Trade Wars

Agri-Women hosts Global Food and Energy Conversation – AgriNews

FILLMORE, Ill. — Rising energy and food prices are impacting consumers who live in an interdependent world.

“As farmers and ranchers, we find ourselves grappling with volatile market prices, increasing regulatory burdens and explosive increases in the cost of fertilizers and fuel, which are inputs we need to produce food,” said Heather Hampton-Knodle, president of American Agri-Women. .

“Just in a hearing today, it was stated that 74% of the increase in poverty is due to rising energy costs and 63% of the increase in hunger is due to the costs high on fertilizers and fuel,” she told the Global Food and Energy Conversation. hosted by American Agri-Women.

“As farmers, we have the ability to feed not only our neighbors and ourselves, but much of the rest of the world with food and livestock feed, as well as renewable fuels,” said Hampton-Knodle, who farms with her husband, Brian and four children near Fillmore.

“However, we are finding that our supply chains are increasingly tangled and smothered by things beyond our direct control.”

“Trade is essential to prosperity, feeding the world and international development,” said Roger Cryan, chief economist of the American Farm Bureau Federation. “Every country strives to produce what it is best to produce and that is disrupted by trade wars and even more disrupted by murderous wars.”

Ukraine’s share in world wheat exports is 8% and 13% of world corn exports, Cryan said.

“It’s easy to disrupt supplies and it’s also clear that markets are working,” he said. “Prices have gone sky high and suppliers around the world have responded.”

For the first five months of 2022, Cryan said, global wheat exports are higher than last year.

“We need to keep an eye on inventory to see if these exports are coming from inventory,” he said. “This could create vulnerabilities in 2023.”

The general inflation rate is now at its highest level in 40 years.

“I think inflation will continue in the 5% to 9% range over the next two years,” Cryan said. “This creates higher costs for farmers and everyone else, especially for long-term investments.”

This is one of the causes of the agricultural crisis of the 1980s.

“A lot of people had long-term debt at high rates and weren’t able to refinance when inflation fell to 4%,” Cryan said.

“Farmers face tough input price situations with fertilizer and fuel prices well above headline inflation,” he said. “Fuel prices have doubled and fertilizer prices have tripled.”

Fertilizer prices have increased for several reasons, including reduced exports from some countries.

China has been one of the biggest fertilizer exporters in the world and banned fertilizer exports earlier this year,” Cryan said.

“For 40 years, farmers have made it look easy to feed the world,” he said. “But feeding the world is not easy and the world cannot take food supply for granted.”

“For decades, global economic growth and total global energy demand have gone hand in hand,” added Dean Foreman, chief economist at the American Petroleum Institute, a nonprofit industry advocacy organization. oil and gas. “No form of economic activity can be created without requiring some form of energy.”

Despite the growth of new technologies and renewable energy, Foreman said, 82% of the global energy mix is ​​based on coal, natural gas and oil.

“As emerging markets move from lower to middle to upper income, everything they want and desire, from more meat in their diets to consumer electronics to more cars containing a high degree of plastic , many start out as oil and gas in some way, shape or form,” he said.

Historically, gasoline and crude oil prices move together, Foreman said.

“There is a strong relationship because crude oil is the number one input in making gasoline and 60% of the cost at the pump,” he said.

Foreman reported a low level of inventories.

“We have the lowest crude oil reserves since 2014 and strategic reserves are the lowest since 1986,” he said.

Brent is a grade of crude oil that is one of the international oil price markers, Foreman said.

“The gap between Brent prices and global drilling investment has been substantial,” he said. “In June it was still more than a quarter down from the same point in 2019.”

However, U.S. and global demand for oil and natural gas is at or above 2019, Foreman said.

“If you don’t invest in drilling, you don’t have supply,” he said. “Demand was greater than oil and natural gas production long before Russia and Ukraine and nothing about Russia and Ukraine has improved the situation.”

Rose Barbuto, Senior Advisor to the Farm Journal Foundation, also contributed to the AAW conversation.

“We support global food security law and agricultural research both nationally and internationally,” she said of the Washington, DC-based nonprofit advocacy organization.

“We know that global food security efforts to support smallholder farmers with better agricultural tools and practices improve food production and economic growth in GA,” Barbuto said.

“We have really expanded our trade with developing countries,” she said. “This Aid for Trade focus is ongoing and that’s why we want to continue to support agriculture-led economic growth, because it’s in our interest to expand our trading partners.”

Agriculture is the backbone of the economy around the world, Barbuto said.

“We know that growing the agricultural sector is the most effective way to reduce poverty and hunger, but we are not investing enough,” Barbuto said.

“The Global Food Security Act has been funded at around $1 billion a year for the past decade, while humanitarian food assistance since 2014 has quadrupled,” she said. “Now, in 2022, we are spending eight times more on emergency food aid and money for food aid than on agricultural development.”

Ethiopia is one of the poorest countries in the world.

“The majority of people live on less than $3.20 a day,” Barbuto said. “When agricultural research reaches farmers, agricultural production increases. There is a correlation between the reduction of poverty and populations in a situation of food insecurity and the reduction of malnutrition and the rate of childhood illnesses linked to stunting. »

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