The United Nations has declared a global food emergency, but American farmers are still forced to throw away food. You would think that after all these months to prepare, and the activation of the Defense Production Act, that the Trump Administration would have solved the domestic food supply chain problem by now.
Well, the problems are not solved and it will only get worse unless something is done. For months, the strategy has been merely to dump surplus commodities. Presumably, this is simply to keep prices high enough to turn a profit on the commodities that do make it to the marketplace. All over the world, food prices are rising. What will happen if food prices start to significantly rise in the U.S.?
It is not just in the U.S. where the food is being dumped. All over the world, surplus crops and livestock are being destroyed. There seems to be no will within governments to prepare for food shortages.
Covid-19 has disrupted global supply chains for food, but the pandemic is not the only reason for the food emergency. Right now, China is experiencing the kind of catastrophic flooding that occurs only about once every hundred years.
Over 1.2 million acres of crops worth 1.16 billion U.S. dollars have been destroyed. That is a lot of food. The flooded region produces 50% of China’s agricultural output. Making matters worse for China is that almost 500,000 people have required evacuation from the flood zones, and 183,000 of these people require financial disaster assistance.
These floods have come immediately after China suffered frozen supply chains due to Covid-19. Farmers could not sell their livestock and produce as markets were closed, yet demand for food remained high. This caused prices to increase for the food that did manage to get through the supply chains. Don’t make the mistake of assuming the same mechanisms won’t happen in the U.S..
For most of the world, the supply is there, except it is stuck in a frozen supply chain. That supply can be properly collected and distributed by governments if the will is there to do so. In the case of China’s flooding, however, the crops were lost. There is no ability for the supply to be scooped up and repurposed. That means that China’s government will need to seek a food supply from outside the flood region.
China appears to be preparing accordingly, with some observers describing the situation as a ‘buying spree’. China first imported soybeans from Brazil, and now that Brazil’s supply is sold out, China has purchased increased amounts of U.S. corn, soybeans, and wheat.
In July alone, flash sales of US soybeans to China reached almost 3 million mt, according to the US Department of Agriculture data. The USDA on July 30 reported corn export sales of 1.94 million mt for delivery to China in 2020-21, the largest daily sales total for China, and third highest overall.Hellenic Shipping News
Even with all the tensions existing between China and the U.S., China is buying up every scrap of food they can, and they are going to make good on that trade deal. This strategy will net China 50% of the global wheat inventory and 65% of the global corn inventory by the end of 2020. That is a lot of food and it is on purpose.
Overall, the past few months have seen China increase its imports of pork, soybeans, soymeal, wheat, corn, sorghum and prepared/frozen foods from the United States and elsewhere. China can’t feed itself; it needs the world’s help, especially if its domestic production and inventories are compromised.Forbes
Will the Trump Administration make similar plans to secure the U.S. food supply? The U.S. does NOT reserve food in the National Strategic Stockpile. FEMA does stockpile food, however, and some food assistance has been made available for public assistance applicants impacted by Covid-19 stay at home orders.
As of April 9, 2020, 51 states and territories had “stay at home” orders in place.2 The population at high-risk for severe illness from COVID-19 includes people 65 years and older and people of any age who have serious underlying medical conditions, including people with chronic lung disease or moderate to severe asthma, people with serious heart conditions, people who are immunocompromised (e.g., those undergoing cancer treatment, smokers, those with HIV or AIDS), and people with severe obesity, diabetes, or liver disease, and people undergoing kidney dialysis.3 Due to the impact of the COVID-19 pandemic, there may be areas where it will be necessary as an emergency protective measure to provide food to meet the immediate needs of those who do not have access to food as a result of COVID-19 and to protect the public from the spread of the virus.FEMA
The assistance is only available for a narrowly defined group of people. Ultimately, there is little preparation in place in the event there will be widespread hunger during the winter of 2020/2021.