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You'll find all the links and details in the show notes. Welcome to the Daily Coffee Pro by Mapper Forward Friends on your host Lee Safar and this is episode two of a five-part series with Adjunct Professor at the University of Pennsylvania and founder of Tony Farmer's Garden, Tony Farmer. We are talking about the evidence for regenerative agriculture and in this episode we're going to ask the question, how will the global, how will the current global geopolitical situation impact the food supply chains? Tony, you talk a lot about this on your social media so I encourage everybody to go and click on the link in our show notes for Tony's Instagram.
This is perhaps, I don't know if this has been your experience but my experience for sure, getting people to care and believe that what's happening in the war with Iran right now and with what's happening in different places around the world, getting them to believe that this is going to impact the food supply chain has been incredibly difficult. They just can't connect those things. Are you having that experience? Not right now, so I had it for the last five years and suddenly everyone is listening and I don't know much credit to give myself there but I feel like it's a couple things have happened.
The wellness industry has bubbled up for better or for worse and is very concerned about pesticides and synthetic inputs so that's helping a little bit. Finally, yes, even though I feel like sometimes they lean towards pseudoscience right but I want them to care and they should care and then I also feel like the news has been astonishing and then I also feel like we are now seeing climate change on our doorstep so everyone knows that we have the two hottest years in recorded history and not just a little hot like shockingly hot and people are feeling that and I think it's made the whole thing go from like okay yeah I believe in climate change to like oh it's here like another good example would be you cannot get insurance for your home any longer in Florida, the state of California and now they're threatening New Jersey because climate change is causing these incredible storms that would bankrupt an insurance company so if you're one of those people you're faced with it directly you have to reckon with it and then what's happening geopolitically people go to the grocery store and they see how expensive food is and I pride myself in being like I want to look down the 10 years out and be able to tell people what to expect the last year has been nothing but shock to me like every morning I'm like oh yeah see that's coming um so yeah do you want to start with Ukraine like what do you want to start yeah let's start with Ukraine and then let's build up to what exactly is going on right now the most immediate threat yeah so we had a pretty stable global food supply I don't think coronavirus covid impacted this as well so like we thought it was very stable and it had been in place in years and the way that kind of works is um people are like how did this get so complicated well let's say you're a brand manager for a product line from Coca Cola like just a bag of chips or whatever granola bars my favorite example every year you're your board of directors and your boss it comes down to you like you need to sell four percent more you need four percent more revenue for your brand and it's my job to figure out how to do that and one of the ways I can do that is reduce my costs if I can't figure out a way to bump sales I can do throughs costs so what I do is I look around all over the globe I'm like where can I get almonds cheaper than I got them where can I get raisins cheaper where can I get oats cheaper and these markets pop up all over the place like maybe Peru had a great year with blueberries and the next year they had a bad one so we get these like like spider web of food system created where we're changing it all the time and um we're not buying all of our ingredients from you know a 200 mile radius of the factory we're importing from all over the world so covid definitely made us all go like oh my goodness it showed us the weak points in all of our supply chains and then I've talked so much about Ukraine but I think there's probably some people who don't understand what happened there so when Russia invaded Ukraine I don't think the world realized that 10 percent of the world's wheat um Ukraine is an incredible bread brats of a country lots of arable farming and lots of skill and there's 196 countries in the world give or take depending on the day and so for one country to grow 10 percent of the world's wheat and for it to come offline almost overnight was massive so we saw the price of bread grew up in the United States I'm sure it went up in Australia and other countries but the impact on um our most vulnerable nations was starvation they could not get bread they could not afford the wheat because the price went up so that was shocking and then we also uh started to recognize how much of our fertilizer was coming out of Russia not a majority but anytime you take any like take four percent of the fertilizer off the market and you're going to see a price increase for every place else and um the black sea was a war zone a little bit it was hard to get ships through there for a while Russia may have been doing some controls as well on controlling the level of exported fertilizer and so that's why fertilizer was so expensive for the rest of the world and why farmers have been complaining about how expensive it is um and then everyone asked well why don't we all just manufacture our own fertilizer and that might be a whole other podcast but um that is not something that you do overnight and there are so many complications to how we do that it can't be done yeah but that's a 10 to 20 year runway and even then it's difficult it's better it's better when we trade for it it's better for all of us so we've been dealing with that for four or five years now around six years of that conflict um and really thought we were kind of had settled into these new high prices which were not fun again most farmers are saying right now i i'm planting next year's crops and i don't see an opportunity for margin like i'm going to do this anyway because i don't know what else to do but based on the history of markets the last year the last couple of years and the price of equipment and interest rates because most farmers borrow in the beginning of the season to pay for everything and they pay back at the end they're like i don't see how we can make money but i don't know what else to do so we're just going to keep going forward and cross our fingers and hope that markets open up so fast forward to 20 oh utterly unfair of us to put that kind of pressure on farmers how utterly unfair yeah well and and in the u.s i don't i don't know deeply the farm policy for every other country but we pay commodity payments and subsidies to farmers that are only going for export which really needs to stop so they can't say they're feeding us they're people forget farmers are looking for a market these are businesses not some and this is another thing i really want to get through to everyone that all farms are not created equal at all it's hard to find even two that are like so there are big well-funded forms that get tons of government support have giant contracts they're signing a contract with china before they even put a seed in the ground and they are very wealthy some of them are even billionaires but multi multi-millionaires and then there's everybody else who is trying to farm regeneratively or organically or conventionally but they have to find their markets on their own it changes based on the global price which they have no control over and they may or may not get a commodity or subsidy payment if they do i've heard from many farmers it's not enough to make them whole it's just enough to set them from bleeding so yep i mean that's it's quite parasitic the relationship isn't it we'll keep the the host alive long enough so that we can take their taxes and we can make them feel like they're doing some good but an actual fact where we're really winning is by making tax revenues off everybody that they're selling food to and it's double interval it's hard to able text you know it's over and over because you're paying the term yeah yeah i derailed your thought they please go ahead sorry about that's okay so we jump up to 2025 when trump took office and farmers almost you were universally voted for him in the united states and i'm going to be u.s. centric right here because we have caused these problems for the rest of the world so he has been i have reported on him i report on him very neutrally um there's a lot of people that scream and yell i am policy based either it's a good policy or it's not i don't really care about his personality so i watched his policy and it was incredibly erratic um you know there's the term taco trump which it's a mean term like trump always chickens out is what it stands for but the point is taken that he's going to make a policy and then it could change the next day and that royals the markets it just it tends tidal waves all over the place and i would be irony sorry the irony of you saying that at the time that it is in the u.s. right now it is markets are closing on a friday which is typically when trump the when we're recording me on the 28th of march is typically when trump starts to really fuck with things and he waits till the markets close on a friday and then the cycle begins and then eventually he tacos yes so my husband is in the finance industry and he would tell you that you know the markets are closed on saturday and sunday and when that happens when something happens big on a friday it gives everybody a couple of days to cool off so and then other times you want to make a policy while the market is open so you can see it move if that's what you want and so these are strategies he's employing to manipulate the market there is no doubt so um i i hypothesize that most people would rather deal with someone that they don't trust who is very predictable than someone that they think they trust who is very unpredictable i don't know that's true for everyone but i feel like the world most foreign countries have a certain level of trust with each other but there's always some distrust but if you are predictable in the way that you behave china is predictable sometimes brazil is predictable canada is predictable australia has been predictable the united states has been very predictable for a very long time what is really angering people is we don't know what he's going to do next so we can't plan and this is turn the markets upside down and the so the last year we saw tons and tons of canceled really solid agricultural policy we canceled us aid which meant there are a lot of people who are you need to know this if you're american there are people right now and children who are starving to death because we cut that that that support i don't mean they're hungry i don't mean they're food insecure i mean they are dying because we turned it off overnight and it was no plan in place we also canceled billions of dollars worth of support for farmers in terms of uh there was a biden program twenty billion dollars it was supposed to support um the building of sustainable agriculture like paying for solar panels and electric fences and things and upgrades for farms to help them they signed for that money they took out the loans to buy the equipment trump canceled it and i still to this day i think they all defaulted i don't think there was a bridge for that i don't know what happened they probably had to try and sell the equipment or lose it so we had high cost of fertilizer we had markets that were completely unpredictable and our trading partners turning away from us not because they didn't trust us they never trusted us but we were so unpredictable and that annoys people like i want to know i can get this for this price range from you to feed my population and they're like i thought you would mean something absolutely absolutely and we're not the trump administration is not keeping its word to its own citizens right now let alone in countries so china was like screw it i'm gonna go talk to brazil brazil's been putting the infrastructure in this for years all these new trading blocks america marcosor and arsep and all these new trading blocks around the world are all linking arms and creating trade free um i'm sorry terra free trade blocks and cutting us out we are cut out and then the last couple of days like even since you and i planned this podcast everything has changed so we launched a talk on aran and well and i feel like the trump administration woke up the next day and went oh wait the straight of our mood this is gonna hurt us i mean you can't write this movie it feels like it should be a simpsons episode or it has been something crazy it probably has they probably predicted it so i'm fond of saying no one from the trump administration calls and lets me know what they're doing i have no insight there i don't know what they thought was going to happen i don't know if they thought they could just do a venezuela like in and out really fast with no consequences it's apples and oranges though apples and oranges you and i know that right that's a theocracy it's a very different three thousand year old theocracy was not gonna roll overnight so um they are playing hard ball with us right now and um everyone is focused on oil but i focus on the fact that 30 percent of the world's fertilizer comes through this rate of hormones and this is important it's ingredients in many cases which means once we can ship it out it still has to be manufactured into a form that farmers can use in many cases or an expert about sulfur from there urea and it takes several weeks for it to even get into port then it has to be made into the type of product bagged up by those companies that has to be distributed by truck to the farmers and the timing could not be worse because this is fertilizer application time and it's also when farmers are deciding what to grow so if i was gonna grow corn this year maybe i was like that soy debacle last year i'm not doing it again i'm growing corn i know there's a market for it but corn is a heavy heavy nitrogen feeder so when i want to avoid spending the extra money on nitrogen i grow soybeans because soybeans fix nitrogen into the soil they don't really need added nitrogen save money right so farmers are right now going i i don't even know what to plant if i plant soy i might not have a market for it if i plant corn i might not be able to find the fertilizer and they are panicking and we are having mass bankruptcy mass farm closure in the united states and um and again if this had happened in january we would have time to figure it out but it happened in march late march and there is no time to figure it out so we believe that by we're gonna see prices increase right away just from oil right which impacts everything and then we will see in the late summer and into fall and into next winter the potential of drastically increased food prices as this starts to catch up with us and i can't say what that will look like or if there's a magic bullet out there that will fix it but right now that's that's where we are right now and not just ask the globe so and then we have it on diesel diesel over six hours a gallon right now and people don't realize farm equipment all runs on diesel so they're um you and i might drive to the grocery store or i could carpool with somebody their job involves driving diesel equipment all day long and so their ink their inputs for fuel have just gone up by 30 percent 33 percent overnight and the trucks to get the food from the farms to the stores the truck them all over the country to get them from one state to the other the trucks that take coffee from the farm as cherry to the meals to process it right the same as the weed all bagging all that's diesel all of its diesel yeah and going back to fertilizer the the thing that has been frustrating to me is that people say but this is this is just what farmers have signed up for when they choose to be farmers and i'm like do you understand what just happened in the middle east with fertilizer fertilizer is made at natural gas plants and the u.s.
and israel just took out cathars major the largest gas natural gas producing plant on the planet it was just destroyed it will be five years for them by estimations for them to get that back up and running go ahead you can see you're busting no go for it go ahead everything is accurate i my understanding is that they destroyed the machinery there and not actually destroyed the actual gas field i don't know that that's accurate but just rebuilding the infrastructure will take a long time um and we still do not have an agreement with them and it will make the cost of natural gas spike and it will also increase like leadership of other countries who have natural gas resources will be very tempted to access that even though it is not good for the environment so we're constantly struggling against we have got to stop fracking we've got to stop burning fossil fuels and yet we're so dependent on it and how do you our leadership of every country at the end of the day they really do want their keep their people you know happy and really really high prices don't do that so they're going to be tempted to strategize in ways that they have not had to strategize before to meet that need i don't know what's going to happen when these prices hit i don't i mean we're not looking at going from a comfortable consumer who had lots of money in their purse to a consumer who's going to be hit with sticker shock no sticker shock started happening five six years ago when covid happened and it hasn't stopped and it just down six years later there's no way i can see it going down the the people who are producing the food are operating on razor thin margins the people who are importing the food are operating on uh razor thin margins the people who are taking the wrong imported raw material and turning it into a consumer product are operating on razor thin margins they are so exhausted and stressed that they have no idea what to do and then the people who are facing the consumer and selling it as a consumable good and buying it from a wholesaler they have nothing left they have continued to increase the prices month after month or year after year over the past six years and they have no runway left they don't know what else to tell the consumer but what's more important is the consumer is now using afterpay to buy their groceries they're using what uh have you heard of afterpay you know those those platforms where you can oh yes oh yes yes and people are defaulting on those for the first time really badly yeah and but they are using those they're not using them to buy camp i mean they are using them to buy cameras yeah but for the first time since they've been established the majority of those payment schemes are being used to buy groceries so we're buying groceries on credit and with high interest rates so we're buying groceries and paying we're buying this week's groceries we're paying it off over four weeks and then next week we're buying our next week's groceries and paying them off with four weeks people need to understand how what signal this is sending and people just screw it though i don't you think people are just going i just i can't fix any of this and i keep hearing it's going to get worse i'm just gonna do what i need to do right now i need to feed my family i need to eat and when i go bankrupt half the country's gonna go bankrupt at the same time and maybe there'll be some big program to fix it and maybe there will be maybe we'll have the kind of leadership that can address that but you're correct those those razor thin margins and it is the people who have the most power and are the wealthiest who are making these decisions for us they're the ones who are making decisions to build giant data centers and they're the ones that are making decisions to invade countries that raise our prices on everything and um and tear up the entire world and take them off yeah i don't have a i have an explanation for it you gave us the perfect off rank to get into the next episode where we're going to be talking about the urgency in the food security situation and we aren't going to be talking about tariffs in that episode so join us for the third episode of this series guys peace of and pain up but i have an amazing rest of your day if you enjoyed this episode consider supporting mapper forward our guests and advertisers on social media subscribe hit the like button leave a comment and share this episode with a friend and if you'd like to support our work more directly become a paid premium youtube subscriber or patreon backer to get early access to the show add free directly to your inbox each week you can find links in the show notes