The President's Daily Brief - May 19th, 2022. Special Brief: The Emerging Food Crisis.

Episode Date: May 19, 2022

It’s May 19th. You’re listening to the President’s Daily Brief. I’m your host and former CIA Officer Bryan Dean Wright. Your morning intel starts now. This morning is a special brief, an update on the warnings we all heard back in March that the world was facing a food crisis because of the war in Ukraine. I’m sorry to report that the crisis has in fact begun most especially in regards to wheat. So grab a map, buckle up, and come with me around the globe as we look at how war and weather are impacting the world’s ability to feed itself. And as always, we’ll discuss what this could mean for you and your family. All up next on the President’s Daily Brief. ------ Please remember to subscribe if you enjoyed this episode of the President's Daily Brief. Learn more about your ad choices. Visit megaphone.fm/adchoices

It's May 19th. You're listening to the President's Daily Brief. I'm your host and former CIA Officer Brian Dean Wright. Your morning intel starts now. The brief you're about to hear is in the same spirit of the actual President's Daily Brief, which is a top secret summary of the most critical events in the past 24 hours, all delivered to the President each day by the nation's spy masters. And so, ladies and gentlemen, I am your spy, and this is your brief. And this morning is a special brief. An update on the warnings that we all heard back. in March that the world was facing a food crisis because of the war in Ukraine. I'm sorry to report that the crisis in fact has begun, most especially in regards to wheat. So grab a map, buckle up,

and come with me around the globe as we look at how war and weather are impacting the world's ability to feed itself. And as always, we'll discuss what this could mean for you and your family. All up next on this special edition of the President's Daily Brief. In a previous brief, I told you about the importance of palm oil. But today we're going to talk about wheat. But that actually begs the question, why wheat? Well, simply put, it's the world's most widely grown crop. So no matter what country you live in,

odds are you consume wheat in some form or fashion. And data support that. 35% of the world's population relies on wheat as its number one staple product, mostly bread. But it's in all sorts of other products, too, from cereals to baked goods. So when the world starts running short of, wheat, that becomes a big problem. And unfortunately, we are running short of wheat. You may have

first heard about this news in the days following Russia's invasion of Ukraine. That's because those two nations produce about 25% of the world's exported wheat. So that means that we have less supply, and then what's left comes with a much higher price. And boy, oh boy, have prices gone up about 60% just from February to May of just this year. Now, those price increases hurt some countries more than others, but it also includes the United States. And it's that pain that we need to better understand this morning. So first, take a look at your map, whether it's in your mind or on your computer screen,

and I want you to focus your attention on Southeast Asia, specifically the country of India. This nation is really important for lots of reasons, but especially when it comes to wheat. They are the world's second largest grower of the crop. They're also a major exporter. For the past five years, they've had great wheat harvests. And so when the war in Ukraine started, a lot of people hoped that India would step up to fill the void. But that's not going to happen. And that's because India is in the midst of a record-breaking heat wave and a lack of rain.

And that means that they're going to have a reduced yield, or fewer bushels of wheat for every acre harvested. And so that means with less supply, they have less to provide. And that's not only true of less supply for the rest of the world, but to feed their own people. And they've got 1.4 billion Indian mouths to feed. And that's why last weekend, the government of India slapped a ban on all wheat exports. So that ban has turned into a bit of a global panic, because a lot of countries, they were relying on India's wheat to replace the Ukrainian and the Russian wheat that they lost because of the war. Now, in the past few days, there have been some lobbying efforts on Indian officials to relax, at least part of the ban, and there are now a few countries who are getting some exceptions, but not all. And that takes us to our next Asian country, if you look at your map, go just south of India. It's to an island nation called Sri Lanka.

Now, the folks of this country previously got 45% of their wheat from Ukraine and Russia. Well, unfortunately, that's mostly gone. And without that foreign wheat, prices have skyrocketed, and wheat products are very limited in supply. Now, India may or may not give them a little bit more wheat to make up for the difference, but for now, the Sri Lankan people are really mad, so mad that they started rioting. There are different reasons for the riots. It's not just wheat prices in this case. But nevertheless, hundreds of people have been arrested and scores dead. There's been so much chaos in the country that the prime minister was forced to resign.

And speaking of political turmoil, that actually takes us to the Middle East. So let's shift our maps and attention to the country of Lebanon. Now, historically, this nation, and listen to this, has gotten 80% of the wheat that it uses from Russia and Ukraine. So not surprisingly, because of the war, they've taken a huge hit. And as of this morning, Lebanon only has enough wheat flour to last the entire nation 25 days. And then it's all gone. And because of that lack of supply, wheat mills around the country are shutting down, bakeries too.

And that means less bread, which is a key staple for the Lebanese people. Man, the Lebanese folks, they are going through it right now because they actually had a really big wheat shipment that was not too long ago supposed to arrive. But when it did, it was contaminated with moisture. Now, things weren't always this bad in Lebanon. At one point, not too long ago, a couple years actually, they had a massive amount of wheat and reserve, and it was at a port and Beirut. But that port was blown up.

And the wheat, too. All victim of a mysterious explosion. Another problem for Port Lebanon, the country hosts over a million refugees from Syria. So not only do they have to feed their own people with a dwindling supply of wheat, they got blown up in some cases, but they have to feed all those refugees as well. So of course the Lebanese government is trying to find replacement wheat, but they're competing with all the other countries who are trying to do the exact same thing. All in all, it is not a great time to be in Lebanon. So let's leave. And instead, let's look at our maps and head south to the

country of Egypt, which is actually the world's largest wheat importer. And historically, they've imported 80% of their wheat from Russia and Ukraine, all defeat their 100 million citizens. Now, once the war in Ukraine kicked off, they knew that they were in trouble. And so they started scrambling to find a new supply. And like others, they went to India. But now, with India's export ban, there's a lot of wrangling between their diplomats to see if Egypt can maybe get an exemption from that ban. But even if they do, Egypt will still fall short of what it needs. So it's cracking down on the few farmers within the country that still grow wheat. And they're doing that with the new law. And that law compels farmers to sell most of their wheat to the

government. And if they don't, if they try to sell it on the open market, they get five years in prison and a very big fine. One final point here in Egypt before we leave. There were massive bread riots back in the 1970s when the Egyptian government tried to remove food subsidies. Prices went up and people rioted. Hundreds of thousands of people protested. Lots of folks killed and injured. The army eventually had to be deployed to settle things down. So in short, it's probably not a great time to be in Egypt either. So let's look at our maps and let's head south and west from Egypt and into the heart of Africa, specifically to the country of Cameroon. Unfortunately, they are one of Africa's top wheat importers and they use grain to feed their 26 million people. But the war in Ukraine has cut their

supply of wheat down by 60%. And as you might have guessed, many of their mills have shut down too, just like in Lebanon, their bakeries as well. And that's led to half of its people no longer having access to bread. And my goodness, the price is just one loaf, a tiny nine-ounce block, that went from 25 cents to 90 cents in just a few months. Now, that might not sound like a lot to your eye, but keep in mind, the people there make as little as $65 a month. Now, not surprisingly, the Cameroonian government is very worried about all this, and it fears especially social unrest, and so it's pleading with its citizens to remain calm. And also, they're encouraging, people to start using substitutes for wheat like yams and the cassava root. Well, those substitutes

won't be enough, I'm sorry to say, but it's the best that they've got. Okay, so now we move from Cameroon to the east, and we stop at the African country of Kenya. This nation gets 66% of its wheat from Russia and Ukraine. And like all the other governments that I mentioned, they're scrambling for replacements too. They're even considering lifting a 30-year-old ban on Indian wheat because of an old fungus outbreak. Now, I suppose it doesn't really matter if Kenya ultimately lifts their ban on Indian weed because, as we know, India has their own ban. That means there are no exports to Kenya or other places unless there's a surprise and rare agreement. Now, it is true that Kenya grows its own wheat. Not much, but a little. Unfortunately, though, Kenya is dealing with the worst drought that it's

had in 40 years. So the modest wheat that its farmers would have otherwise produced is way down. own. So not surprisingly, they're scrambling, trying to find other sources. So like other places in the world, Kenyan officials are trying to get people to substitute wheat for other things that they can find like rice and sorghum. But in doing so, that's actually caused a spike in prices for those other products too, the rice and sorghum. All right, so we are in Africa, but I think we need to take a breather and recap. We've traveled from Asia, and we've talked about India's wheat ban and Sri Lanka's riots over food prices. And then we headed to the Middle East, and we looked at Lebanon's terrible luck and Egypt's crackdown on wheat farmers. And we've also

explored sub-Saharan Africa, including the tiny loaves of bread in Cameroon and then the drought in Kenya. But of course, those are just a few countries, a few examples. There are a lot of other nations this morning in each of those regions with the exact same story. They need what they can't get from Russia and Ukraine. And they're looking everywhere. for other sources. And that actually takes us to the root of the problem. So let's look at those maps and move our eyes to Ukraine. Because as we all know by now, they are a really important provider of wheat to a lot of countries. What's incredible is that even now, in the midst of war, Ukrainian farmers are actually still planting wheat and other agricultural products. The exact amount of

acres is unclear, but we know that the Biden administration and governments in Europe are pumping billions of dollars into Ukrainian farmers for seed and diesel and fertilizer to bring all the crops to harvest. And that harvest, God willing, will start in mid-June. I want you to remember that date. We're going to come back to it. Okay, so we have about a month away before the harvest comes in Ukraine. But there are two obvious problems. The first is whether the fields and the farmers are going to be bombed or shot as they try to harvest. Because unfortunately, many of the areas where the wheat is planted, they're in harm's way. There's a stretch of land from Marlpool to Kersan, where a lot of the farming occurs, and it's where a lot of the fighting has been too. But let's say a miracle happens,

and crops get harvested in Ukraine, and there's this fantastic opportunity to feed the world. But there's a problem, because we have to get it all to market. In the past, about 98% of Ukraine's agricultural products were shipped via the Black Sea, and mostly through the port city of Odessa. Now, that port city is still under the control of the Ukrainians, thank God, but unfortunately, the sea that surrounds it is not. The Russians have effectively turned the Black Sea into their private lake. They've got the whole thing on blockade. In other words, no ships get in and no ships get out except theirs.

And even if there was some magic ship that could get through maybe in the dead of night, there's the issue of insurance. Because right now, no insurance companies want to insure any of those ships that would transport all the wheat, obviously because of the risk of war. So that leaves either rail or road to transport that miracle Ukrainian wheat crop if we could get it. But again, both rail and road have very serious problems. When it comes to rail, most of the wheat crop in Ukraine would have to go into Poland, but the railroad tracks in Poland are a different width than the railroad tracks in Ukraine. and that means that the shippers have to unload and reload all the grain cars somewhere along the border between Poland and Ukraine,

or they have to lift all the railroad cars in Ukraine onto a whole different set of wheels in Poland. Either way, it's very time-consuming and it costs a whole bunch of money. But even then, we have the issue of track quality. About 30% of Ukraine's railroad network has been bombed by Russia's military. All right, so that leaves roads. And while it's possible that trucks could be used to transport wheat, it'll never be at the same volume as rail or ship. Own it all.

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Instant room upgrade. Stop taking bad travel advice. Start comparing 100. of sites with kayak and get your trip right. Kayak, got that right. All right, we've just covered a lot, so let's summarize. Ukrainian farmers are planting wheat this year, but the odds are long that they will have a good wheat crop

that they can actually get to market. At least not at this scale necessary to help all those countries that we talked about, like Lebanon and Egypt or Cameroon and Kenya. We've listed a lot of different countries this morning, but we actually have one more to go to on our. journey. So I want you to take a look at your map and I want you to go west from Ukraine, way west, all the way to the United States. Because smart listeners like you are probably wondering by now, well, why can't we just plant more wheat and then we can export it to all these countries?

And that's actually a really great idea. But as you can probably guess, I'm going to bring up some problems because apparently that's what I'm very good at doing during this brief. At any rate, you have to understand that there are two seasons for planting wheat here in the United States, one in the winter and one in the spring. So here's the first challenge. America's winter crop this year suffered a lot because there wasn't enough moisture in the ground. We had a drought in about 68% of our critical farming areas. That means our yields for our winter wheat crop are probably going to be a lot lower.

And then that leaves, of course, our spring planted crop. And again, Mother Nature was not very helpful. This time, instead of not giving us enough moisture, she gave us too much moisture. A lot of farmers, unfortunately, have not been able to get seed into the ground because it's been too darn muddy. So that means likely a lower yield for that spring crop, less wheat. All right, ladies and gentlemen, you can put down your maps and unpack your bags, I suppose. We've traveled a lot around the world this morning, and at this point of the brief, we need to shift gears. And we need to talk about why you should care about this very big problem.

and what, if anything, we can do. So let's talk about the first question, why you should care. There are a lot of reasons, I think. First, I sadly suspect that you're going to see a lot of humanitarian disasters around the world, and it's going to be heartbreaking. A lot of very, very heartbreaking scenes. Now, the international community knows that this is likely going to happen, and they're actually trying to help by offering up different loans and grants to countries,

to include poor countries, all so that they can buy wheat. but as you know by now, the issue is really supply. We're just really short this year. That brings us to the next reason that we should care. Do you remember what we discussed in Sri Lanka and Lebanon and Cameroon? It was this issue of social unrest. Hungry people are desperate people, and desperate people do desperate things. And that can range from mob violence to taking down governments.

So I suspect that we're going to see a lot of that kind of instability and violence in the coming months, all because we're going to have some very desperate people, all because of the supply and the cost of wheat. And when that happens, I promise that I'll brief you on all those events. So look, I think that this brief has been very exhaustive and interesting, hopefully helpful at some level, but we're missing one key piece, the thing that makes PDB, I think, special and different. How does this impact you and your family and your community? The answer is that America's economy as a global economy. You see, if our export partners abroad are struggling to feed their people or they're dealing with instability and violence, then what usually happens

is we sell less of our products and services. And that, of course, means fewer jobs are needed here in America to produce those same products and services. And that could be your job, either at the factory or at the company supporting the factory. And that leads us to our final question this morning, one that I'd be briefing you on if you were the president sitting in the White House. What do we do about all of this? Well, I suppose we could talk about giving poor country's money to buy whatever expensive wheat might be available. And I think that there might be a case or two where that's appropriate. Meanwhile, we could also encourage American farmers to plant more wheat next winter and next spring and then hope that Mother Nature will cooperate, unlike this year.

but I think that we should be honest with each other. Those are pretty imperfect and pretty unpredictable solutions. And that means that the only real way that we get out of this weak crisis is to somehow end the war in Ukraine. Now, the odds of doing that are pretty long. But there is a very small window of hope. And that's because Putin knows that his war hasn't gone as expected. He knows that his losses of military hardware and especially his professional soldiers, well, those losses have been really high, and it's forced him to change objectives.

We know that he's abandoned this idea, at least for now, of taking the whole of Ukraine or sacking the capital of Kiev. Instead, he's narrowed his focus to trying to take the southern and eastern parts of the country. So the real question is whether Putin would sue for peace to end his big mess, and could we get him to do it by mid-June? Because as we talked about, that's when we need those ports on the Black Sea to be open for business to start transporting the Ukrainian wheat when it's harvested. The odds of all that happening on that timeline aren't particularly good. But if Russia faced pressure from their remaining allies, like India, actually, Saudi Arabia, Brazil, and of course China, well, it's possible that we could see some degree of peace, maybe even just enough to allow the shipment

of Ukrainian wheat. This is a Bose moment. You've been there. Small talks going nowhere, but then the Bose speaker kicks in. Music you can feel fills the room, and no more chat with Danny from accounts. Your life deserves music. Your music deserves Bose. Find your perfect product at Bose.com. They say everything happens for a reason, but I suspect everything happens for a recess. Like this commercial break. Did you need 15 seconds away from music?

Or 15 seconds to eat arreases? Perhaps it's true. Everything happens for a rees. And so that's what I think our president should be focused on this morning, with all of his might, with whatever goodwill he or any of our allies have left with any of those nations. We need one last big, leave it all on the table, push for peace, however unlikely. But in the meantime, folks like you and I need to start adjusting our lives and expectations here at home. Because I suspect that, sadly, we are in the very early stages of what is likely to be an era of struggle. we're going to get through it. We have to have faith in that. But we need to start taking actions today

to prepare for that more troubled tomorrow. So build up your savings, retire your credit card debt, cut your housing costs if you can. We've got to start clipping those coupons and cutting out all the expenses that we don't really need. But above all, if you don't have good social networks to help you find a job or lift you up in spirit, holy smokes, I think you ought to do it. join a church, join a bowling club, whatever it takes to strengthen your social safety net, because I think that the only way that we're going to get through this is together. And that, ladies and gentlemen, concludes your morning brief. One quick note before I let you go.

You may have noticed recently that you're starting to hear ads as I deliver your briefs. Unfortunately, those are out of our control. They're done by the platforms from which you get this podcast. Now, I get it. Everybody needs to make money. Ads are a part of that. That's always been true of the news in America. But it may be that as we grow, as you subscribe and share the PDB with others,

then maybe we have a subscription service where people like you give a dollar or two a month. And for those subscribers, we offer a show with few or no ads. It's something that we're considering down the road. So tell you what, shoot me an email and tell me what you think of that idea. Is the PDB worth a dollar or two a month to you? The email address, as always, is PDB, at thefirsttv.com. That's P as in president, D as in daily, and B as in brief, at thefirsttv.com. Now, a confession, I'm a little behind on my emails, so please be patient if you do right.

I promise I'll respond. And with that, and as always, we close out our show reminding each other of why we are here, talking about our country and our world. It's the creed of every good spy and every smart American. It's from John chapter 8, verse 32. And you shall know the truth, and the truth shall make you free. Good day. USAA knows dynamic duos can save the day, like superheroes and sidekicks or auto and home insurance. With USAA, you can bundle your auto and home and save up to 10%. Tap the banner to learn more and get a quote at usa.com slash bundle.

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