You are welcome to be skeptical, but 2-1/2 months ago I told you we were going hog-wild on gardening this year and it was driven by the Wuhan Pandemic.
So, let’s see how Ure’s outlook has been on this, alright? Specifically, from our Feb. 2, 2020 column “Seeds and Ozone” what was I telling you?
“Two purchases as we continue to spread-out our pandemic prepping.
The first: 30-thousand non-GMO heritage veggie seeds, 34-varieties. Fresher food, easier to pick and eat than go to the store and gamble.
Another Pandemic Prep? Picked up another Ozone generator. This is a super high-output unit.
To be sure, ozone generators are not well-understood by most people. There are two primary types: Ozone generation by light (UV-C) and by high voltage electrical discharge.”
Now, 2-1/2 months later notice Seed sellers can’t keep up as Americans grow their own food.
In retrospect, we not only called the food angle of the pandemic right, but we have our seedlings up and the second batch about to start germination. Because if you want to eat continuously, you need to plant continuously. Much different than simple “row-cropping” where you plant a gazillion and then store what you can. This concept is continuous harvest and saving as you go.
Well,, good luck finding seeds now. And, for that matter, good luck finding meat.
What you WILL find are plenty of stories (monetizations) about food. Some examples for your dining and dancing pleasure?
- “U.S. Food Supply Chain Is Strained as Virus Spreads”
- “U.S. Meat Supply Is ‘Perilously Close’ To A Shortage, CEO Warns”
- Here’s CNN call it “analysis? in “It’s time to talk more seriously about the food supply.“
- “Covid-19 could threaten global food supply, UN warns “
I line this headlines up, some 2-1/2-months after we told you “It’s coming…” in order to explain (for the terminally-slow of wit) why we detest the self-righteous and deluded Mainstream Media. The ponder for the first cup this morning goes something like this: “Where were all this high-dollar jack-off’s when answers were more actionable?
The second wave of vomitus coverage come from the lack of “tying it all together” because – as we say over and over… “What turns a recession into a Depression is a good shortage…” (With credit to master of Elliott waves Robin Landry for summarizing it so succinctly…)
Need some proof of the adjacency of the present economy to utter collapse? A pin-perfect replay of 1929? Our most recent 1929 Replay headline on point is probably in their piece “Dumped Milk, Smashed Eggs, Plowed Vegetables: Food Waste of the Pandemic.”
We’ll soon-enough be Replaying 1929 more openly.
But, the academically-interesting point is that the specifics of each Depression is often a scramble of ones before it. It wasn’t until 1933 that the Milk War economics was specifically brought to the American public.
But, the fact is, there was trouble in the fields already – even before the `919 blow-off top. For example, there was the 1928 Cantaloupe Strike. Next came the 1930 Imperial Valley Lettuce Strike, and following this, the 1931 Santa Clara Cannery Strike.
Is there an economic point to this? Jah! Natrulich! Several, in fact.
- Great Depressions have a major Food component .
- The food supply workers have been historically underpaid. This ranges from the farmers to field workers to the cannery/freezing outfit, to distributors…
- As a result of pernicious financialization, we are about to witness the collapse of “corporate farming.”
CCF: Collapse of Corporate Farming
The seed of collapse were sown when – due to financialization – farmers began to view their equity positions in farm land as “wasted because it’s capital are rest.” Therefore, to “recapture the capital and put it to work” what had once been a tradition of “free & clear” family farms morphed into a gigantic patchwork of corporations each attempting to be more profitable than the other.
And it worked great, too. For the last 20- years, for example, the fraction of your income spent on food could never be lower:
Well, you can see the dynamic, right? As the “food at home cost less” people began to get lazier and lazier – eating out more and more.
And these forces combined” Taking equity out of land which made it subject to interest rate fluctuation, excessive competition lowering prices to almost break-even, and the creation of the massive financialization called the “hospitality industry” all MIGHT have lasted a while longer.
Except, of course, food workers want more money, farmers want to own their own future (and that means the underlying dirt), and Americans are driving up prices for anything edible with panic buying realizing – belatedly – that the “virtuous cycle” of falling food prices is over and done-with.
When seen in this perspective, the situation paints a terrible picture for fisacally aware humans:
- If we go back to 1960’s levels – where food (all types) – demanded 17 percent of household income…based on current pricing around 10 percent, this means we can predict that within 3-4 years, food prices will be 70% higher.
- This translates a $5.39 container of organic milk to $9.16 although locally doubling of food prices will occur.
- We can also predict, with some certainty now thanks to a lock-down of most restaurants, a major expansion in the amount of food bneing redirected from “institutional packaging” (for nursing homes and restaurants, and the military) to end-consumer goods.
- This will lead to a demand spike for food workers in grocery stores. That’s because, in the lower of the charts, you’ll see how “dinner out” was a very special event in the 1960’s. We’re going there, This means the traditional grocery store inventory in a typical city will be moving BOTH its tradition “at-home” categories, but will also have to increase throughput in order to meet the hunger of all those people who previously were eating “meals out” because of convenience.
- Once you get “bigger grocery store turnover” and “closing restaurants” into your head, realize that these shifts – apparent and obvious when you think about them – will “back-up” to the producers because in the food-handling business, decisions aren’t made on “experimentally obvious.” Instead, they will be experientially based (order flow, fulfillment, and pull-through). Which means things will get much worse before they get “back to normal” – that is, if you can imagine a NORMAL with few restaurants (survivors will be pricey) and virtually no nightlife. All of which will combine into a collapse in the entertainment industry and, oh yea, not sure I’d be holding gambling stocks, unless you have a good line on when casino’s will reopen and what the daily handle will be as food and rent are going to wreck what once was…
- Oh…and what will happen to corporate farmers? Well, since they don’t want to operate at a loss, they will likely screw whatever farm operators and workers into the ground. Strikes will come, we will see a resurgence in the Union Movement, too, because….
We’ll look a bit more at the dynamics of this in “ Knockdown“ – our Peoplenomics.com report tomorrow. Provacative questions in there like “Is the whole category “gender monetization” really an “essential industry?” The mind reels…wait, or is the coffee just too strong…
Import Export Prices
Dow futures were up 342 points before the import and export price data was released by the Labor Department a few minutes back:
The price index for U.S. imports declined 2.3 percent in March, the largest monthly drop since import prices fell 3.2 percent in January 2015. The March decline followed a 0.7-percent decrease in February and 0.2-percent advances in each of the 3 months prior to that. Import prices also fell on a 12-month basis, declining 4.1 percent from March 2019 to March 2020. The decrease was the largest over-the-year drop since the index fell 4.7 percent for the 12 months ended June 2016. (See table 1.)
Fuel Imports: Import fuel prices fell 26.8 percent in March, after decreasing 9.0 percent in February. The March decline, led by a 27.4-percent drop in petroleum prices, was the largest decrease in import fuel prices since the index fell 27.8 percent in November 2008. The decline in petroleum prices followed an 8.8-percent drop the previous month. Natural gas prices also fell in March, decreasing 16.5 percent, after declining 14.0 percent in February and 12.2 percent in January. Import fuel prices fell 36.2 percent over the past year; lower petroleum prices and natural gas prices both contributed to the decline.
Prices for U.S. exports declined 1.6 percent in March, after falling 1.1 percent in February and rising 0.6 percent in January. The March decrease was the largest monthly drop in export prices since the index declined 1.7 percent in January 2015. Decreasing prices for both nonagricultural exports and agricultural exports contributed to the March drop. U.S. export prices fell 3.6 percent for the year ended in March, the largest 12-month decrease since a 4.5-percent decline from May 2015 to May 2016.
Want a chart, too? (Got ’em on sale 3 for 1 this morning… )
Can’t speak for you, but to me, it looks like we’ve been spoiling for this kind of decline since October of ’19.
After the data, Dow futures were up 350, but we will snooze so long as intraday highs of last Thursday aren’t breached. Retail and such tomorrow. So maybe this is a “buy the rumor” day…time will tell.
On the Disease Front
Two-million cases globally today or tomorrow. 1.934-million cases worldwide at click-time.
Around the Ranch
“Green-up” hasn’t happened in the Cascade Mountains west of Wenatchee, Washington, yet. So, between aid runs to check-up on Covid possibles, son George 2 was busy this week with his first small forest fire of the season. If you look, you can see the helo water bucket in the upper right. And do notice the steepness of slope – real cardio, this stuff.
Remnants of the fire line lower left-center and the bucket – upper right – didn’t capture too well off the video. But that’s something to think about: Fire season this year…
Lucky possum last night: Been bother the cats and digging holes around the storage building, sdo much as I respect life, his string of pardons has about run out. Lasst night, three rounds of light b ird shot to give him the idea he should run like hell and never look back. Tonight, or tomorrow, we will move up the shot size, but with regrets.
Neighbor called wondering if there were explosions going on up here. A delightful conversation followed about Remington versus Mossberg parts swapping.
Off to deal with the troublesome lawn tractor…have a great “shut-in”
Write when you get rich,