine. If Europe
| is split into pre-1989 order, US and its power projection will
| be severely weakened.
|
| Have a hit squad taking down just Putin? Good luck there, I
| think as KGB agent he should have this covered. I think 1
| billion USD and US citizenship & evac with family to anybody in
| his inner circle who would take him down would have higher
| chance. But maybe 10 years down the road it would be viewed as
| a very bad decision. You want to reform Russian society? I'd
| call that an impossible task for an external entity.
|
| So, what's the solution to this situation?
| lkbm wrote:
| > Yeah, us sitting here in our offices in the richest country
| in the world, arguably the people who helped cause this, won't
| be effected. Maybe our food prices go up a tiny bit.
|
| > The people in developing countries, like usual, will now
| become victims of starvation, which will lead to revolutions
| and civil war, and ultimately more suffering.
|
| > Somebody's twitter thread about how acksually this isn't a
| bad thing offers me
|
| The Twitter thread very explicitly states that this is an
| extremely bad bad thing that will cause famine in specific
| developing countries and that the actual resulting issue we
| need to address to prevent it is logistics. From the thread:
|
| > Again, specific places are facing EXTREMELY REAL wheat supply
| problems. MENA usually sources from Ukraine. Switching supply
| chains to India & other sources takes extra time, & if they're
| further away from India and Ukraine, it takes longer for
| supplies to get there.
|
| > What these places are facing is a SHIPPING shortage.
|
| > Not a lack of enough wheat in the world.
|
| > Their food supply chain problems are still dangerous. A
| local, shipping-induced shortage that lasts a week can still
| kill you.
|
| > To solve that problem, we gotta start with being clear on
| what the problem IS!
|
| > We haven't! We decided it's a wheat shortage, not a shipping
| shortage.
|
| > ...
|
| > And that's how a 0.9% shortfall in global wheat production,
| that farmers already fixed 4 months ago, turned into a global
| commodity panic that solved nothing
|
| > while a very real shipping problem continues to threaten
| people's lives.
| Ancapistani wrote:
| > The war in Ukraine, amplified by the West's anemic and at
| best useless sanctions, have likely led to a famine which will
| effect millions of people.
|
| I'm the _last_ person to defend the actions of states, but I
| don't see an obvious way the "West" - meaning the
| US/NATO/Europe - could have responded in a way that avoided
| this once it began.
|
| > I'm sorry to be so cynical about this, but it has been like
| watching a slow motion, unending train wreck see the last year
| of foreign policy nightmares coming out of The United States.
|
| Sigh. After regretfully defending the actions of states, I now
| find myself in the same position with regard to Trump. Trump's
| foreign policy - as odious as many people found it at the time
| - seems to have been quite effective at promoting international
| stability. I'll point out that it was in place for less than
| four years, so it's a fair criticism to say that this may have
| been at most a short-term condition, but... we didn't face the
| real possibility of global thermonuclear war during that time.
|
| > Our foreign policy laziness/ineptitude has led to a situation
| where the leader of a nuclear armed, hostile superpower
| (Russia) has two choices: win his war against the west, or die.
|
| I'll take issue here. Russia's actions - specifically, Putin's
| actions - have lead to this choice. Putin committed Russia to a
| war that was obviously going to be uniformly denounced by the
| international community. The invasion of Ukraine was poorly
| planned, poorly supplied, and had no reasonable victory
| condition. It was predicated upon the rapid collapse of the
| Ukrainian state. There was no fallback plan for how to handle
| things if it didn't crumble in a matter of hours or days.
|
| I can consider the argument that our foreign policy set up the
| preconditions to allow Putin to be so completely reliant upon
| his own biased perspective, but I really don't think that holds
| water. If his perception of the Ukrainian state and people were
| so far removed from reality, who is to say that his perceptions
| of our foreign policy wouldn't be similarly warped?
|
| > these absolutely idiotic sanctions we are imposing on Russia
| will lead to none of our stated foreign policy goals, and only
| suffering for the poor.
|
| I disagree here.
|
| The sanctions will lead to moving toward our FP goals _and_
| suffering of the poor.
|
| We don't like to be so blunt about it, but the fact is that the
| very intent of sanctions are to cause people who are otherwise
| uninvolved to suffer. The idea is that those uninvolved people
| will then be incentivized to _become_ involved, disrupting the
| political and economic support of the target.
|
| In other words... the purpose of these sanctions is to cause
| suffering among the Russian people, which in turn will make it
| more difficult for the Russian state to pursue military action.
| Given time, sanctions can even ignite revolution.
|
| Finally: you're 100% correct to say that Putin has no good
| options at this point. "Win or die". Sanctions, long term, will
| ratchet that pressure up further and further until he is forced
| to make a choice. Forcing Putin to decide between losing and
| taking everything else down with him may not be in the best
| interests of the world...
| sreejithr wrote:
| > these absolutely idiotic sanctions we are imposing on
| Russia will lead to none of our stated foreign policy goals,
| and only suffering for the poor.
|
| I agree. Sanctions won't work till everyone applies it.
| Currently only the Anglosphere, Europe, Japan and SK are
| parties. That's far from the whole world.
|
| Countries like India, African countries etc who aren't as
| privileged as the West may not be interested in sanctions
| when they have billions to feed.
|
| And applying secondary sanctions on poor people is cruel and
| would eventually lead to distrust in USD and the western
| order which is already at its weakest. For eg, can you apply
| sanctions on crisis-hit Srilanka when the country is broke to
| the point of starvation?
|
| This is NOT good for US hegemony. It will lead to a multi-
| polar world. If China/India can offer an alternative without
| the sanctions minefield, the poor countries would take it.
| randomdata wrote:
| If we use price as a proxy for wheat availability, let's not
| forget that wheat was trading for under $5 in 2019. It was up
| to $8 before the war began. Now, close to $10. Which means that
| the war has made wheat 25% harder to come by, so to speak, when
| compared to before the war, but the pandemic and all that's
| related to that had already made it 60% harder to come by. The
| war effects would have been less noticeable if we weren't
| already pushing the limits.
| JoeAltmaier wrote:
| Gee and here I thought it was Putin who was dropping bombs.
| It's inconceivable he could just stop doing that? And go back
| to doing business peaceably?
|
| It's not "Win or Die" for Russia. Anything but. It's one man's
| ego, and even Russians recognize that.
|
| To assume only the US has any agency and only US actions make a
| difference, inevitably results in "The US is at fault for
| everything"
| Ancapistani wrote:
| > It's not "Win or Die" for Russia.
|
| Perhaps it's not "win or die" for Russia, but it is for
| Putin.
|
| If you asked the average Russian on the street, they would
| probably agree that those are separate entities. If you asked
| Putin, I suspect you'd get a different answer.
| ElectricalUnion wrote:
| > It's not "Win or Die" for Russia.
|
| It took the US more that 8 years to retreat from Iraq, and
| you're asking a poor country to do such thing immediatly?
|
| The genie is out of the bottle, I don't think the west will
| suddenly drop all sanctions, pretend nothing happened, and
| resume business even if such never-seen-in-history retreat
| happens.
| 01100011 wrote:
| I read this thread a couple days ago and managed to get through
| it despite the annoying tone.
|
| I think the author is correct now (for the current and upcoming
| crops) but I worry they're failing to account for larger systemic
| issues like fertilizer price spikes (and yes I read their
| fertilizer thread as well), currency issues (inflation, logistics
| of precursors) and while they acknowledge the shipping issues can
| kill people they sort of hand wave over it.
|
| I'll admit I'm old and generally just get mad at ideas that
| challenge my assumptions, but after reading this I'm not ready to
| believe everything is fine. You have a country torn apart by a
| war that seems far from over, massive reorganizing of the global
| supply chain to cut out Russia, and world economic instability as
| we seemingly hasten the weakening of the USD. The author raises
| good points but I don't believe everything is fine.
| snowwrestler wrote:
| The author does not say everything is fine, she says the public
| focus is in the wrong place. We don't need more wheat, we need
| changes in shipping. We need to fund logistics, not planting.
| FrenchAmerican wrote:
| Or maybe we need to stop relying on globalized markets for
| vital production.
|
| A country is really sovereign if it produces enough food for
| its own population.
|
| One of the main reason of the food dependency of Northern
| African countries is ... the EU policies.
|
| Huge amounts of public money are given to farmers each year
| so that their selling prices are competitive on the global
| markets.
|
| Those global prices are lower than local production cost in
| Northern Africa.
|
| So the European Union basically made these countries
| dependent through its agriculture policies.
|
| Egypt has also a very large population for its very limited
| arable soil. But Algeria, Tunisia, Morocco have plenty land
| and water enough to feed their population. And yet they are
| dependent on food importations to survive.
|
| So the Egyptian case is specific and hides a larger truth.
| Many West African countries are dependent as well to
| subsidized European meat. Local farmers can't compete.
|
| Each country should be allowed to put tariffs on food
| importation high enough so that local production is enough to
| feed the country.
|
| The USA, Brazil, Argentina, Australia, New Zeland, Ukraine,
| Russia and the EU just won't allow it.
|
| The EU put a large fight to protect its farmers against
| competition from the aforementioned countries. And that was
| and still is a good strategy. But it goes too far, as
| described before.
|
| We need to stop building such a fragile global economic
| system. Free markets are simply NOT efficient to ensure
| access vital goods and services.
|
| Self-sustainability for vital needs should be a priority, at
| a minimum on the country scale, but the smaller scale
| possible is always preferable: that's resilience, hence
| sovereignty.
|
| Food, water, shelter, security... and love are the humane
| true necessities. A country should be able to guarantee this
| to its population, whatever happens : large war, pandemy,
| unseen solar eruption that kill most electronic devices,
| extreme and unseen natural disaster due to climate
| dereliction.
|
| We are not ready to face uncertain times.
| unknown_apostle wrote:
| War ain't over. Next week I'm going to plant a few rows of
| potatoes as a supporting food.
| omgJustTest wrote:
| bgroat wrote:
| I thought the primary issue was lose of oil-based fertilizers
| impacting the magnitude of the crop everywhere else in the world.
| cies wrote:
| News is just a shock. Get scared and embrace for impact: people
| that do so will not question why prices rise and shelves are
| empty.
|
| Much of the recent crude price increase happened before "the war"
| started. Still the war gets blamed.
|
| https://oilprice.com/oil-price-charts/
| VLM wrote:
| The point is the economy is currently based on something hits the
| news, hoard hoard hoard, price explodes, empty shelves and high
| profits.
|
| Happened to TP a couple years ago and is in process with
| microcontroller chips and will be happening soon with food.
|
| People hear story on news, think there will be empty shelves, buy
| a multi-year supply of boxed Mac n Cheese, the shelves are indeed
| empty, more people think there will be more empty shelves,
| repeat.
|
| I know a small time ham radio kit mfgr whom bragged about blowing
| the cost of a new house on a shipping pallet of '328 chips
| because he has to secure his supply chain if he wants to eat and
| everyone knows the shelves will soon be empty. Of course that has
| three effects: He has to store and finance a four year supply of
| chips, he total wiped the supply in his home country so nobody in
| that country can buy a '328, and he's stuck using a 2009-era chip
| until at minimum 2024, when his competitors will be shipping
| products based on early 2020's chips. On the positive side he
| gets to eat while competitors whom didn't hoard can't ship
| product. Of course the only reason there is a shortage is because
| he cornered the market before someone else did it.
|
| I absolutely guarantee we have more than enough wheat to continue
| to set new record levels of obesity; while I also guarantee there
| will be empty food store shelves in the near future.
| Stevvo wrote:
| Absolutely, and it's not just limited to wheat; prices are up
| across the board even in industries with very little presence
| in Ukraine or Russia.
| groby_b wrote:
| > The point is the economy is currently based on something hits
| the news, hoard hoard hoard, price explodes, empty shelves and
| high profits.
|
| Given that that extends well beyond individual behaviour (Wheat
| futures[1] are currently bonkers), this raises the question if
| the claim that "capitalism is the optimal way to allocate
| resources" is really true at least for the current version of
| capitalism.
|
| This extends well beyond wheat. Market behavior is often
| _completely_ irrational, for extended periods of time. The idea
| that "all information is priced in" extends to entirely made
| up information of any kind, which, given technology's ability
| to proliferate information, now means it often outnumbers
| actual information significantly.
|
| This means that the markets often don't reflect a fair price
| for the product any more. They instead show a price that is an
| excellent representation for human emotions around the product.
|
| That does not seem a sustainable principle, in the long run.
|
| I wish I could close with a lovely "and here's how we fix that"
| paragraph, but it's a problem that leaves me stumped.
|
| [1] https://www.cnbc.com/quotes/@W.1
| tyrfing wrote:
| Why is the "fair price" not significantly higher than it was
| 2 months ago, for short-dated futures? Supply is temporarily
| disrupted, all input costs are significantly higher, and it's
| a very inelastic market because elasticity comes from mass
| starvation. You can say the move was an overreaction - but
| it's pricing in many unknowns, the probability of which are
| certainly not zero. What if Russia banned all grain exports,
| for example?
| throwaway6532 wrote:
| I guess markets are functional proportional to their level of
| certainty with respect to future events. Information is a
| reduction in uncertainty, so if you are missing information
| you need in order to make pricing decisions because it's at
| this stage unknown, then you have no rational basis of which
| to act, but since you still need to act the only way to do so
| is irrationally. Makes perfect sense to me.
|
| TL;DR sometimes markets fail. Also all complex systems are
| nearly always in a state of partial failure. Economy is no
| different.
| imtringued wrote:
| >Given that that extends well beyond individual behaviour
| (Wheat futures[1] are currently bonkers), this raises the
| question if the claim that "capitalism is the optimal way to
| allocate resources" is really true at least for the current
| version of capitalism.
|
| It works, if the good in question is not needed to satisfy a
| basic human need. It also works, when the good in question
| can be produced so that everyone has enough.
|
| It doesn't work, if there is a sudden temporary loss of
| production capacity or if the production capacity can never
| catch up to demand (think how we can't make more land, it's
| already there).
| kqr wrote:
| Note that derivatives like futures add additional layers of
| emotion over the cash market.
|
| In the cash market, prices are generally set to match supply
| and demand of the actual physical thing. Supply is what it
| is, and demand can go crazy in mysterious ways.
|
| In a derivatives market, prices reflect the supply and demand
| of _promises and expectations_ of the physical thing. You 're
| buying and selling a completely abstract entity only loosely
| coupled to the physical thing. Here both supply and demand
| are driven by all sorts of mysterious whims.
|
| Not to mention that derivatives markets tend to be designed
| for speculation.
| s1artibartfast wrote:
| >this raises the question if the claim that "capitalism is
| the optimal way to allocate resources" is really true at
| least for the current version of capitalism.
|
| It is important to remember that economic supporters of
| markets don't claim that the markets are always rational in
| the short term. Corrections and irrational behavior expected.
| groby_b wrote:
| Yes - but we're currently in a situation where
| irrationality absolutely dominates. (And it's not exactly
| short term)
| s1artibartfast wrote:
| Yeah, I agree that irrational behavior sucks. But this
| brings us full circle to your OP, and the lack of a
| better alternative.
| brian_cloutier wrote:
| You seem to be claiming that the prices of many different
| assets are largely divorced from fundamentals.
|
| I'm willing to believe you, what you're saying is
| plausible, but I apparently haven't been looking at the
| same data you've been looking at.
|
| Do you have examples of some prices you think are
| bonkers, and reasons why they're bonkers?
| nradov wrote:
| The difference is that unlike microchips, wheat can't be stored
| indefinitely. Eventually it rots. And reserve storage capacity
| is very limited; they have to make room for the next crop. The
| worldwide wheat market is huge and fragmented so no one can
| really corner the market through hoarding. An electronics
| manufacturer might not be able to easily substitute a '328 for
| another microcontroller, but an Egyptian baker can easily
| substitute French or Indian wheat for Ukrainian wheat as long
| as the transport can be worked out at a reasonable cost.
| JumpCrisscross wrote:
| > _unlike microchips, wheat can 't be stored indefinitely_
|
| I'm actually unsure which depreciates quicker: wheat or
| silicon? On one hand, wheat is perishable. On the other hand,
| silicon becomes obsolete.
| syntheweave wrote:
| What we know says that obsolete silicon trickles down to
| poorer countries, e.g. the early 8-bit microcomputers saw
| continued use in the former Soviet states into the
| mid-1990's, a full decade after obsolescence had started to
| hit in North America with the introduction of 16-bit
| machines.
|
| Of course, there's some leapfrogging that also takes place.
| Most of Africa jumped straight into adoption of mobile
| phones without really going through an era of cheap
| consumer micros.
| Wohlf wrote:
| Well the PS4 was released in 2013 and still plays modern
| games, sure they could look better and run faster but it
| gets the job done.
| JasonFruit wrote:
| Wheat properly stored keeps for at least thirty years without
| noticeable degradation[0]. I'm not sure how easy that is at
| scale, but on first glance it seems not impractical.
|
| [0] https://extension.usu.edu/preserve-the-
| harvest/research/stor...
| nradov wrote:
| It's easy to store small quantities of wheat for years at
| home, but that's irrelevant to this situation. We're
| talking about grain elevators and warehouses.
| JasonFruit wrote:
| I'm not convinced that an airtight grain storage facility
| filled with carbon dioxide is impractical. A quick search
| turns up several manufacturers of airtight grain silos.
| littlestymaar wrote:
| In fact, you don't even need the silo to be air-tight:
| moisture is the enemy. If you can keep you silo dry
| (including when air temperature change, which is really
| the only challenge you would face, for example in the
| ancient world), you're good[1], it won't rot.
|
| Humans have known how to keep wheat for several millennia
| !
|
| [1]: at least if the goal is to eat the wheat. Replanting
| the seeds will become much harder after time passes.
| littlestymaar wrote:
| These places have regulated hygrometry for exactly this
| reason.
| nradov wrote:
| The type of places at risk of food shortages don't
| necessarily have wheat storage facilities with regulated
| hygrometry. Developed countries will be fine, and have
| facilities for long term grain storage. It's the poorest
| countries that will be hit by rising wheat prices and
| intermittent shortages.
| paganel wrote:
| > What these places are facing is a SHIPPING shortage.
|
| > Not a lack of enough wheat in the world.
|
| That doesn't make it any better, most of the famines that took
| place before the industrial revolution happened because of
| transport shortages, sometimes a certain part of a kingdom would
| experience famine while another one, located at the opposite
| geographical end, would have been just fine.
|
| Now, it depends how fast and if those transport/supply issues can
| be solved in a reasonable amount of time, I would imagine this is
| not as simple as firing up a new instance on AWS (let's say) if
| the instance you had on Azure had died out.
| SnowHill9902 wrote:
| So?
|
| - Even if it's true now, a conflict zone is extremely high risk.
|
| - Prices can move a lot when supply changes by 1% depending on
| market depth and bid/ask curvature.
| firstSpeaker wrote:
| Reading this made me very happy. I was seriously scared and low
| thinking about 25% shortage of wheat. I hope this closer to
| reality than the 25% claim(short term considering fertiliser
| supply issue in the future?). This is the type of news I hope to
| read more often these days.
___________________________________________________________________
(page generated 2022-03-31 23:02 UTC)