An Intermittent Fasting 2023 - 2026

 Eating is a basic need, there is no doubt about it. Eating is one of the greatest motivators to action. More than once in our lives we have heard or even said something like: "If I don't work, I don't eat", or "I have to put bread on the table", or "I have mouths to feed".

Food safety is a constant concern for human beings. However, not everyone achieves that security in the world every day. 

According to a report by the Food and Agriculture Organization of the United Nations (FAO) (1), hunger increased in the world from 2019 (8.4%) to 2020 (10%), which is equivalent to more than 770 million people, mostly as a result of the pandemic.

As we already know, the pandemic kept most of the world locked up for many months, which led to the destruction of jobs and the stagnation of production and logistics processes. Many foods stopped being grown, processed or distributed throughout the planet. When people lost their sources of employment, they did not have money to buy food and, on the industry side, inputs began to be scarce and food transportation stopped complying with its distribution routes. 

The above is what we have experienced and that clearly explains the increase in world hunger, according to the FAO study.

During these more than two years, great efforts have been made by governments and institutions to return life to a normal rhythm, including mass vaccination, direct contributions of money to people, food distribution, the implementation of strict health protocols to avoid further infections.

Today, in theory, we should be on the path to an economic, industrial and logistical recovery that ensures that the number of hungry people in the world begins to recede.

However, this theory has several points against it, which are not easily understandable by people and which conspire against an economic, industrial and logistical recovery similar to the pre-pandemic numbers and ultimately endanger more people from experimenting famine for years to come.

The war between Russia and Ukraine

The war between Russia and Ukraine is having an impact on the prices of food and agricultural inputs (2), which have increased the prices of cereals and inputs such as fertilizers. 

Russia and Ukraine are among the top three exporters of wheat, barley, corn, canola and canola oil, sunflower seed, and sunflower oil. Russia is also among the largest exporters of fertilizers such as nitrogen, potassium and phosphorus.

Whether because Ukraine's fields are littered with anti-tank mines and cannot be harvested, or because international sanctions prevent Russia from selling its inputs, the result is that millions of tons of food and agricultural fertilizers began to run out of markets as starting February 24, 2022.

On August 1, it was possible for a ship with 26,000 tons of corn to leave the Ukrainian port of Odessa, this being the first cargo of grain to leave since the start of the war. 

Although this gave a glimmer of hope that millions of tons of grain stored in Ukrainian silos could eventually be exported, this is not going to happen. 

Even if the agreements are maintained between the parties, the cost of insurance to take a cargo ship to and from a Ukrainian port is so high that it is economically unfeasible for this example to be repeated often enough. Most likely, a good part of the 2022 crop will be lost. 

There are no signs that the situation in this region is going to change for the better, so it can be assumed that for at least a couple more years there will be no full harvest in Ukraine, nor will there be a relaxation of the sanctions against Russia.

Food Nationalism

A side effect of the war has been the rise of food nationalism in various countries such as Indonesia, India, and Malaysia, which, to avoid rising food prices and ensure domestic availability, have restricted or prohibited the export of wheat, sugar, beef, chicken and palm oil, among others. If prices remain high worldwide, it can be expected that more countries will take measures to restrict food exports in order to ensure food for their own population.

Oil and Gas

One of the most sensitive and fickle economic indicators is the price of oil. As expected, the price of oil and natural gas have risen after the start of the war in Europe. Russia is one of the largest producers of both commodities, so Western sanctions have generated a reduction in supply. Agriculture is a large consumer of oil and gas, from the tractor or combine in the field to the trucks or ships for transportation. It is therefore expected that these higher energy costs will be passed on to final consumers.

Extreme weather

Today the drought in China, Europe and eastern North America are making news, where forest fires proliferate and the low flow of important rivers such as the Yangtze, the Rhine and the Colorado. Thousands of cattle have died in the central United States, reportedly from extreme heat (3) and Hungersteine ​​or Hunger Stones (4) have washed up in riverbeds across Europe. In China they suffer a heat wave (5) that has stopped large factories due to lack of water for their industrial processes.

Environmental Policies

News comes from the Netherlands of the protests of farmers (6) who are demanding the government demand to reduce nitrogen oxide emissions on their farms by 40%, as part of the policy adopted by the signatories of the Paris Agreement (7) for the reduction of greenhouse gas emissions by 2030. 

Also, other large producers of legumes, cereals and grains such as Canada (8) have announced that they will begin to demand compliance with the rules of the agreement.

This policy requires a reduction in the use of fertilizers, which in turn reduces production per hectare, generating an economic impact that not all agricultural producers are in a position to assume, which is why many farmers in the signatory countries will be forced to reduce the number of hectares planted or stop planting their land, which is equivalent to bankruptcy.

Hunga Tonga-Hunga Ha'apai volcano eruption

The eruption of an underwater volcano does not seem to indicate anything related to food production, after all there have been other volcanic eruptions in recent years with no major disruption to the food chain that we know of. 

But the eruption of the Hunga Tonga-Hunga Ha'apai on January 15, 2022 has recently been classified as "one of the most explosive volcanic events of the Modern Era" (9).

Science tells us that large volcanic eruptions tend to cool the planet by injecting large amounts of volcanic ash, sulfur oxide, nitrogen oxide, and water vapor into the upper atmosphere, which can block the sun's rays for several years. 

The proven cases of temperature reduction are the eruptions of Tambora in 1815, -3°C, Krakatoa in 1883, -1.2°C and Pinatubo in 1991, -0.5°C.

This particular eruption was different, being an underwater volcano, it had the capacity to inject large amounts of water vapor, which is a greenhouse gas, into the atmosphere to the highest layers of the stratosphere, which can generate a initial cooling of the southern hemisphere of the planet, but during the next decade it could influence global warming.

Given this, it is possible that food production in the southern hemisphere, especially in large grain exporters such as Brazil, Argentina, Australia, New Zealand and South Africa, will be affected by lower production, for at least a couple of years.

Monetary Inflation

In the days following the fall of the North American investment bank Lehmann Brothers, the biggest bankruptcy in history, in September 2008, the United States Federal Reserve (FED) inaugurated the concept of Quantitative Easing (QE), which is another form of calling money printing. 

From December 2008 to October 2014, the Fed printed close to 4 trillion dollars, in addition to lowering interest rates to zero.

In 2020, with the declaration of a pandemic and the world coming to a standstill, both the Fed and other central banks around the world began another round of QE to finance the costs of fighting the virus. The Fed printed another 5.2 trillion for the case.

The definition of inflation is the increase in the monetary base, which is exactly what the Fed and other central banks have done during the pandemic. 

Today inflation hunts us again, and especially, it comes to impact the prices of essential goods such as food and energy.

The correct price of food is a key and vital factor for the proper development of society. If something destroys confidence in the currency in which the goods are valued, then we return to barter and a subsistence economy.

There are several geopolitical issues that could unravel the economic fabric, especially as the unipolar world of the United States faces off against claimants to the throne, China and Russia, understanding that to make progress, the latter two have to wage war against the US dollar and thus succeed in unseating it from its privileged position as the world's reserve currency.

As I commented a long time ago (10), there are many unresolved problems of the great actors, and we had to be spectators, trying to figure out what will we eat tomorrow.

Blessings,

Luis Leighton

(1) https://www.fao.org/3/cb4477en/cb4477en.pdf

(2) https://www.fao.org/3/cb9013en/cb9013en.pdf

(3) https://twitter.com/stillgray/status/1537217030843052033

(4) https://www.dw.com/es/hist%C3%B3rica-sequ%C3%ADa-en-r%C3%ADos-de-alemania-deja-al-descubierto-antiguas-piedras-del-hambre/a-62829385

(5) https://www.dw.com/es/china-vive-ola-de-calor-m%C3%A1s-intensa-y-larga-en-60-a%C3%B1os/a-62806148

(6) https://es.euronews.com/2022/07/04/el-sector-agricola-protesta-en-contra-de-reducir-las-emisiones-de-nitrogeno-en-paises-bajo

(7) https://unfccc.int/es/process-and-meetings/the-paris-agreement/el-acuerdo-de-paris

(8) https://agroavances.com/noticias-detalle.php?idNot=3983

(9) https://www.nationalgeographic.com.es/ciencia/hemos-asistido-a-mayor-explosion-tierra-era-moderna-y-no-sabiamos-hasta-ahora_18460#:~:text=Erupci%C3%B3n%20del%20volc%C3%A1n%20Hunga%20Tonga,15%20de%20enero%20de%202022&text=2022%2C%2017%3A10-,La%20erupci%C3%B3n%20del%20volc%C3%A1n%20submarino%20Hunga%20Tonga%2DHunga%20Ha'apai,ha%20confirmado%20un%20nuevo%20estudio.

(10) https://saludfinancierachile.blogspot.com/2011/06/advertencia-la-economia-mundial-esta_13.html