In an online discussion I threw a crazy estimate out that there was a 5% to 30% chance that the shelves will be bare for WEEKS if not MONTHS this winter.
A reader asked –
Just curious how you figure those odds. Thanks!
That got me thinking… why do I think the odds are so high? Well here goes…
There are a LOT of reasons I think we are likely to see a moderate increase in empty shelves – and even a chance for a severe to possibly catastrophic breakdown in the Jan/Feb timeframe. The list below includes references.
Port of Vancouver Closed
The Port of Vancouver is damaged, and may be closed or at least crippled. The Port of Vancouver is the 2nd largest port on the West Coast. This is more than 1/12th of the entire west coast supply chain OFFLINE. Very bad. (SUPPLY PRESSURE) https://supplychaindigital.com/logistics/supply-chain-blow-storm-cuts-port-vancouver
Nitrogen availability is down as is skyrocking price for glyphosate- cause pressures on already razor thin produces. https://fortune.com/2021/11/04/energy-crisis-food-shortage-security-fertilizer-prices-yara-ceo-madagascar-cop26/ (SHORT TERM DEMAND PRESSURE LONG TERM SUPPLY PRESSURE)
Russia piling on
Russia is through fuel on the fire regarding fertilizer https://finance.yahoo.com/news/russia-slap-quotas-fertilizer-exports-131808345.html This results in people buying up what we have now knowing we will have less in the future. (SUPPLY AND DEMAND PRESSURE)
Shortages of other Farming Supplies
Other supplies: https://www.iceagefarmer.com/2021/11/02/farmers-panic-cant-get-supplies-to-grow-food/ (SUPPLY PRESSURE)
We are Losing Farmers
Wisconsin alone lost 500 farms 2019 to 2020 and the pressure looks worse for 2020-2021 and into 2022 (take that nationwide).
(LONG TERM SUPPLY PRESSURE)
Supply Chain Chaos
The global chaos in supply is well documented and reported. If you aren’t aware here is more info https://wearethebackupplan.com/supply-chain-disaster
There are a lot of simplistic responses to the supply chain issues.
Unload faster! There’s are a fixed amount of cranes to offload, and fixed number of operators. So add more shifts! there are a finite number of qualified operators regulated to the numbers of hours they can safely work.
Well reroute to other ports! It is happening but adds shipping time, shipping distance, cost and those ports are not empty either. Also, there is a global problem (it isn’t just California, although California is leading the way in screwing up shipping). And the infrastructure expects 30% to 40% to come through California shifting that to Texas and Florida isn’t easy.
There is a backlog of containers on land just send more trucks! There is a shortages of truckers. Oh and truck chassis are regulated in California so old trucks cant legally operate even if they work in ALL OTHER STATES. Oh and more regulations on operators, truckers and equipment and vehicles. The USA is between 10,000 and 80,000 truck drivers short. https://fortune.com/2021/10/28/truck-driver-shortage-supply-chain-80000/
The supply chain mess is DEFNINTELY not over – but should theoretically start to look better IF they don’t keep losing people.
(LARGE SUPPLY PRESSURE)
Russia and Ukraine
Russia has been playing with supplies of gas, fuel and hinting at invading Ukraine. They hacked Ukraine power grid around Christmas in two years. If they do something it will likely be in the same timeframe. https://www.foxnews.com/world/ukraine-russia-troops-border-blinken-concerns-invasion (Supply and Demand Pressure)
New “politics” in California
The rules regarding max hourly work, who can enter ports and what trucks are allowed on the road – are causing yet more chaos
Chicago Trains are Backed Up
Just like the ports the major rail hubs are backed up, for similar reasons – trucking & labor. https://legallysociable.com/2021/10/05/global-supply-chain-problems-lead-to-25-mile-train-backup-at-chicago-area-railyard/ (SUPPLY PRESSURE)
Record number of people leaving workforce. Add in the jab requirements and people refusing (significant and underreported – look at the impact on airlines and they haven’t hit all the deadlines yet). Across the board, people are NOT joining the workforce in critical positions.
Not sure where this is going… but it results in (INDIRECT PRESSURE ON SUPPLY AND DEMAND)
The CPI says 6% or 8%. For the working class we are seeing more like 20% because of food and fuel. This creates problems that bleed into supply chain again. (INDIRECT) It makes suppliers and distributers unsure. https://www.theepochtimes.com/mkt_breakingnews/consumer-price-inflation-accelerates-to-fastest-rate-in-31-years_4096742.html (INDIRECT PRESSURE ON SUPPLY AND DEMAND)
New cars and trucks are hard to find – causing increase in used car prices also. It is likely that it will be 2022 or later before this changes.
Who cares about cars and chips for food? Well the parts and chips are also for farming equipment and parts replacement which is causing issues with harvesting (most have been worked around) but that continuing is putting more pressure on farmers. (SUPPLY PRESSURE)
Edible oils prices spiking
China Doing its Part
Issuing “buy food” order for people – they expecting food issues. https://www.reuters.com/business/cop/chinese-stock-up-food-temperatures-fall-covid-19-spreads-2021-11-03/ (LARGE DEMAND PRESSURE)
China bad weather and CROP failure
China buying wheat
https://www.reuters.com/article/china-australia-wheat-idAFL4N2QO1TF (SUPPLY PRESSURE)
China saber rattling
Doing exercises where they invade Taiwan. They might actually invade and start a regional or global war. Odds aren’t high but they are definitely not zero. To make things worse we are likely to reduce our front line fighting force because of vax mandates by 5% to 20% depending on the units (without Russia or China firing a shot). https://www.scmp.com/news/china/military/article/3155908/china-will-keep-escalating-military-intimidation-taiwan-experts
Reduced South America crop production
Numerous areas are seeing “Very dry planting conditions across Brazil and Argentina in October and November are likely to extend through the growing season” (SUPPLY PRESSURE) https://www.agriculture.com/news/crops/forecasters-see-mixed-planting-weather-for-south-americas-farmers
Issues of Crop to Table
Seeing issues with crop to table – harvesting issues due to lack of tires/parts. Packing issues due to lack of staff (direct). Supply chain and other very odd problems https://www.bbc.com/news/business-57856566 (SUPPLY PRESSURE)
Random Fuel Shortages
Fuel isn’t available and you wont have supply or demand
(Supply and Demand Pressure)
Fuel price spikes
This one is OBVIOUS
(Supply and Demand Pressure)
More politics, nations locking down grain exports
Meat prices spiking
As an example our local supermarket only received SINGLE load of frozen turkeys for thanksgiving. Instead of 2 to 3 semis full. Just ONE this year. https://www.npr.org/2021/09/14/1036678722/chicken-beef-pork-meat-prices-inflation-biden
Cyber attacks against food and energy
Finally – it is already happening
There is no overwhelming single thing that I can point to why I suggested that there will be bare shelves this winter. This list hopefully explains why I say 5% to 30% chance things will cascade to empty store shelves.
My odds of risk as 11/14/21 are
- 30% for of moderate to severe impact supply issues (fuel/food) in Jan 2022
- 10% WW3 in Jan/Feb 2022
So if you are prepping it doesn’t mean 100%. It means we are in a dangerous time, that is increasingly complex and unstable. You still need to plan for the GOOD stuff, and the 99% chance of inflation.