Supply line news – Impacts of pandemic, war, inflation, and whatever comes next

A thread for news about possible and observed supply impacts of pandemic, war, inflation, and whatever comes next. I’m US-based so please chime in with reports from other regions.

Grain. Although the US doesn’t import much grain, we do bring in about 100 million tons a year, and we are big exporters. That means we are exposed to the world grain price. RU and Ukraine (UA) export about 12% of global calories traded. About 30% of wheat, 20% of corn and 80% of sunflower oil. UA.gov voted to ban exports and RU sanctions will have a big effect.

Chips. (not potato) In addition to the existing supply bottlenecks and huge demand for microchips, it turns out Ukraine produces 50% of the neon in the world and has shut down both factories. So what? Neon is vital to the lasers that make microchip production possible. I have a PV charger on backorder—ostensibly due to the already existing chip shortages.

Fertilizer. In addition to food price increase, RU is a huge exporter of fertiliser and banned export of N back in February and banned other exports thursday. Prices of N increased 22% and K went up 34% on friday alone.  Not to put too fine a point on this, but fertilizer is the thing the Green Revolution was made of and what reset the timer on Ehrlich’s Population Bomb. So in addition to basic staples like grains, those of us who can grow some food should think about our fertiliser needs for the near term… and pesticides as well.

Lumber. Really building materials in general. Lumber price is nearly as high as it was at the height of the shutdowns. But in my experience going to the big box every week, the racks of about everything are better supplied now. If you can possibly put off a lumber purchase I think you will be able to save some money. But that’s just a guess and as I’m remodeling an old house, I can’t really postpone, so there is that.

Nickel, Copper, etc. Maybe getting into the weeds here but copper set an all-time high price this month and nickel was up 30%. China uses around half the supply and is driving consumption—because they make electronics for the rest of the world. I personally feel that the reason putin is going into UA now is that they past their peak in oil production on 2019, that is according to the RU oil ministry last year. So he’s gotta get to putting the USSR back together quick while he can. Having said all that, high oil price is going to drive up the price of lots of metals because they are needed for BEVs and renewable energy.  Energy Skeptic talks about these things a lot, she has an article up now talking about the huge amount of raw materials needed to transition away from fossils.

We live in a complicated and interconnected world where everything comes from somewhere else. Stuff is unfolding surprisingly fast at the moment, normality bias makes my cognition slow to respond. Most of the time there is enough slack, at least in my rich world, just in time supply line, that critical shortages don’t appear. But to me prepping is primarily about keeping ahead of whatever supply glitches and shortages.

What do you see coming down the pike?


  • Comments (10)

    • 2

      In the UK apart from massive hikes in energy prices we expect food stuffs to rise by at least 30% this summer, shortages of Diesel are forecast as the UK imports much of it (33%  of our diesel imports come from Russia).  The Nickel price hikes are driving up the cost of batteries especially for those used in electric vehicles. The cost of construction materials has gone through the roof, 8×4 ft 1/2in marine plywood is 4 times more expensive. but all timber / Lumber prices are up. 

    • 3

      Grain. I believe I mentioned somewhere that I ordered another 100# of red wheat berries from Azure. 

      It is now out of stock.

      • 3

        Try Palouse Brands.  Outstanding company, Pacific Northwest grown grains.

    • 5

      All of those you mentioned may not have direct impacts to each of us right now, but will cause cascading effects down the line. That’s what covid supply chains have showed us. 

      The nickel and copper are most concerning to me because so much of our world uses those materials and like Bill said, the cost of batteries is connected to nickel. So if we really want to move towards more electric vehicles, the price is either just going to go up or it’s going to slow down adoption of that technology. I HOPE that it causes such a strain on the battery market that it pushes companies to invest more into new battery technologies. Just like how all the scientists focused on pumping out a covid vaccine in record timing when the need was extremely high. A new battery technology could revolutionize vehicles, personal devices, and more. 

      I am afraid that house prices will only keep going up with lumber prices rising, copper for the electrical systems inside each house, chips to power the machines to build houses, and grains to feed the workers to build the houses. I’m hoping there will be a break in the housing market, but I don’t see that coming any time soon unfortunately.

      -hope you don’t mind me updating the title and changing some formatting of the post.

    • 5

      With lumber prices rising check the “cost to rebuild” limit on your insurance. If your house was previously appraised for $250,000 but now with inflation and high prices of materials it may actually cost $280,000 to rebuild. You will have to come up with the $30,000 difference.

      The Federal government has increased the Federal Fund interest rate and they are planning on additional rises coming up. This means that if you have variable interest rates on credit cards, car loans, or mortgages your interest rates have gone up. Be aware of this in your budget, pay off loans and debt ASAP, call your lender and tell them what a great customer you have been for so many years and ask if they could lower it for you, look if it’s a good time to refinance.

      Looks like the theme for 2022 is “Everything costs more now”. Even our debt costs more.

    • 5
      • 2

        This is sad.

      • 3

        Doubly sad because there is only about 7¢ worth of corn in that $3 bag—everything else is marketing.

        (IHA! a pretty close guess, turns out @ $8/bu corn, 56#/bu, 16oz/lb, 9oz/bag =8.03¢ of corn in a $3.48 bag at Wally’s)

        50# of shell corn at Azure is $32—a lot for $8 worth of corn but unless you can go out and glean a field… 65¢/lb, get some slaked lime ($1lb) to soak it in, add some lard or shortening and some spice and make chips to your heart’s content.

        Most consumer products are the same, a tiny amount of dirt cheap commodity with layers and layers of marketing, processing, distribution and profit. All for the convenience of popping a bag. The very best prep is learning to cook plain food from scratch. I’d trade all the guns and paracord bracelets and Rambo knives for a 65 year old who knows how to cook—luckily I don’t have to  ;^)

    • 2

      There is an outbreak of avian bird flu now affecting commercial flocks in the US, Europe and Asia. I was going to get a few layers for our new location and I’m undecided now. One of the benefits of chickens is they can forage for much of their feed but if there is lots of virus in the wild bird population probably they should be kept penned, which makes them less frugal—they will eat most scraps though.

      There is only so much MSM can follow, google your area to see what pops up.

      Story from AP.    Story on Healthline.   H5N1 in Humans CDC Story about Missouri

      • 2

        I have my annual chick order in for May. The big hatcheries are taking great pains for biosecurity and I figure the day olds are probably relatively safe given that they are packaged and shipped so quickly and only really come into contact with their hatch mates. What freaks me out are the backyard keepers around here who are swapping free ranging birds left and right even as flocks are getting infected in the region.