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Covid-19 and its Aftermath Part 1
Posted 04-07-2020 at 11:44 AM by TRex2
There are three food shortage storms in the US, and around the world, and they will arrive in overlapping time frames. The first is what we are already experiencing.
1. The first storm, happening right now. The system is being crushed by people trying to do, what they should have done, years ago.
The situation we had in people's homes, at the beginning of February, breaks down to:
1. About 3% of the people have more than 90 days supplies on hand.
2. Most of the rest have about a week's worth on hand.
3. A substantial number had less than 3 days of supplies on hand.
Because, over the last half of the 20th century, most of the world moved from storehouses of food, to what is known as the "Just in Time" supply system:
1. The local stores had about 3 days of supply on hand.
2. If, just 3% of the people in categories 2 and 3 above, buy 90 days of supplies,that completely depletes what is on hand in the local stores.
3. The entire system (aka, the pipeline) has, typically, less than 90 days supplies on hand, so as more people try to fill that 90 days of supplies, they repeatedly drain the local stores, and before long, they drain the system that is supplying the local stores.
If this continued for about two years, most people (not talking about people who cannot, even if they honestly tried, afford supplies) could have 90 days of supplies on hand. But that won't happen. People will adjust to less stuff on the shelf, and tire of doing the right thing (having supplies on hand).
2. The second storm is forming in the supply chains. Food processing and packing plants, dock and distribution workers, and truck drivers are not immune to this virus, and in fact, tend to be in situations that expose them more often than the rest of us.
It may not be long, before a significant number of them are sick, or quarantined because they were exposed to someone who is sick. That will slow the pipeline, which will aggravate the situation I explained above.
3. The third storm will arrive in a few months, and it is a double problem.
Until recently, it was understood that there would be enough food, this year, because, while the US harvest had a lot of trouble, due to flooding, other countries had better than average harvests. Because of the late spring thaw, and massive floods some US farms, it was noted, were finished for the year, before the first seed was planted.
But now, there is some panic going on in the world, due in part to the Covid-19 pandemic, and some countries have reacted by not allowing their food to be exported as it usually would.
Vietnam, the world’s third largest rice exporter, put a moratorium on new export contracts as it assesses domestic stocks. Cambodia is following suit.
Kazakhstan, Russia, and Ukraine banned exports of wheat flour, buckwheat, and onions.
Serbia stopped exports of sunflower oil.
Some nations are adding to their strategic reserves. China is buying more rice to stockpile, even though it already has a year's supply of wheat and rice.
4. Finally, one aggravating factor: Feel Good Laws.
Further aggravating the situation will be "price gouging laws." Note that I said the laws will be the aggravating factor, not the price gougers. The way the laws are written in many states make them draconian in nature, and does not allow for increases in price due to market forces or increases in operating costs and they assume that the disaster will be very short lived.
Price gouging laws make socialists and other shallow thinkers feel good, that they helped the little guy.
They haven't.
These laws lead to further shortages, as the producers and distributors will simply move their products to more realistic markets, rather than take a loss selling to places with irrational laws. In addition, if it goes on long enough, it will likely give rise to black markets, with products disappearing from legit shelves, and moving to higher profit dealers who don't give heed to the legal channels.
(For more information on the price gouging problem
look up "Blessed be the gougers" on Real Clear Politics)
My advice for the near future is, for as many of us as is practical, to do as Joseph suggested in Genesis 41, and put about 20% (or more) of our groceries into our pantries to build up a stockpile. As I mentioned in my opening, this is something we should have been doing all along. If we can do this for the next year, we should have some stability when the next disaster hits.
TRex2
Links supporting this article.
https://www.realclearmarkets.com/art...rs_487883.html
https://www.aei.org/carpe-diem/more-...rricane-sandy/
https://consumer.findlaw.com/consume...-by-state.html
from christian science monitor
https://news.yahoo.com/day-life-groc...191641075.html
https://www.agriculture.com/news/cro...-disease-oh-my
https://www.reuters.com/article/us-u...-idUSKCN1RE0BU
https://www.omaha.com/news/local/som...4c0d4ec6f.html
https://www.msn.com/en-us/finance/ma...de/ar-BB11EY3M
https://www.piie.com/blogs/realtime-...-time-covid-19
https://www.livemint.com/news/world/...138842982.html
1. The first storm, happening right now. The system is being crushed by people trying to do, what they should have done, years ago.
The situation we had in people's homes, at the beginning of February, breaks down to:
1. About 3% of the people have more than 90 days supplies on hand.
2. Most of the rest have about a week's worth on hand.
3. A substantial number had less than 3 days of supplies on hand.
Because, over the last half of the 20th century, most of the world moved from storehouses of food, to what is known as the "Just in Time" supply system:
1. The local stores had about 3 days of supply on hand.
2. If, just 3% of the people in categories 2 and 3 above, buy 90 days of supplies,that completely depletes what is on hand in the local stores.
3. The entire system (aka, the pipeline) has, typically, less than 90 days supplies on hand, so as more people try to fill that 90 days of supplies, they repeatedly drain the local stores, and before long, they drain the system that is supplying the local stores.
If this continued for about two years, most people (not talking about people who cannot, even if they honestly tried, afford supplies) could have 90 days of supplies on hand. But that won't happen. People will adjust to less stuff on the shelf, and tire of doing the right thing (having supplies on hand).
2. The second storm is forming in the supply chains. Food processing and packing plants, dock and distribution workers, and truck drivers are not immune to this virus, and in fact, tend to be in situations that expose them more often than the rest of us.
It may not be long, before a significant number of them are sick, or quarantined because they were exposed to someone who is sick. That will slow the pipeline, which will aggravate the situation I explained above.
3. The third storm will arrive in a few months, and it is a double problem.
Until recently, it was understood that there would be enough food, this year, because, while the US harvest had a lot of trouble, due to flooding, other countries had better than average harvests. Because of the late spring thaw, and massive floods some US farms, it was noted, were finished for the year, before the first seed was planted.
But now, there is some panic going on in the world, due in part to the Covid-19 pandemic, and some countries have reacted by not allowing their food to be exported as it usually would.
Vietnam, the world’s third largest rice exporter, put a moratorium on new export contracts as it assesses domestic stocks. Cambodia is following suit.
Kazakhstan, Russia, and Ukraine banned exports of wheat flour, buckwheat, and onions.
Serbia stopped exports of sunflower oil.
Some nations are adding to their strategic reserves. China is buying more rice to stockpile, even though it already has a year's supply of wheat and rice.
4. Finally, one aggravating factor: Feel Good Laws.
Further aggravating the situation will be "price gouging laws." Note that I said the laws will be the aggravating factor, not the price gougers. The way the laws are written in many states make them draconian in nature, and does not allow for increases in price due to market forces or increases in operating costs and they assume that the disaster will be very short lived.
Price gouging laws make socialists and other shallow thinkers feel good, that they helped the little guy.
They haven't.
These laws lead to further shortages, as the producers and distributors will simply move their products to more realistic markets, rather than take a loss selling to places with irrational laws. In addition, if it goes on long enough, it will likely give rise to black markets, with products disappearing from legit shelves, and moving to higher profit dealers who don't give heed to the legal channels.
(For more information on the price gouging problem
look up "Blessed be the gougers" on Real Clear Politics)
My advice for the near future is, for as many of us as is practical, to do as Joseph suggested in Genesis 41, and put about 20% (or more) of our groceries into our pantries to build up a stockpile. As I mentioned in my opening, this is something we should have been doing all along. If we can do this for the next year, we should have some stability when the next disaster hits.
TRex2
Links supporting this article.
https://www.realclearmarkets.com/art...rs_487883.html
https://www.aei.org/carpe-diem/more-...rricane-sandy/
https://consumer.findlaw.com/consume...-by-state.html
from christian science monitor
https://news.yahoo.com/day-life-groc...191641075.html
https://www.agriculture.com/news/cro...-disease-oh-my
https://www.reuters.com/article/us-u...-idUSKCN1RE0BU
https://www.omaha.com/news/local/som...4c0d4ec6f.html
https://www.msn.com/en-us/finance/ma...de/ar-BB11EY3M
https://www.piie.com/blogs/realtime-...-time-covid-19
https://www.livemint.com/news/world/...138842982.html
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