(OPINION) At this moment, food prices all over America are at incredibly low levels. I know what many of you must be thinking. You must be thinking that I have lost my mind, because food prices have been rising at a very rapid rate all over the country. But when I say that food prices are at “incredibly low levels”, I am not comparing them to where they were in the past.
Rather, I am comparing current prices to where they will be in the future. Yes, things are bad now, but food prices will be much higher a year or two from now. The global fertilizer crisis certainly isn’t going anywhere. If anything, it is only going to intensify.
The same thing could be said about the war in Ukraine. Peace talks are absolutely dead, and so it looks like fighting between two of the most critical breadbaskets in the world will continue for months to come. Meanwhile, the bird flu pandemic continues to wipe out millions of chickens and turkeys all over the globe.
We have never seen a “perfect storm” quite like this, but of course, some of the factors that will be driving up food prices are entirely self-inflicted. For example, the Chinese government didn’t need to lock down nearly 400 million people in a desperate attempt to prevent the spread of COVID. The past two years have provided ample evidence that such lockdowns are quite foolish, but the Chinese went ahead anyway.
As a result, there are now hundreds of commercial ships waiting impatiently off the coast of Shanghai. Those are giant cargo ships that bring stuff across the Pacific Ocean to us. If the Chinese don’t loosen up, many of our store shelves will become quite empty in the months ahead.
And it isn’t just commercial ships that are sitting idle… Shanghai is one of the largest manufacturing centers in China, with heavy concentrations of automotive and electronics suppliers.
It is home to the largest container port in the world and a major airport that serves inbound and outbound air cargo. Exports produced in Shanghai account for 7.2% of China’s total volume and about 20% of China’s export container throughput moves through the port there, according to the BBVA report.
Most warehouses and plants are closed, nine out of 10 trucks are sidelined, the port and airport have limited function, shipping units are stranded in the wrong places, and freight is piling up. Needless to say, many of our major retailers simply could not operate without the goods that they import from China. So we better hope that this potential nightmare gets resolved very soon. READ MORE
