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The Food Domino Effect

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Touch the Soil News #473

Hitting the news recently is a classic example of a food domino effect. Destabilizing effects in the “pork” food chain have created a domino effect between the United Kingdom, China and even the United States as they are all connected to the “pork” food chain.

The world’s food chain – hinged together by the financial world – did not historically behave like standing dominoes at risk of being pushed over. Following are some of the reasons why the risk of a food domino effect is so high today:

  1. Corporate financial wizardry embraces “just in time” inventories. This means grocery stores and entire cities bring in only an amount of food that – on average – comes just in time before the consumer takes it off the grocery shelf.
  2. Under pressure to cut federal budgets, many nations (especially the U.S.) have virtually eliminated any domestic food stocks for an unanticipated emergency.
  3. There is no international plan for global strategic food stocks.
  4. The slightest oversupply in the “just in time” inventory landscape sends horrific financial punishment to farmers, setting the stage for production cutback that are too steep.
  5. Financial speculation can trigger a food domino effect on food prices and hunger.
  6. Weather related crop/livestock damage can pose unacceptable risks to the food chain.

Strips of bacon ready to be made into jerky. The global tug of war over money, combined with a global tug of war for food, sets the stage for food domino effects (photo: CC-2.0).

Bacon

Following is a short synopsis of the unfolding “pork” food domino effect:

1) Folks in the United Kingdom were hit (by currency speculations) with a devaluation of their currency, upon the announcement of their vote to exit the European Union. With a devalued currency it made their food cheaper for other nations to buy and more expensive to import.

2) The nation of China was hit with devastating floods that negatively impacted the production of pork – a primary Chinese staple.

3) China is importing pork from other nations including the United Kingdom. Pork imports from the United Kingdom to China have reached levels where stocks in the United Kingdom are strained.

4) United Kingdom exports of pork to China are up 31 percent for the first half of 2016.

5) Chinese imports of pork are up 60 percent for the first half of 2016.

6) Pork prices in the United Kingdom are up almost 20 percent.

Following is a short video clip on the “pork” domino effect in the U.S. and around the world:

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