As we noted briefly last week, we continue to be concerned about one of our key 2022 Themes - the growing risk(s) to global food supply.

What had begun as a focus on the rising costs of fertilizer at the end of last year was accelerated significantly by one particular event: the Russian invasion of Ukraine.

The war endangered a significant portion of cheap global food supply all but ensured a meaningful jump in the probability of a severe jump in the cost of basic staples with a subsequent follow through to inflation, food prices and, even, hunger.

• Put it all together and Inflation isn't the only 1970s and 1980s "throwback" we are could regrettably experience - famine went from possible to probable just like that.

As we noted last week, we have been keeping our eyes on North American planting season and especially, the health of the US winter wheat crop. The news there isn't very good.

A persistent drought that continued into the winter months in certain key states has now combined with high winds to ensure that only 1/3rd of US winter wheat is rated as being in "good or excellent condition."

Further, well OVER a 1/3rd of the staple grain crop is in poor condition.

• This is ominous and models out that the crop could be roughly 50% of what a good year could be. No bueno.

This week we would like to highlight that the early signs for the US corn crop isn't much better (blue line at the very bottom):

Similar to wheat, both inclement weather and a drought have combined to ensure that US corn planting is very behind schedule - especially in key states. It could catch up but, as the chart suggests, it is unlikely to make a full recovery if the structural problems persist.

• This isn't good news. 2022 would be the very worst year for a disappointing year for US (or Canadian) grain crops.

It is critical for the global food market that we get bumper North American yields to try and alleviate some of the missing Ukrainian (and possibly Russian) supply.

There is a financial angle here (and there are relatively cheap grain ETFs you can purchase like DBA to protect) but also a moral and a global stability angle as well. We are also witnessing the politicization of the global food supply chain and food, more generally.

This is a profound change from the way the globe has operated for decades.

We will continue to watch this space and encourage you to as well. We are beyond just concerned and not just because of poor North American growing conditions......

This is very evidently NOT the year for the worst drought to be hitting the Horn of Africa in well over four decades.

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