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?