Valuetainment - November 13, 2023


The Global Food Shortage： Can We Prevent a Hunger Crisis？

Topics
fertilizer prices
Hosted by
Patrick Bet-David
Mentioned
Ray Massey Nitrogen
Florida Insurance Rate Hike Crisis - BlackRock’s ESG Influence Causing Industry Exodus？ How To Raise Smart Kids Who Are Aware of Cyberbullying

Episode Stats


Length

12 minutes

Words per minute

210.34

Word count

2,621

Sentence count

242

Harmful content

Misogyny

2

sentences flagged

Hate speech

7

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

The World Food Program estimates that by 2023, there will be a shortage of wheat and corn around the world. Why is there a global food shortage? What does it have to do with the price of fertilizer and what does it take to make it? And where do we buy it from?

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
Topics generated with Qwen2.5-3B-Instruct.
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.000 When's the last time you heard the phrase food insecurity?
00:00:02.600 In other words, food shortage.
00:00:04.020 If you live in America, you're thinking to yourself, food shortage in America?
00:00:06.860 I can go anywhere fast food.
00:00:08.200 I don't have to worry about this stuff.
00:00:09.340 Why should I even spend time learning about food insecurity?
00:00:12.120 Here's why.
00:00:12.580 Because in the last three years, when it comes down to how many people can't find their next meal,
00:00:18.060 according to World Food Program, 345 million people worldwide do not know where their next meal is going to come from.
00:00:25.380 So you may say, what's the big deal about 345 million?
00:00:27.860 Here's what's the big deal about it.
00:00:28.840 It's doubled, not in 20 years, not in 10 years, not in five years.
00:00:33.580 It's doubled in three years.
00:00:35.140 And why is this important?
00:00:36.520 What does it have to do with the price of fertilizer?
00:00:38.920 And what does it take to make fertilizer?
00:00:40.820 Nitrogen, phosphate, and you have potash.
00:00:43.080 Who has that?
00:00:43.980 Where do we buy that from?
00:00:45.060 Does this have to do anything with Belarus, Russia, Ukraine?
00:00:48.180 Is that why this is taking place?
00:00:49.580 Are wars hurting this?
00:00:51.220 Wait till you see some of this data here, but it's something you need to know about.
00:00:53.880 And I'll give you the last thing to be thinking about before we get into the episode.
00:00:56.420 An article just came out a couple days ago.
00:00:58.600 The most expensive Big Mac meal you want to buy in America at a Connecticut McDonald's, it's over $18.
00:01:05.580 The combo ends up costing that person buying it roughly $21.
00:01:09.760 So you may want to learn a little bit about this food insecurity because what it takes to make it could affect the states.
00:01:15.100 Okay, so if you get value out of this video, give it a thumbs up and subscribe to the channel.
00:01:18.580 Let's get right into it.
00:01:19.500 70% of the world's hungry people living in areas afflicted by war and violence.
00:01:26.540 70%.
00:01:26.980 Now, let's go a little deeper.
00:01:28.440 Since the beginning of the Russian invasion of Ukraine in February of 2022,
00:01:31.780 Ukrainian exports of grain have been severely disrupted for over four months.
00:01:36.260 Russian military vessels blocked Ukrainian ports in the Black Sea.
00:01:40.020 Between July 22 and July 23, there was an agreement between the United Nations, Turkey, and Russia to allow exports via a safe maritime humanitarian corridor in the Black Sea.
00:01:50.240 Over a thousand ships full of grain and other foodstuffs left Ukraine from three Ukrainian ports during the implementation of the initiative.
00:01:58.780 On July 17th of 2023, Russia announced its decision to end the Black Sea grain initiative.
00:02:04.600 So meaning, they were not letting them out, then you can, then all of a sudden they're like, nope, you can't do this, we're putting a stop to this.
00:02:10.640 And this affects everybody because they're one of the biggest exporters of that product, as you see here shortly.
00:02:16.300 Russia and Ukraine together accounted for one-third of the world's global wheat trade, 17% of global maize trade, and almost 75% of global sunflower oil trade.
00:02:25.540 And prior to Russia's invasion, Ukraine provided 11% of the world's wheat and 17% of corn.
00:02:30.240 So, since the invasion, the average price of shipping agriculture products increased from $30 to $200 a ton.
00:02:37.520 That's 7x in two years, less than two years.
00:02:40.800 7x in less than two years.
00:02:42.420 February 24, 2023, U.S. Department of Agriculture estimates that exports of wheat in the past six months have been approximately 37% lower than the prior year.
00:02:50.880 Now, this is important because exporting matters to us.
00:02:53.620 Exporting matters.
00:02:54.380 There's certain products we don't have in America that we need from others, right?
00:02:57.240 Watch what China is doing.
00:02:58.220 China's maintaining its food stockpiles at a historical high level.
00:03:02.080 Why is China hoarding their stuff? 0.97
00:03:03.460 Why do they not want to play ball with other people?
00:03:05.660 They're picking things up, but they're hoarding on everything else.
00:03:08.320 The WFP predicts that by 2023, there would be a shortage of wheat and corn, which are the two staple products in the food supply chain.
00:03:15.560 The reports also estimate that these global food shortages will increase food prices and even trigger a new global recession.
00:03:21.220 And if we look at the list of countries with bans on food exports, this is what you would see.
00:03:25.760 Argentina on soybean oil and soybean meal.
00:03:28.520 This man expires December 31st.
00:03:29.760 Algeria, you got pasta, wheat derivatives, vegetable oil, and sugar.
00:03:34.300 Egypt, you got vegetable oil.
00:03:35.740 You got wheat, flour, oils, lentils, pasta, beans.
00:03:38.580 India's got wheat.
00:03:39.580 Indonesia's got palm oil and palm kernel oil.
00:03:42.300 Iran's got potatoes, eggplants, tomatoes, onion.
00:03:44.980 Kazakhstan's got wheat, wheat flour.
00:03:46.520 This keeps going over.
00:03:47.720 And all these other places, Kosovo, Turkey, Ukraine, Russia, which has got sugar, sunflower, wheat, meslin, rye, barley, maize.
00:03:55.120 Serbia's got wheat, corn flour, oil, Tunisia, Kuwait.
00:03:58.580 So do you remember earlier when we talked about the black seed grain initiative between Russia and Ukraine, where it's like, hey, we got to get kind of the exporting going again?
00:04:04.880 If you look at this chart here, this shows you what was going on during Russia's invasion of Ukraine.
00:04:10.740 Look at the left and you'll see green is grains and oil seeds and you'll see blue is wheat.
00:04:15.560 Look what happened to the prices, how quickly it went up from $2.20 all the way up to $3.60 or from $2.60 all the way up to $3.40.
00:04:24.160 This is not good for everybody else.
00:04:25.980 And then they come up with a deal.
00:04:27.500 Once they come up with a deal, what happens to the prices with the black seed grain initiative?
00:04:30.820 It decreases, decreases, decreases.
00:04:32.560 And what does Russia do on July 17, 2023?
00:04:34.980 They end the initiative.
00:04:36.100 If you look at trends, these numbers should be going back up here shortly as well because of the initiative ending.
00:04:42.920 So, look, I've been in the financial industry since 9-11, the day before 9-11.
00:04:46.520 And I've owned stocks, bonds, mutual funds, real estate, crypto, gold, you name it, I've owned it.
00:04:51.180 But the one thing that's a very important part of my portfolio all these years is gold.
00:04:56.040 I love having a percentage of my net worth in gold that I have access to in case of many different things.
00:05:02.180 A few facts you need to know about gold.
00:05:03.620 Number one, the gold market cap is $11.8 trillion.
00:05:07.580 Since 2000, the compound annual growth rate for gold has been 9.24%.
00:05:14.080 And during times of high inflation, 3% plus has been 15.35%.
00:05:19.460 Now, those are just some numbers for you, but there's some other benefits to add gold to your portfolio.
00:05:24.160 Number one, hedge against inflation.
00:05:26.220 Number two, results showed recently that 93% of central banks are working on a CBDC.
00:05:31.820 So, this means what?
00:05:32.540 That could be a manipulated currency that they own.
00:05:35.220 If you own gold, it's a non-duplicatable asset.
00:05:38.360 You're now hedging against CBDC taking place.
00:05:41.460 Number three, a potential cyber threat.
00:05:43.520 If it happens, you don't have access to your money, you don't have access to your accounts,
00:05:46.700 well, you have access to your hard physical gold.
00:05:49.020 Number four is anonymous.
00:05:50.320 No one knows you have that gold.
00:05:51.480 And last but not least, diversification.
00:05:53.220 That's why we chose to work with our new sponsor, American Hartford Gold.
00:05:57.140 If you have retirement funds that you cannot afford to lose,
00:05:59.420 American Hartford Gold will ship physical gold or silver directly to your door.
00:06:03.540 Also, if you have retirement funds that you can't afford to lose,
00:06:05.880 now is the time to call American Hartford Gold, a precious metal dealer you can trust.
00:06:10.720 They have the finest products, amazing customer service, and a buyback commitment.
00:06:14.640 They've earned a five-star rating from thousands of reviews and an A-plus from the Better Business Bureau.
00:06:20.000 Tell them I sent you and they'll send you up to $5,000 worth of free silver on your first order.
00:06:24.200 So, click on the link in the description or call 866-939-6984.
00:06:28.980 Again, 866-939-6984.
00:06:33.460 So, on top of that, the other thing we need to look at is fertilizer price.
00:06:36.860 Why are prices of fertilizers going up?
00:06:38.720 Why do many farmers in America, why can't they afford to buy fertilizers to produce more food?
00:06:43.320 They need that.
00:06:44.040 If they don't have fertilizer, they can't produce it. 0.72
00:06:45.980 So, where's the holdup?
00:06:46.760 Look at this chart here.
00:06:47.620 Look at pricing.
00:06:48.260 2019, less than $100.
00:06:50.020 2020, less than $30, $40.
00:06:51.880 2021, there was moments it hit super, super low.
00:06:55.560 2022, and then today, $157 is what we're looking at compared to where we were before.
00:07:02.020 And these prices are not necessarily slowing down anytime soon.
00:07:04.900 So, where does fertilizer come from?
00:07:06.260 One is nitrogen, which is primarily produced in the U.S.
00:07:09.040 It only takes natural gas, and we've got plenty of it.
00:07:11.700 Says Rule, adding that there are significant nitrogen production plants scattered throughout the Midwest,
00:07:16.720 Southern Plains, and Gulf Coast areas.
00:07:18.400 So, one way to see it is it's got a correlation with gas prices, natural gas prices.
00:07:22.580 If gas prices go up, nitrogen is going to go up because they kind of correlate with each other.
00:07:26.580 So, you may say, Pat, who cares if we can do it ourselves?
00:07:28.920 Why are we worried about nitrogen?
00:07:30.220 Well, I'm just telling you, that's one area where we're okay with.
00:07:32.520 Because if you look at these charts here, here's what you'll notice.
00:07:35.240 China's first, by a mile. 0.98
00:07:37.100 Then it's us.
00:07:37.760 Then India, Russia, Indonesia, Egypt, Canada, Pakistan, Iran, and others.
00:07:41.460 So, let's look at the second one, which is phosphate.
00:07:43.020 The majority comes from Florida, with a small volume imported from Saudi Arabia, Israel, and Jordan,
00:07:49.420 countervailing duties on Morocco and Russia have slowed imports from those countries.
00:07:54.280 And if we look at the leader's bulletin on phosphate, here's what you'll notice.
00:07:57.440 China is first. 1.00
00:07:58.440 U.S. and India are pretty much tied.
00:07:59.860 Then it's Russia, Morocco, Brazil, Saudi Arabia.
00:08:02.320 However, when we look at potash, this is the problem.
00:08:05.440 90% of the potash that's used in the Midwest comes from Canada on rail cars.
00:08:10.260 Only three countries in the world have significant amounts of potash.
00:08:13.640 Canada, Russia, and Belarus.
00:08:15.600 Matter of fact, if you look at the leader's bulletin here, here's what it looks like.
00:08:18.280 Number one is Canada.
00:08:19.920 Then it's China.
00:08:20.740 Then Russia.
00:08:21.720 Then Belarus.
00:08:22.680 Then Germany, Israel, Jordan, Chile, Laos, Spain.
00:08:25.520 On some lists, we're 11th.
00:08:26.780 On some, 15th.
00:08:27.720 On some, 13th.
00:08:28.540 But we're not even in the top 10.
00:08:29.880 So, notice the chart I just showed you.
00:08:31.540 It shows China as second, right? 0.98
00:08:33.100 But if we go to 2021, right before the war, look what China looked like.
00:08:37.100 On this chart here, this is 2021 number.
00:08:39.340 First place is Canada.
00:08:40.460 Then it's Russia. 0.58
00:08:41.560 Then it's Belarus.
00:08:42.360 Then it's China.
00:08:43.240 What's the problem?
00:08:44.380 Belarus and Russia ain't doing anything right now because of the war.
00:08:47.500 So, that's why China just, boom, bumps the other two out and goes to second place. 0.80
00:08:51.540 This is why the Russia-Ukraine is causing food insecurity in different parts of the world. 0.94
00:08:56.880 So, now, this gets you thinking about farmers' finances on the line.
00:08:59.840 Because at the end of the day, they need to get to work.
00:09:01.740 They need to be able to make money.
00:09:02.840 If there's no incentive for them, why are they going to do what they're going to do?
00:09:05.100 And they need money to go buy this stuff to produce what they're producing, right?
00:09:08.180 A report from the University of Missouri found that the net farm income in the state is projected to decrease by 14% this year.
00:09:16.360 And the U.S. Department of Agriculture anticipates national farm income to fall by 19%.
00:09:21.780 Meanwhile, farmers' input costs have increased.
00:09:24.060 You ready?
00:09:24.800 Since 2020?
00:09:26.480 55%.
00:09:26.920 That's a lot of money.
00:09:28.320 55% it's increased.
00:09:30.680 So, to break down that increase, here's what it looks like.
00:09:33.060 Fertilizer accounts for about a third of those annual costs.
00:09:35.680 And it now costs farmers nearly 73% more than it did in 2020.
00:09:39.600 But farmers continue to buy because they don't have a choice.
00:09:42.560 It offers a good return on investment, said Ray Massey, a professor in MU's College of Agriculture, Food and Natural Resources.
00:09:48.580 So, if you're watching this saying, man, these guys are getting killed in America.
00:09:51.540 But that's because they have the dollar.
00:09:52.880 Imagine other countries where their currency is getting devalued month after month after month.
00:09:57.580 Imagine what they're dealing with.
00:09:58.720 Their numbers are not 73%.
00:10:00.120 It's much more than 73%.
00:10:01.820 This is an America we're talking about.
00:10:04.100 So, the second factor for food insecurity is drought.
00:10:06.620 South America is experiencing a severe drought for the third consecutive year, the worst in a century, primarily due to the La Nina phenomenon that has persisted since 2020.
00:10:15.600 The countries most affected are those produced. 0.75
00:10:17.800 A significant amount of food for the world.
00:10:19.660 Argentina, Brazil, Paraguay, Uruguay.
00:10:21.320 In 2021, these four countries accounted for approximately 13% of the global food and fiber exports.
00:10:27.860 And they lead the commercialization of soybean, soybean meal, and pellet soybean oil, frozen, cellulose, cane sugar, poultry, and coffee, and account for a significant share of the global supply of wheat, fish fillets, pork, chilled beef, wine, fruits, and fruit juice.
00:10:41.620 Next factor, which we love, but it's a problem.
00:10:43.800 Why?
00:10:44.180 Just-in-time.
00:10:44.760 You've heard of just-in-time before.
00:10:46.140 It's a great thing, but there's some problems behind it.
00:10:48.360 Let me explain.
00:10:48.880 A just-in-time inventory system is a management strategy that has a company receive goods as close as possible to when they are actually needed.
00:10:56.240 This inventory system minimizes inventory and increases efficiency.
00:10:59.340 This allows manufacturers to not be left with unwanted inventory if an order is canceled or not fulfilled.
00:11:04.440 For just-in-time manufacturing to succeed, companies must have steady production, glitch-free planned machinery, and reliable suppliers.
00:11:10.180 Look, there's a lot of pros.
00:11:11.560 Obviously, it's got a lot more pros than cons.
00:11:13.060 But when we have an inventory issue or ships are getting stuck at Panama Canal because they have problems or it's going to take long time, this is problematic for that, and that's the season today.
00:11:22.660 So the just-in-time is great.
00:11:24.540 When everything is moving smoothly, it's not doing it today.
00:11:27.780 So, look, final thoughts on this topic here.
00:11:29.540 Am I sitting here telling you to go, you know, stockpile a bunch of food and just kind of be worried about the world coming to an end?
00:11:35.280 U.S. is probably going to be the last country that's going to, you know, feel the residual effects of this.
00:11:39.300 But should you be prepared for it?
00:11:41.260 Yeah, probably.
00:11:42.200 I've been in the insurance industry for over 20 years.
00:11:44.140 Everything to me is in case.
00:11:46.320 Buying insurance policy in case.
00:11:48.340 Auto insurance policy in case.
00:11:50.260 All of these things are in case.
00:11:52.200 Water, dried food, canned food.
00:11:54.160 Look at the expressions.
00:11:55.020 There's plenty of companies that offer you to have this stuff in case something were to happen.
00:11:58.720 If you can't afford to do that, you ought to consider doing that.
00:12:01.240 It'll be a long time until the U.S. gets affected by this.
00:12:03.820 Monetarily, we will be.
00:12:04.800 But in a way where you're going to be not knowing how to find your next meal, not going to happen anytime soon in the States.
00:12:09.760 If you got value out of this video, give it a thumbs up, subscribe to the channel.
00:12:12.460 One thing that gives me a lot of confidence about the future, it may not be a concept you know a lot about.
00:12:18.300 Maybe you've not heard a lot about it.
00:12:19.640 Musk's brother was participating in this thing.
00:12:21.560 It's called Vertical Farming.
00:12:22.760 If you've never seen the video we did on Vertical Farming, click here to watch.
00:12:26.520 I'll take care, everybody.
00:12:27.280 Bye-bye, bye-bye.