This decade, food supply has become more of an issue, with some supply interruptions brought on by Covid-19- related lockdowns which were followed by scarcities, driving prices higher.
The great surge in inflation in the US, the European Union (EU) and United Kingdom (UK) in the last two years has changed a great deal. Food has shot up in price, squeezing people’s budgets. It has shaken the central banks out of complacency and into a new era of tighter money and higher interest rates. It has left people worse off, as the cost of energy in particular has risen too far and too fast.
The food industry claimed that it too was under a cost cosh, with rising wages, big increases in energy bills and dearer commodities to process.
When people need to pay more for the essentials of life, they feel particularly unhappy as they reduce the less-essential items from their family budgets to make up. It has placed the farmers and food shops as well as the oil companies at the centre of the storm. Oil companies have faced windfall taxes as they reported profit surges from energy-price rises.
Food shops had to defend their relatively low margins and show how they were trying to deliver better deals to their customers against a background of some big rises in commodity prices and in the costs of buying-in manufactured food products.
The food industry claimed that it too was under a cost cosh, with rising wages, big increases in energy bills and dearer commodities to process. It is true that the Ukraine war led to energy price spikes as European countries scrambled to end their reliance on Russian gas and oil imports. The war also put upwards pressure on grains and oils, as Ukraine is an important producer.
There was also a more general inflation on both sides of the Atlantic reflecting the very loose money policies of 2020-21, the ease of credit and the low interest rates. A general inflation set in with energy and food under significant upwards price pressure.
Empty shelves in Covid pandemic
Rich, advanced countries first discovered the problems of empty shelves and missing items from the supermarket shelves during Covid-19 lockdowns. It took time to get the farms and factories operating properly again after the restrictions, leaving some items missing for some time and leaving some other items more expensive due to their restricted supply.
General inflation, trade disruption and the erratic fallout from the Ukraine war have more recently compounded lockdown issues and left us bereft of some products. It is true the advanced countries have very flexible and responsive food delivery systems, and usually have substitutes on the shelves. In the very high inflation countries such as Venezuela, people face an entirely different level of disruption to their shopping as runaway prices leaves many shelves empty and whole categories missing from the regular shop.
The retailers and the food manufacturers find very rapid inflation prevents them from operating at previous levels given the difficulty of daily increases in costs.
The Ukraine war threatened the supply of grains and oils as that country is an important source of these basics. Russian damage to crops was made worse by military intervention at the Black Sea ports. Large quantities of grain sat in store with no easy way of getting it out to export markets. Some wheat fields became battlegrounds or were shelled.
Other Western countries have faced problems with bird flu, and some experienced periods of low rainfall limiting crops.
There are issues with finding enough people to harvest crops and tend fields in higher-wage economies.
Meanwhile, an agrarian revolution and planned dietary changes are underway. Advanced countries need to find replacements for agricultural labour through mechanisation and wish to grow more food from the land they can afford to release for agriculture. Competing land uses for housing, solar and wind energy installations, for wilding and for tree planting mean there is a wish to concentrate farm production more on the best farmland and raise yields further.
In market gardening, there are plenty of experiments with vertical greenhouses to grow fruits and vegetables. This is capital intensive but brings many advantages. The plants can be sent the right amounts of water and nutrients without needing to tend a field beneath them. They can be arranged to make picking much easier, and it may allow mechanical harvesting. They take the weather risk out of growing market garden produce, creating a benign atmosphere beneath glass or polythene. Additional carbon dioxide can boost their output. Many think they are the future. They can also be installed on wasteland in cities.
Drone management of farming
Those crops still needing more expansive field settings can also benefit from the advance of technology. In place of ever-larger tractors with long spraying arms there can be drone administered treatments from above or by pipe. Better intelligence from intensive electronic monitoring can target the right amounts of water, fertiliser and other inputs to the parts of the field or the individual plants that need it. There can be savings on pesticides.
There will be big savings in water and fertiliser previously showered on the whole field with much of it running off into nearby water courses. Harvesters are becoming even more
mechanised and sophisticated. Those running vineyards may now buy technology which allows each grape its own seat on the line with detailed grape-by-grape analysis electronically to allow rejection of grapes not up to standard for the quality of the press.
The modern farmer can sit in the farmhouse or office with screens and computer data monitoring crops and livestock from afar and directing mechanical delivery of treatments as needed. This new agrarian revolution offers investment opportunities in those providing the machinery and technology.
Some think that to get to ‘net zero’ we need to change people’s diets. It is true that depending too much on meat from grazing cattle, pigs and sheep can release substantial methane. Switching to plant substitutes or to alternative proteins such as insects could reduce these outputs. There are active and passive funds seeking to capture the opportunities in a range of activities including meat replacement, more sustainable packaging and new sources of protein. The food ones are still usually in their early stages, with people waiting to see if more of these ideas will take off and gain a mass following.
Meanwhile, traditional products are being tweaked to make them healthier and more environmentally friendly. Packaging is evolving, with a retreat from some plastics following the big reduction in plastic bags. There is an increasing concentration on improving soils for farming, with various natural methods to return nutrients to tired fields. Some use animal husbandry and others use crop rotation to achieve more productive soil. Many farms are investing in their own water capture and storage to allow watering of crops in dry spells.
The eternal importance of food
There is often a preference to buy local produce. Cutting down the food miles can save some carbon dioxide and transport costs. Local produce, freshly picked, does not need freezing or treating to prolong storage and shelf life. Large food retailers try to represent local and regional produce in their offers but sometimes struggle with volume and quality as their
systems are geared to big orders and a clear minimum specification.
All this should be a timely reminder of the importance of food to our lives and to the economy. The individual consumer will enjoy great variety and choice thanks to the flexibility of the system and can expect to see new products as people puzzle away over diet and the environment.
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