January 26, 2024

Massive protests of farmers in France are making headlines around the world, but there is a growing sense of crisis within the farming community worldwide.

• Canada-UK free trade deal is in limbo over food tariffs
• the slowdown in global trade is expected to push costs of imported food up significantly, which may even significantly affect inflation.
• the world trade in natural gas which is the main power/source for industrial fertilizer has put another pressure on costs for farmers. Biden cancelled export licenses for LNG temporarily, increasing price pressures on the super-cooled gas. Investments for alternative to using LNG has not materialized and demand is expected to grow steadily (see below)
• Farming is incredibly subsidized, but inflation has eaten away those subsidies meaning the costs are being paid by farmers who barely make any money
• The US farm bill is up for debate in the US as major agricultural industries question the math on investing in expanding food production.

• Discounts on expiring food items are all the rage across the world. Tech is even investing in helping consumers find soon-to-expire food to reduce costs of labelling in super markets (i.e., paying workers to do this).

  • Loblaws had to backtrack on increasing food prices of soon-to-expire and expired foods after a major consumer backlash of raising food prices. Its main concern is the cost of (re)labelling that food.
  • Food distributors won a change in regulation over best before and expired food labelling earlier in the year to increase its profit margins. But, because of the current backlash has failed to implement their plan on raising prices.
• Europe is currently negotiating the price setting in their rather anti-farmer price-setting mechanism.

The issue with the above: populist right-wing parties are exploiting the cost/affordability crisis because liberal economists cannot figure out that the reason that things are expensive is because costs have gone up. Farmers are easy prey when it comes to this confusion because neoliberal anti-rural, anti food-subsidy policies have collapsed farmer support for centre-left political parties.

In France, the far-right is driving the bus on the politics blaming the central government for abandoning the agricultural sector.

Food will continue to be an issue this year as input prices from last year make their way through the system. Climate change and the inevitable increased costs of the inputs of food production means that we need to change the economics of food.

Shifts in agricultural production processes and funding are necessarily extremely slow. This is unfortunate because it has taken us 30 years to get into this mess and we do not really have 30 years to extract ourselves.

NASA predicted a very small asteroid impact in Germany. An achievement given our capabilities to track these exploding rocks that cause disruptions and damage.

This is just a reminder to keep your Friday in perspective.