Bare Shelves Winter 2021/2022
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Bare Shelves Winter 2021/2022

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.

Bare Shelves Winter 2021/2022

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

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

(SUPPLY PRESSURE)

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)

Underemployment

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.

https://www.wsj.com/articles/as-american-workers-leave-jobs-in-record-numbers-a-closer-look-at-who-is-quitting-11636894801

Not sure where this is going… but it results in (INDIRECT PRESSURE ON SUPPLY AND DEMAND)

Inflation

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)

Shows 15.7% increase in cost of meat, poultry, fish and eggs.  August 2019 through August 2021
Source WashingtonPost
https://www.washingtonpost.com/business/2021/09/15/food-inflation-faq/

Computer Chips

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.

https://www.consumerreports.org/buying-a-car/global-chip-shortage-makes-it-tough-to-buy-certain-cars-a8160576456/#:~:text=A%20major%20chip%20manufacturer%20says,navigate%20the%20current%20car%20market.

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)

Palm production

Lowest in 5 years 6% drop https://www.bloomberg.com/news/articles/2021-10-25/palm-oil-at-heart-of-edible-oil-boom-to-see-supply-crunch-endure

Edible oils prices spiking

https://www.zerohedge.com/commodities/edible-oil-prices-hit-record-high-food-inflation-treat-soars

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

(SUPPLY PRESSURE)

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

https://www.bloomberg.com/news/articles/2021-10-07/energy-crisis-may-trigger-u-s-winter-blackouts-xcoal-ceo-says

(Supply and Demand Pressure)

Covid Politics

More politics, nations locking down grain exports

https://www.nature.com/articles/s43016-020-00211-7

(Supply Pressure)

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

(Supply Pressure)

Cyber attacks against food and energy

https://www.zerohedge.com/commodities/cheese-prices-crumble-after-cyberattack-hits-top-wisconsin-dairy-producer

(Supply Pressure)

Finally – it is already happening

Conclusion

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.

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