Deglobalization’s impact on world food exports

Hey everybody, Peter Zein here coming to you from Central Yosemite. It’s another mountain lake. It is also unnamed, so it is now, from now on, going to be known as Peter’s other lake. It even has a beach. Isn’t that awesome? Anywho, today, we’re gonna take another entry from the ask Peter forum specifically, what’s gonna happen to global agricultural exports in a post globalized world, and the short version is, well, nothing good. In order to have agricultural exports, you basically have to have five things. One, a lot of arable land that’s productive. Number two, petroleum to use as fuel. There really isn’t any sort of agriculture that is produced at scale that doesn’t use internal combustion engines? Yes, yes, yes. They’re talking about having electric tractors and everything, but they suck. They don’t the charge doesn’t last long enough to do anything useful. There isn’t enough power to tow anything. And so unless you’re talking about, like, an electric cart to, like, go along as people are picking apples, no, not this decade, probably not next decade. Third you need fertilizer. Now, fertilizer comes in three parts, and nobody has all of them. You’ve got potash, which gives us potassium, you’ve got phosphate, and then you’ve got nitrogen. Nitrogen is normally made from natural gas. So there’s something else you could add to your list. These things are scattered about the world, but in unfortunately, some concentrations in places that are problematic. So for example, roughly half the world’s phosphate exports come from China, which is bad enough in a world where China is likely to break apart, but it’s even worse because the phosphate is in the interior regions that are more likely to be secessionists. So you just kiss all that goodbye for potash. The world’s largest concentrations are in Belarus and Russia. Thank God. The third one is Canada. Oh, my God, Saskatchewan. So you know, as the Canadians like to say, tits. And then third nitrogen, since it’s made from natural gas, comes from a much broader array of places, with the United States, far and away, being number one. Now you need all of these things to grow food, the fertilizers, of course, different volumes of each one based on the soil type of where you are and what it is you’re trying to grow. But yeah, there’s no way to do this without all of five of those things. And in a post globalization world, the list of places where that is possible is just pretty short. So at the top of the list, by far, is North America, specifically Anglo America, the United States and Canada, between Saskatchewan for the potash and the United States for the nitrogen, we’re in pretty good shape, some of the best agricultural land in the world, and for phosphate, once you get out of the China orbit. There are a number of other options, Morocco, Israel, Saudi Arabia, Florida, of all places. So North America looks pretty good. Other new world places that look good. Argentina, some of the most productive agricultural land in the world. And new world countries like Argentina, South Africa, New Zealand and Australia. The land is good. Most of them, with the exception of Argentina, can’t provide their own fuel. But these are places that are not likely to be in conflict zones. So if there is any fuel and fertilizer to be had for international trade, these are some of the places it is likely to go because they’re going to be able to pay in hard currency. Brazil does not look good. Brazil has some of the worst land quality in the world, and is a massive importer of fertilizer, the world’s largest by far, after China, most of which comes from either China the former Soviet Union. So you know, do the math there. So Brazil’s day as an agricultural powers, not yet over, but it you can see the sunset from here. There are parts of Brazil down south there, Argentina that will probably do a little bit better. But for the most part, the Serato, this explosive growth we’ve seen, especially in things like soy, that’s that’s temporary. Let’s see who else new world. That’s everybody in the New World, I think Old World, France, kind of like Argentina, has great land, kind of like Argentina, New Zealand, Australia and South Africa. It’s far enough away from the conflict zones that it’s probably going to be okay. It’s close enough to the North Sea to get nitrogen from the natural gas there, and if there is any trade to be add, France is going to be one of the few powers that’s going to be able to play because they actually have a navy and can actually patrol their own sea lanes, which is a relatively rare thing. So that’s about it. That’s all of them. That’s not enough. We’re looking at global calorie production probably dropping by a third. You know, that’s that’s a lot of starvation. One other thing, there’s more to agricultural exports than the things that I normally care about. You know, wheat, rice, corn, soy, where we get most of our calories, there’s also a booming agricultural trade today in specialty crops, whether it happens to be cherries or apples or alfalfa or whatever. Keep in mind, excuse me, mosquito that in a post globalized world, the ability of countries to pay for special. Multi crops is going to collapse, especially if they’re going to China. So if you are an agricultural producer and China is your ticket, it’s time to figure out where to get a different ticket. I’d say in the United States, the part of the country to be most concerned about is California’s Central Valley. This is an area with extraordinarily high production costs, in part because it’s California and regulations are very, very strict, in part because the Central Valley is arid to desert almost everywhere. So the input costs are very, very high. This is not fertile land. This is kind of like the American equivalent of the Serato in Brazil, to a certain degree. Now, as long as the inputs are relatively inexpensive, and as long as China is paying top dollar for everything because they’re price insensitive, this is a great business plan, but that’s not the world we’re going to be in much longer. So check your specialty crops, see where they’re going, see if this is a country that will do well as globalization breaks down, and if not, you either need to find a new destination or a new crop. All right, that’s it for me. See you next time.