Here Comes Another Peasant Uprising

Freedom Financial Archive | Originally posted Nov 16, 2022

I always want to pat these people on the head and comment on their naivety.

Who am I talking about?

Those Western liberals who think the “Arab Spring” was a cry for freedom.

It’s ludicrous.

Over there, they don’t even call it the Arab Spring. They call it the “Peasant Uprising” or “Wheat Wars.”

And that’s because a terrible drought caused the Peasant Uprising.

A drought means no water.

No water means a terrible crop.

A terrible crop means high food prices and a lower food supply.

The world is facing a global food shortage that rivals the 1930s and the “Dust Bowl.”

The World Bank said, “Even before COVID-19 reduced incomes and disrupted supply chains, chronic and acute hunger were on the rise due to various factors, including conflict, socio-economic conditions, natural hazards, climate change and pests. The impact of the war in Ukraine adds risk to global food security, with food prices likely to remain high for the foreseeable future and expected to push millions of additional people into acute food insecurity.”

The UN Food and Agriculture World Food Price Index is still trending at the highest it’s been in the last 29 years.

When we look at other peak years (2011 and 2021), we’re still at a record setting pace.

The year 2011 saw the start of the Wheat Wars, which started on the back of food shortages and price spikes.

Food prices remain above this pivotal level from 2011, with more pressure coming. The planting in Ukraine – for obvious reasons – is non-existent and more countries withhold exports.

India has been the latest to put up “gates” around wheat and rice exports to ensure there is enough volume for their citizens.

Diesel and fertilizer prices remain near historic highs. As we head into a pivotal winter season, those prices will likely rise.

Fertilizer is an energy intensive process.

And as prices (such as natural gas and diesel) move higher, facilities will either pass on the cost or cut utilization rates.

In Europe, fertilizer production has been curtailed due to the huge spike in pricing as well as to preserve natural gas.

Those Russian sanctions are actually European sanctions.

The U.S. is still one of the cheapest places to do business and local companies, such as our favorite stock, can capitalize on their advantaged position.

In comparison to previous shocks, this stock’s price has underperformed the recent increase in prices.

The market in general is very different today versus previous spikes, as weather patterns shift increasing drought in some areas and severe flooding in others.

This drives up the price of food and incentivizes farmers to do whatever is possible to increase yield.

Farmers can try to adjust crops or put down additional fertilizer to try to pump up yields.

Our Favorite Stock (white) vs the UN World Food Price Index vs North America Fertilizer Prices.

Here Comes Another Peasant Uprising

The only problem is the fertilizer market is facing additional supply issues!

I’ll talk more about the fertilizer market in our next daily issue.

Until then, you can learn more about our favorite stock by trying out The NEO Report.

Mark Rossano’s career has been built out of taking advantage of when the government squeezes the garden hose known as the supply chain.

As Editor of the NEO Report, his job is to continue to find those policy-created market dislocations and show you how to profit from them.

All the best,

Freedom Financial News