The cost of living is going nowhere but up. Everyone has been touched by skyrocketing inflation, high fuel prices, and the availability of certain supplies. And now, we’re facing a massive energy crisis. We’ve seen the signs for a while, as Fabian wrote last year in this article, but theory is quickly becoming reality.
Energy prices in Europe have catapulted to dizzying heights, leaving some folks facing bills of up to $10,000. And the United States is not untouched. Prices for power are already escalating here. Anecdotally, my own utility bill for September was double the price of my bill for August, and I used less energy. This upward trend is growing more common if my inbox is any indication.
But it isn’t just the price of essential utilities like heating and cooking that are going to be affected. The price and availability of food will be affected as well. We’re about to get handed a food crisis.
Manufacturers can’t afford to produce food.
All over the world, manufacturers are shutting down production to combat the price of energy. And in a world already seeing food shortages and empty shelves, this is a massive hit.
A source in Sweden tells me that two large greenhouses have said they’re shutting down production for the winter due to energy prices. And while I don’t have links for Sweden specifically, Reuters reports that other manufacturers in Europe are also doing this.
Across northern and western Europe, vegetable producers are contemplating halting their activities because of the financial hit from Europe’s energy crisis, further threatening food supplies…
Surging power and gas prices will impact crops grown through the winter in heated greenhouses, such as tomatoes, peppers, and cucumbers, and those which need to be placed in cold storage, such as apples, onions, and endives…
European farmers are warning of shortages. The anticipated hit to production and jump in prices means supermarkets may switch to sourcing more goods from warmer countries such as Morocco, Turkey, Tunisia, and Egypt.
Surging gas prices are the biggest cost vegetable farmers cultivating inside greenhouses face, farmers said. Meanwhile, two French farmers renewing their electricity contracts for 2023 said they were being quoted prices more than ten times those of 2021. (source)
A major supplier of canned goods and other preserved food in the Netherlands, HAK, has announced they’re shutting down production during the coldest part of the year due to energy costs.
HAK, a major seller of conserved foods such as peas, beans, and apple sauce in the Netherlands, is to temporarily halt production this winter due to high energy costs, with a spokesperson saying the pause would last six weeks from January.
According to Dutch Chamber of Commerce records, HAK and related companies had sales of 100.2 million euros ($98 million) and operating profit of 10.2 million euros in 2021.
“If companies have to sell under their cost price for months on end, then things will turn out badly,” NOS further quoted Hoogeboom as saying.
Earlier on Monday, the Union of Dutch Fruit and Vegetable Processors (VIGEF) called for the government to either impose a cap on gas prices, as Germany has done or offer support for companies.
“It’s of importance to do this in line with other countries around us, to guarantee the continued existence of this industry and its supply chain, and to ensure that healthy food from Dutch soil remains affordable and available,” VIGEF said.
Food packed in cans and jars is usually heated to help reduce the need for artificial preservatives.
In addition, VIGEF estimated that the cost of metal and glass used in such packaging has risen to 25-35% of its members’ costs, from 5%, while farmers are also struggling with higher fertilizer prices, among other rising costs.
“It is not possible to keep absorbing these costs,” VIGEF said. (source)
HAK spokespeople assured the public this wouldn’t lead to empty shelves. (Of course not.)
(Check out our free QUICKSTART Guide to building a 3-layer food storage system to learn how to give yourself a buffer against rising food prices.)
Will we be affected by a food crisis in the United States?
I fear that Europe is the canary in the economic coal mine. I think it’s only a matter of time before the United States sees the same thing. We’ve already gotten glimpses of a fertilizer shortage – The OP posted about it here back in 2021. This was worsened when Russia vowed to halt fertilizer exports.
But it goes much further than that. Resilience.org published an article about the big picture.
Food security is being threatened by problems with distribution chains for all the inputs into the agricultural system—from spare parts to packaging to cooking fuel. Once again, as with energy prices, there are several mutually interacting causes, including lingering effects of the pandemic and the Russia-Ukraine war. The latter has led to the loss of wheat shipments from Ukraine and Russia, which together are responsible for nearly 30 percent of world supplies. Recently, Russia has rained missiles on Odesa, a major port for grain shipments, further disrupting global food distribution.
Altogether, foods exported from Russia and Ukraine normally account for more than 10 percent of all calories traded globally. The two countries also export a significant portion of the world’s vegetable oils used in cooking and preparing food. As a result of the conflict, there are now shortages of sunflower oil in Europe, and supermarkets in the UK are limiting purchases of cooking oil.
Low-income countries that were already destabilized by economic havoc from the pandemic are seeing further shocks now from higher food prices. Egypt is considering raising the price of subsidized bread for the first time in four decades, even though the subsidy is widely credited with keeping social unrest at bay.
In the wake of the Russia-Ukraine war, dozens of countries—including Hungary, Indonesia, Moldova, and Serbia—have thrown up trade barriers to protect domestic supplies of grains, fruits, vegetables, cooking oils, and nuts. While these barriers are intended to protect domestic food supplies, their collective result is to put more pressure on global prices.
Of course, all of this added food insecurity comes as our weather becomes weirder year by year. China’s wheat harvest this season is uncertain due to extreme rains in recent months, and, with global wheat prices already up 80 percent, a lot is at stake not just for the world’s most populous nation, but also for integrated global wheat markets. Meanwhile, Somalia, which imports nearly all its wheat from Ukraine and Russia, is suffering its worst drought in years.
In sum, experts are warning of the worst global food crisis since WWII. It is a crisis that will have its severest impacts on the poorest countries and poor people in relatively wealthy countries, especially those already experiencing food insecurity. There will also likely be compounding social and political consequences, as pointed out in a new report by risk consultancy Verisk Maplecroft, which notes that middle-income countries such as Brazil and Egypt will be particularly at risk for rising civil unrest. (source)
The food crisis is global.
Like it or not, we’re part of a global economy. When everything is working smoothly, and there’s no war and animosity, this allows us to have access to a wider variety of food and resources. But when things begin going sideways, there’s a horrible domino effect that goes cascading through sector after sector.
We may not be dealing with quite the same level of crisis as Europe right now, but it’s only a matter of time. We’re in the midst of an economic collapse, and it’s a slow drain, the Thirdworldization that Fabian writes about. It’s happening now, and it is more essential than ever to have a plan to feed your family no matter what. You can’t just hope to find what you need on your weekly grocery trip, and this will continue to devolve.
How bad it will get, I have no idea. But it will get worse than it is now.
*Source: Here’s How The Energy Crisis Will Accelerate The Food Crisis – Activist Post