0:00

When's the last time you heard the phrase food insecurity?

0:02

In other words, food shortage. If you live in America,

0:04

you're thinking to yourself, food shortage in America? I

0:07

can go anywhere, fast food, I don't have to worry about this

0:09

stuff. Why should I even spend time learning

0:11

about food insecurity? Here's why. Because

0:13

in the last three years, when it comes down to how many

0:15

people can't find their next meal

0:18

according to World Food Program, 345

0:22

million people worldwide do not know where their next

0:24

meal is going to come from. So you may say, what's the big

0:26

deal about 345 million? Here's what's the big deal

0:28

about it. It's doubled, not in 20

0:30

years, not in 10 years, not in

0:32

five years. It's doubled in three years. And

0:35

why is this important? What does it have to do with

0:37

the price of fertilizer? And what does it take

0:39

to make fertilizer? Nitrogen, phosphate,

0:42

and you have potash. Who has that? Where

0:44

do we buy that from? Does this have to do anything with Belarus,

0:47

Russia, Ukraine? Is that why this is taking

0:49

place? Are wars hurting this? Wait

0:51

till you see some of this data here, but it's something you need to know

0:53

about. And I'll give you the last thing to be thinking about before

0:55

we get into the episode. An article just came out a

0:57

couple days ago. The most expensive Big

0:59

Mac meal you want to buy in America at

1:02

a Connecticut McDonald's, it's

1:04

over $18. The combo ends

1:06

up costing that person buying it roughly $21.

1:09

So you may want to learn a little bit about this food insecurity,

1:12

because what it takes to make it could affect

1:14

the states. Okay, so if you get value out of this video,

1:16

give it a thumbs up and subscribe to the channel. Let's get

1:18

right into it. Now, let's go a little deeper.

1:28

Since the beginning of the Russian invasion

1:29

of Ukraine in February of 2022, Ukrainian exports

1:33

of grain have been severely disrupted for

1:35

over four months. Russian military vessels

1:37

blocked Ukrainian ports in the Black

1:39

Sea. Between July 22 and

1:42

July 23, there was an agreement between the United Nations,

1:44

Turkey, and Russia to allow exports via a

1:46

safe maritime humanitarian

1:49

corridor in the Black Sea. Over a thousand

1:51

ships full of grain and other

1:53

foodstuffs left Ukraine from three

1:55

Ukrainian ports during the implementation

1:57

of the initiative. On July 17.

1:59

of 2023, Russia announces

2:02

decision to end the Black Sea Grain

2:04

Initiative. So meaning they were not letting them out, then

2:06

you can, then all of a sudden they're like, Nope,

2:08

you can't do this for putting the stop to this. And this

2:10

affects everybody because they're one of the biggest exporters

2:13

of that product as you see here shortly.

2:16

Russia and Ukraine together accounted for one third

2:18

of world's global wheat trade, 17% of

2:21

global maize trade and almost 75% of

2:23

global sunflower oil trade. And prior

2:25

to Russia's invasion, Ukraine provided 11% of

2:28

the world's wheat and 17% of corn. So

2:30

since the invasion, the average price of shipping

2:33

agriculture products increased from $30 to $200 a ton. That's

2:35

seven x in two years, less than two

2:40

years, seven x in less than two years, February 24,

2:42

2023, US Department of Agriculture

2:45

estimates that exports of wheat in the past

2:47

six months have been approximately 37% lower than the prior

2:50

year. Now this is important because exporting

2:52

matters to us exporting matters. There's certain

2:54

products we don't have in America that we need from others,

2:56

right? Watch what China is doing. China's maintaining

2:59

its food stock piles at a historical

3:01

high level. Why is China hoarding their stuff? Why

3:03

do they not want to play ball with other people? They're

3:06

picking things up, but they're hoarding on everything else.

3:08

The WFP predicts that by 2023, there would

3:11

be a shortage of wheat and corn, which

3:13

are the two staple products in the food supply

3:15

chain. The reports also estimate that these global

3:17

food shortages will increase food prices and even

3:19

trigger a new global recession. And if we

3:21

look at the list of countries with bans

3:24

on food exports, this is what you would see. Argentina

3:26

on soybean oil and soybean meal. This

3:28

man expires December 31. Algeria,

3:31

you got pasta, wheat derivatives, vegetable

3:33

oil and sugar Egypt, you got vegetable oil, you

3:35

got wheat flour oils, lentils, pasta,

3:38

beans, India's got wheat and Indonesia's got palm

3:40

oil and palm kernel oil. Iran's

3:42

got potatoes, eggplants, tomatoes, onion,

3:44

Kazakhstan's got wheat, wheat flour. This keeps

3:46

going over in all these other places, Kosovo,

3:49

Turkey, Ukraine, Russia, which has got

3:51

sugar, sunflower wheat, meslin, rye,

3:54

barley, maize, Serbia's got wheat,

3:56

corn, flour, oil, Tunisia, Kuwait.

3:58

So do you remember early when we talked about the blog? Black Sea Grain

4:00

Initiative between Russia and Ukraine, where it's like, hey, we

4:02

got to get kind of the export going again. If

4:05

you look at this chart here, this shows

4:07

you what was going on during Russia's

4:09

invasion of Ukraine. Look at the left, and you'll

4:11

see green is grains and oilseeds,

4:14

and you'll see blue is wheat. Look what

4:16

happened to the prices, how quickly it

4:18

went up. From 220 all the way up to 360, or from 260 all the way

4:20

up to 340. This

4:24

is not good for everybody else. And then they come

4:26

up with a deal. Once they come up with a deal, what

4:28

happens to the prices with the Black Sea Grain Initiative?

4:30

It decreases, decreases, decreases. And what

4:32

does Russia do on July 17, 2023? They

4:35

end the initiative. If you look at trends,

4:37

these numbers should be going back

4:40

up here shortly as well because of the

4:42

initiative ending. So look, I've been in the financial industry

4:44

since 9-11, the day before 9-11, and

4:46

I've owned stocks, bonds, mutual funds, real estate,

4:49

crypto, gold, you name it, I've owned it. But the

4:51

one thing that's a very important part of my portfolio

4:54

all these years is gold. I

4:56

love having a percentage of my network in

4:58

gold that I have access to in

5:00

case of many different things. A few facts you need to

5:03

know about gold. Number one, the gold market

5:05

cap is $11.8 trillion. Since 2000,

5:09

the compound annual growth rate

5:11

for gold has been 9.24%, and

5:14

during times of high inflation, 3% plus

5:17

has been 15.35%. Now,

5:20

those are just some numbers for you, but there's some other

5:22

benefits to add gold to your portfolio. Number

5:24

one, hedge against inflation. Number two,

5:26

results showed recently that 93% of

5:29

central banks are working on a CBDC.

5:31

So this means what? That could be a manipulated

5:34

currency that they own. If you own gold, it's

5:36

a non-duplicatable asset. You're

5:38

now hedging against CBDC taking

5:40

place. Number three, a potential

5:42

cyber threat. If it happens, you don't have access to your

5:44

money, you don't have access to your accounts, or you have

5:47

access to your hard physical gold. Number

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four is anonymous. No one knows you have that gold.

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the link in the description or call 866-939-6984 again 866-939-6984. So on top of

6:27

that, the other thing we need to look

6:35

at is fertilizer price. Why are price

6:37

of fertilizers going up? Why do many farmers

6:40

in America, why can't they afford to buy fertilizers

6:42

to produce more food? They need that. If they don't

6:44

have fertilizer, they can't produce it. So where's the

6:46

holdup? Look at this chart here. Look at pricing. 2019 less than 100,

6:50

2020 less than 30, 40 bucks, 2021 there was

6:53

moments it hits super, super low 2022 and

6:55

then today 157 is what we're looking at

6:57

compared to where we were before

7:02

and these prices are not necessarily slowing down

7:04

anytime soon. So where does fertilizer come from?

7:06

One is nitrogen which is primarily produced

7:08

in the US. It only takes natural gas

7:10

and we've got plenty of it. Says Rule adding

7:12

that there are significant nitrogen production

7:15

plants scattered throughout the Midwest, southern plains

7:17

and Gulf Coast areas. So one way to see

7:19

it is it's got a correlation with gas prices,

7:21

natural gas prices. If gas prices go up nitrogen

7:24

is gonna go up because they kind of correlate with

7:26

each other. So you may say Pat who cares if we

7:28

can do it ourselves? Why are we worried about nitrogen?

7:30

Well I'm just telling you that's one area we're okay

7:32

with because if you look at these charts here, here's what

7:34

you'll notice. China's first, buy a mile,

7:37

then it's us, then India, Russia, Indonesia,

7:39

Egypt, Canada, Pakistan, Iran and others. So

7:41

let's look at the second one which is phosphate. The

7:44

majority comes from Florida with a small volume

7:46

imported from Saudi Arabia, Israel

7:48

and Jordan, countervailing, duties

7:51

on Morocco and Russia have slowed imports

7:53

from those countries. And if we look at the

7:55

leaders bulletin on phosphate here's what you'll notice.

7:57

China is first, US and India are pretty much

7:59

tied, then it's Russia, Morocco, Brazil, Saudi

8:01

Arabia. However, when we look at potash,

8:04

this was a problem. 90% of the potash

8:06

that's used in the Midwest comes from Canada

8:09

on railcars. Only three countries in the world

8:11

have significant amounts of potash, Canada,

8:14

Russia and Belarus. Matter of fact, if you look at

8:16

the leaders bulletin here, here's what it looks like. Number

8:18

one, it's Canada, then it's China,

8:20

then Russia, then Belarus, then

8:22

Germany, Israel, Jordan, Chile, Laos,

8:25

Spain, on some list we're 11th, on some 15th,

8:27

on some 13th, but we're not even the top 10. So

8:30

notice the chart I just showed you, it shows China

8:32

as second, right? But if we go to 2021,

8:34

right before the war, look what China looked like.

8:37

On this chart here, this is 2021 number.

8:39

First place is Canada, then it's Russia, then

8:41

it's Belarus, then it's China. What's the problem?

8:44

Belarus and Russia ain't doing anything

8:46

right now because of the war. So that's why China just boom,

8:48

bumps the other two out and goes to second place.

8:51

This is why the Russia Ukraine is causing

8:54

food insecurity in different parts

8:56

of the world. So now this gets you thinking about farmers

8:58

finances on the line because at the end of the day, they need

9:01

to get to work, they need to be able to make money. If there's

9:03

no incentive for them, why are they going to do what they're going to do? And

9:05

they need money to go buy this stuff to produce what

9:07

they're producing, right? A report from the University

9:09

of Missouri found that the net farm income

9:12

in the state is projected to decrease

9:14

by 14% this year. And the

9:16

US Department of Agriculture anticipates

9:19

national farm income to fall by 19%. Meanwhile,

9:22

farmers input costs have increased. You ready?

9:24

Since 2020, 55%. That's

9:27

a lot of money. 55% it's

9:30

increased. So to break down that increase, here's what

9:32

it looks like. Fertilizer accounts for about a third

9:34

of those annual costs. And it now costs farmers

9:36

nearly 73% more than it did

9:38

in 2020. But farmers continue to buy because

9:41

they don't have a choice. It offers a good return on

9:43

investment said Ray Massey, a professor in

9:45

MU's College of Agriculture, Food and Natural Resources.

9:48

So if you're watching this and say, Man, these guys are getting killed

9:50

in America, but that's because they have the dollar.

9:53

Imagine other countries where their currency is getting

9:55

devalued month after month after.

9:57

Imagine what they're dealing with. Their numbers are not 73% It's

10:00

much more than 73%. This is an

10:02

America we're talking about. So the second factor

10:05

for food insecurity is drought. South America

10:07

is experiencing a severe drought for the third

10:09

consecutive year, the worst in a century,

10:11

primarily due to the La Nina phenomenon

10:13

that has persisted since 2020. The

10:15

country's most affected are those produced a

10:17

significant amount of food for the world, Argentina,

10:20

Brazil, Paraguay, Uruguay. In 2021,

10:22

these four countries accounted for approximately 13%

10:25

of the global food and fiber exports. They

10:28

complete the commercialization of soybeans, soybean

10:30

meal, and pallet soybean oil, frozen,

10:33

cellulose, cane sugar, poultry, and

10:35

coffee, and account for significant share of the global

10:37

supply wheat, fish fillets, pork, chilled

10:39

beef, wine, fruits, and fruit juice. Next

10:42

factor, which we love, but it's a problem. Why?

10:45

Just in time. You've heard of just in time before. It's a great thing,

10:47

but there's some problems behind it. Let me explain. A

10:49

just in time inventory system is a management

10:51

strategy that as a company receive goods as close

10:53

as possible to when they are actually needed.

10:56

This inventory system emphasizes inventory and increases

10:58

efficiency. This allows manufacturers to

11:00

not be left with unwanted inventory if an

11:02

order is canceled or not fulfilled. For just

11:04

in time manufacturing to succeed, companies must have steady

11:07

production, glitch-free planned machinery, and

11:09

reliable suppliers. Look, there's a lot of pros.

11:11

Obviously, it's got a lot more pros and cons, but when

11:13

we have an inventory issue or shifts are

11:16

getting stuck at Panama Canal because they

11:18

have problems or it's going to take long. This is problematic

11:20

for that, and that's the season today. So the just

11:23

in time is great when everything is

11:25

moving smoothly. It's not doing it today.

11:27

So look, final thoughts on this topic here. Am I sitting

11:30

here telling you to go stockpile a

11:32

bunch of food and just kind of be worried about

11:34

the world coming to an end? US is probably going to be the last

11:36

country that's going to feel the residual

11:38

effects of this, but should you be prepared

11:40

for it? Yeah, probably. I've been in the insurance industry

11:43

for over 20 years. Everything to me is in

11:45

case. Buying insurance policy

11:47

in case, auto insurance policy in case,

11:50

all of these things are in case. Water,

11:52

dry food, canned food. Look at the expressions.

11:55

There's plenty of companies that offer you to have this stuff

11:57

in case something were to happen. If you can't afford

11:59

to do that. you ought to consider doing that. It'll be a

12:01

long time until the US gets affected by this. Monetarily,

12:04

we will be, but in a way where you're gonna be not

12:06

knowing how to find your next meal, not gonna happen anytime

12:09

soon in the States. If you got value out of this video, give it a

12:11

thumbs up, subscribe to the channel. One thing that

12:13

gives me a lot of confidence about the

12:15

future, it may not be a concept

12:17

you know a lot about, maybe you've not heard a lot about it. Musk's

12:20

brother was participating in this thing. It's called vertical

12:22

farming. If you've never seen the video we did on

12:24

vertical farming, click here to watch it. Take

12:26

care everybody. Bye bye, bye bye.

12:30

Bye bye.