Agriculture Archives - Zeihan on Geopolitics

The Fire Hose of Chaos: Agriculture

US agriculture is heading towards a major crisis, and yes, Trump’s trade policies are to blame for this as well. Many of the US ag export markets are closed off, and farmers are feeling the heat.

China has already cut purchases of US agricultural products to (nearly) zero, and this market is likely gone for good. Not long ago, China was the largest buyer of US products, meaning US farmers are losing a huge chunk of change and output will need to shrink accordingly.

The meat industry is reeling. Demand is falling, per-animal profitability is tanking since there’s no export market for byproducts, and overexposed beef producers are in for it. Row crops like soy are in trouble as well since China was the largest market for much of this. Specialty crops like pistachios and cherries will face devastating losses.

The only path to recovery is through an extensive, long-term government support. Think France’s permanent ag welfare. Without it, American farming will face a collapse worse than the 1980’s farm crisis.

Hey, y’all. Peter Zeihan here. Coming to you from Colorado. And today we’re going to continue our Firehose of Chaos series about how the Trump administration’s domestic and international policies are affecting the US economy. And today, it’s the agriculture edition. Agriculture in the short to mid-term is probably the sector that’s facing some of the sharpest challenges. And it’s entirely feasible for me that over the course of the next 3 or 4 years, we’re looking at somewhere between a quarter and a third of U.S. producers just going out of business because of the trade war.

The issues pretty straightforward. Trump has basically picked fights with America is number one, number two, number three, number five, number nine, number 11, number 12, number 14, and number 17th largest trading partners when it comes to agricultural exports. And as a rule, agricultural importers fall into two categories. Number one, those who don’t have a choice, they just can’t grow the food themselves.

And then those who do have a choice, who can always switch products or switch consumers. And when it comes to export destinations like, say, China or the European Union, they’re definitely in the latter camp. And so what usually happens is that whenever there’s a trade spat for any reason, anywhere, agriculture is usually the sector that is targeted first.

A couple reasons for this number one, agricultural interests around the world tend to be very politically powerful, and they, can make their desires known to the local political system. And second, people have this wildly inaccurate view of how farmers work that they might be a little bumbling, that they’re a little backwards. But of all the audience that I ever speak to, they are always the most sophisticated and always the ones that look for the most because they have to.

Everything that they do is dependent upon supply lines and manufacturing and finance Trends go out a year, five years, a decade because of the decisions that they make now are going to reverberate throughout their operations for years to come. And this is true everywhere. So when there’s a trade fight, the other side knows that if they can damage agriculture, they can take producers off for the long term.

And that’s exactly what is happening now. Specifically, the United States, number one export partner for agricultural produce and meats is China. And because we now have in excess of 100% tariff going both ways on products, U.S. sales to China have functionally gone to zero. And they will not be coming back this year or next year or the year after.

And considering China’s export dependency and its demographic decline, it is highly unlikely that American farmers will ever have access to unified China again. China will break before that is fixed. And so you’re looking at an industry that is basically tapped out. Pretty much all the growth that has happened in American agriculture since the year 1995 has been from export markets.

They’ve been a direct beneficiary of hyper globalization, arguably the sector after tech and finance in the United States that has benefited the most. And now that some of their major consumers are simply beyond them, either because of economic stress or the trade war, they’re looking at basically needing to reduce overall output by something around 20 to 25% on a nation wide basis.

Now that’ll change specifically based on region based on crop based on season. But that is a horrific headline number that the industry now has to deal with. Let me break this down into three general categories. So first, meats, as the world has become richer, they want more protein, whether that is chicken or pork or beef or, fish.

And the sector that sells the most into the Chinese market is not pork. I’d like to take a little bit of credit for this one. I have been warning the pork guys for years that if they bet the farm on China, they will lose the farm. And in the aftermath of the last trade war with the Chinese during Covid, when, Trump was president, we had our phase one trade deal.

The Chinese decided that they were going to try to slim down their exposure to the US system. And the pork guys suffered, and they learned their lesson, and they’ve diversified into other markets. Well, the beef guys were like, oh, there’s a protein shortage in China. We can help with that. And they just surged into China and they made themselves exposed in a way they had never had been before. Well, now they’re kind of screwed, particularly those who are operating in the industry.

That is more export geared. And that’s where the slaughterhouses in Nebraska, South Dakota and Missouri kind of fall in, Texas. There’s a little bit more insulation because most of their market is either domestic U.S. or Mexico.

And hopefully, hopefully, hopefully, the Trump administration will ultimately salvage NAFTA in some form, in which case their primary export market will be okay. But if NAFTA goes away, then Mexican industrialization goes away and then the Texas agricultural sector goes away. That is still much a TBD, but the kind of stuff that’s locked in at this point. Also keep in mind that not everybody eats the same things.

So the United States does the select cuts the rump, roasts the tenderloins, or we grind it into ground for burgers, things like that. We we do that for all of our meats. But there are other parts of the animal that Americans like that other people are like, oh, that’s delicious. So chicken feet, for example. Entrails. Oh, Menudo. Or the Koreans are big fan of ass sphincters. Yes, yes. They cut out that little bit, they flip it in and they prepackaged it and microwave it. And they’re just like, know. And I’m just like, love me some Korean food. But no. Anyway, based on the animal and the region, somewhere between 10 and 30% of the proceeds from the sale of an animal comes from those.

What we would consider undesirable parts that are sent to foreign markets where they just yak it up. Well, that’s gone. So we’re now looking not just at a headline reduction in the number of head of cattle or swine or number of chickens that we need. Also, the profitability per animal just dropped by about 25%. If your business had a drop in income of 25%, what would that do to you?

And that’s a secondary effect to what’s happening to the agricultural folks in the meat production sector, a second row crop. Primarily, we’re going to talk here about corn and soy. In the short term, soy is the really big hit here. The Brazilians had a great production year last year, so there’s plenty of soy in the global markets.

And the Chinese will never buy soy from the United States again unless they have no choice. So we’re basically looking at that sale drop very close to zero. The decisions for planting for this year have already been made. So if you are a soy farmer, you are. You’re kind of fucked. There’s really nothing you can do at this point.

It’s too late in the season. Longer term, soy will do fine because it’s a cheap protein. And as the world, globalized as people are going to do, the switch the other direction for meat back to plant protein. So soy long term looks great. It’s there that corn’s a problem because if you’re exporting corn, it’s really only being used for animal fodder.

About the only, good thing I can put there is that if you grow corn, you can also grow soy. You actually need fewer inputs for it. You have to worry about a different sort of crop rotation, but you’ll ultimately be okay. But for this year. Ouch. For the soy folks. And then finally, specialty crops. This is mostly an issue for the West Coast, especially for the California Central Valley, but really, there are pockets of specialty crops all throughout the United States.

Michigan is known for its cherries, for example, apples out of New York. Any time you’re sending a specialty crop anywhere, you’re going to be sensitive to things like currency changes, which the United States isn’t doing so hot. So the prices have gone up, so sales have gone down, or climate, or especially politics. And in the case of China, they have basically underwritten the development of the US specialty crop industry for the last several years.

The Chinese follow a hyper financialization model where they basically print currency like mad, expand their money supply like mad in order to underwrite their industrialization. They treat money as a political good because that is what is necessary to keep the population employed and therefore not rebelling. Well, that also means that they’re relatively cost in sensitive, because for them, money doesn’t have an economic value like it has in a Western system.

And so they will pay anything for anything. Well, that means that they have paid for the development of specialty crops throughout the United States, especially on the West Coast, and doubly so in California’s Central Valley. And if you look at what the Central Valley produces, for example, things like pistachios, which I am doing my personal best to establish an American baseline for that.

Most of it goes to China. And now that is going to zero. So if you’re looking for a zone that is particularly screwed, there is very, very little in California’s Central Valley that is going to survive the next two years because their primary source of demand, the majority of the demand has just gone away completely. Now, can we save all this?

Well, like I said, agriculture is politically powerful. Trump considers rural communities to be part of his core constituents. But you have to keep in mind a couple things. Number one, Trump has not so far in his term treated his allies particularly well. He’s demanded a lot, but he hasn’t offered a lot in return. So if the farmers are going to get bailed out in a way that they were the last time around, Trump has to go back to Congress and get more money.

That hasn’t happened yet. I’m not saying it can’t happen. I’m not saying it won’t happen. I’m saying it hasn’t happened. And if you’re going to keep all of American agriculture above water, it’s going to take a lot more money than last time. And more importantly, it’s going to take it for a lot longer. China is not coming back.

Globalization is not coming back. The ability of the global system to absorb American agricultural production is not coming back. And until such time as we are on the other side of globalization and other agricultural producers, most notably Brazil, have shattered. We’re looking at a really hard transition time for anyone in American AG, especially if you’re producing protein or specialty crops.

The only solution. Is to become France. France gets a lot of crap for good reason for supporting its agricultural sector, even when it is wildly disconnected from demand trends. They see it as a cultural issue. And if we’re going to keep our current slate of ranchers and farmers alive, it’s going to take tens of billions of dollars a year from now on,

Or we get something about twice as bad as the 1980s farm crisis, which drove ultimately about 20% of agricultural producers out of business in a five year period. Those are our choices.

Of Birds and Bugs

There are two issues we’ll be discussing today: Bird Flu and the new disease outbreak in Congo. These topics are unrelated, but there is a lesson to be learned in their comparison.

A severe bird flu outbreak has egg prices soaring and shoppers reconsidering their breakfast choices. The newly appointed Agriculture Secretary Brooke Rollins proposed a handful of ideas to end the crisis. After consulting experts, she abandoned those ineffective ideas and opted for an aid package that was a bit more informed.

Over in Congo, a new disease has broken out and at the time of recording over 400 people had been infected and a significant portion of those were killed. Usually, the US would have a swift response with boots on the ground trying to get to the bottom of this; however, new Health Secretary RFK Jr. has gutted those teams and crippled the United States’ ability to respond. Oh yeah, and Trump also severed ties with the WHO.

Rollins doesn’t have the background or knowledge on how to address a crisis like the bird flu, but she put forth the effort to learn and change: that is something I can live with. RFK Jr. lacks the same competencies necessary to carry out his role as Health Secretary, but he is too rigid to even attempt to learn and adopt new strategies: that is a level of incompetence that risks catastrophe.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey everybody. Peter Zeihan here. Coming to you from Colorado today. We’ve got two completely unrelated topics I’m going to weave together into a little story. The first is here in the United States. It has to do with the bird flu epidemic that has been raging through U.S. agriculture for the better part of three years now. It’s now gotten to a point where it’s just as bad as the really bad one we had back in 2015.

If you remember that far back. Egg prices have more than doubled. They’ve gone up by like 40% just this year. And there’s no reason to expect that to go down at all. Considering how much inflation was a part of Joe Biden’s defeat, relevant topic. Trump, of course, said on his first day he’d put things in place to fix it overnight.

That’s not how it works. So let me explain what’s going on. With the first phases of what the Trump administration proposed, and then we’re we’re actually going to go. So, the chicken industry is a split between boiler chickens, which are the ones that you like, buy pre-cooked at the store, chicken parts or whatever. And then layers and the layers, of course, make the eggs two different functional species.

The bird flu situation is affecting the layers, not the broilers.

Now, among that these chickens because you know, they’re laying eggs have to be kept in a relatively confined place in order to generate the eggs in sufficient density so they can be harvested, safely, effectively, and above all, from a biosecurity point of view, cleanly, however, birds are filthy, filthy creatures.

They are the rats of the sky. And if you have any interaction between them and the outside world, they interact with wild birds and bird flu is a wild thing, and it is endemic in every bird species on the planet. And so any sort of interaction risks getting the bird flu from the wild species into the domesticated species that are laying the eggs.

And that’s really the core of the problem here. Also, the turnaround time from first infection to death is typically less than 72 hours, with only about 48 hours between first symptoms and death. So if you become aware that the chickens in your enclosure that just even a few of them are sick on Monday, you’re going to have the majority of your chickens either diseased or dead, by Wednesday.

So when, Brook Rollins, who is the new agricultural secretary, who has no experience in agriculture whatsoever, I’d be surprised if she owns a pair of boots. She may have never set foot in Iowa before. Not sure about that one. Anyway, her policy background is very limited. She’s a highly ideological person. She serves as an advisor to the Texas governor Abbott.

And basically the sum total of her, recommendations to him is that, other jurisdictions, not the state, other jurisdictions shouldn’t raise taxes. It’s not that I really disagree with that statement, but that’s not a lot to hang your hat on if you’re going to be agricultural secretary, when that is the most scientific of the various, agencies we have.

The way it works in the U.S government is you’ve got three tiers, at your top, you got your political appointees. Those come and go with every administration down below. You’ve got people who are technically, political appointees, and the president does have the authority to remove them at a whim, but they’re generally staffed with people who know what they’re doing with a lot of experience in the industry or the sector or whatever.

It happens to be. A lot of scientists, a lot of logisticians. And usually these people are allowed to go from administration to administration because they’re largely apolitical jobs. And there’s nowhere where that is more true than the USDA. However, they have all gotten caught up at USDA, just like in every other, agency.

And those are people have all been purged. So the people who know how to make the trains run and keep the birds alive, they’re gone. Rollins comes in, she inherits this bird flu epidemic, and she casts around for ideas. And the first thing that comes out of her head, because it was her first briefing, was the biggest issue going in agriculture right now is let’s improve biosecurity.

Let’s improve medication of the birds. And let’s, do mass vaccination of the birds. Now, the surface, none of those sound like dumb ideas, but they’re very, they’re very freshman mistakes for number one. The vaccine. Yes. A vaccine for bird flu does exist, but it’s not through full trials.

It’s never been tested out in a commercial flock. So that’d be kind of a question. Also would cost about a dollar per bird and it has to be injected manually. Now, I don’t know if you guys have ever gone chasing chick chickens, but your typical bird operation in the lane industry in the United States has 3 million of them.

So you have to pick up a chicken, inject it, carry it to another bio, secure facility to drop off, do that 3 million times. Well, folks, from the point that a bird gets the ability to generate eggs to the point that you retire because it can’t anymore is only 18 months, so basically they’d be retiring faster than you could immunize them. Second medication. There is none. Bird flu triggers total organ failure in under 72 hours. So that just kind of goes out the window. And then there’s just improved biosecurity. That’s like I hate to point out the obvious, but if your life savings is involved in a bird laying operation, your biosecurity is the damn best you know how to do because there isn’t a medication and there isn’t a vaccine.

Oh, one more thing on the vaccine. It’s a live virus. Vaccine? Like most vaccine, this is not an MRI, and this is not one of the more advanced ones. It doesn’t leave any biological components in your body. And, you know, you vaccine skeptics, you can suck it. But it does leave, virus residue in your system, which means that that bird will then, at the end of its life, test positive when you’re testing it for bird flu, if you want to export it.

So you can’t export it either. So it’s a dollar on the front end. It’s administration costs, it’s transport costs. And then on the back end you can’t get it’s money to money from your retired birds. Anyway, the churn in this system just means that if you detect bird flu, you just have to kill everything in that enclosure.

And from the point that you introduce a new chick to an enclosure, to the point that it’s laying eggs, that’s only six months, you can’t catch up with that with immunization anyway, despite the fact that the Trump administration has purged everyone who knows these things from the top tier of USDA, Brooke Rollins, despite her faults, isn’t stupid. And so she went out and spoke with people who knew things in the industry, and she realized that the medication and the, immunization angles of her original idea weren’t feasible.

And so she backed away from something that would have just cost the industry a huge amount of money and probably reduced the number of laying eggs, which would have driven inflation higher. Crazy idea. She’s still working on biosecurity, which I don’t think is going to go anywhere, but she was told by Trump to get this under control, she had to announce something.

She realized that everything it could be done was being done. She announced something that was $1 billion, which, you know, in the world of Trump, world is, not a lot of money. And it’s going to provide a little financial support for, the ranchers and the farmers so that maybe, maybe, maybe they can bring some more facilities online.

It’ll have no real impact on inflation or legal aid numbers. This is someone who is out of her depth and is trying to become more schooled on the topic, and is doing the best she can. It’s a degree of incompetence that I can live with that story one. Story two is happening over in Congo where we have a new disease.

It looks like hemorrhagic fever. Whether it’s the Crimean Congo version or Ebola, we don’t know. In fact, the people who have had it tested negative for both of those. It’s something new. Apparently, it’s already infected over 400 people. It’s already killed over 50 people. It seems to burn out in 2 to 4 days, which is a really fast time to kill people, especially if the mortality rate continues to be over 12%.

It seems to be so far. Now, normally this is where Department of Health and Human Services would come in. Normally this is where a group that’s called the Epidemic Intelligence service would rush over there, help set up quarantines, get some tests done and find out what we’re dealing with. But RFK Jr, who was our new HHS secretary, gutted the Epidemic Intelligence Service on his first day.

And he doesn’t like the medical industry and he doesn’t like vaccines. And so the IHS is basically running on two out of its four wheels right now and doesn’t have the capacity to participate. The second organization we rely on is the World Health Organization. But one of the first things the Trump administration was several contacts with the W.H.O..

So as regards this new disease variant, we in the United States are in the complete dark, and we are relying on other countries to come up with information and choose to share it out of the goodness of their own hearts. Brooke Rollins is someone who’s in over her head and is trying to learn. RFK Jr is a waste of skin.

When you look at people either in health or in agriculture, they have a very low tolerance for bullshit. Because if you screw up the health system or if you screw up the food supply chain, people die. But now we have two different examples, two polls, if you will, of what can happen based on the core intelligence and the personality of the person you put in charge.

Competence would be nice, experience would be nice. That would be amazing in both of these sectors. But we’re seeing one approach that involves learning on the job and one approach that involves pushing your own preconceived notions that are based on no facts whatsoever down the throats of everybody. One of these is not a disaster. The other one very well is likely to become one.

British Agriculture Is About To Suck Even More

Listen, I’m not one to scoff at a nice serving of fish ‘n’ chips, but when you’re serving baked beans for breakfast…that’s where I draw the line. You guessed it, we’re talking about the decline of British agriculture today.

Protests by farmers broke out on Tuesday, which highlight the growing issues with British agriculture. The Brits have been relying on imported food for quite some time (which opened their eyes to what real food tastes like), but that’s all going away.

Brexit has worsened the already declining agricultural industry by severing access to EU imports (to say nothing of EU subsidies) without an alternative source in place. Since local farming struggles with high costs and low quality, Britain will likely remain uncompetitive or be forced into an unsavory deal with new imports.

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Hey everybody. It’s Tuesday the 19th here, coming to you from a blustery Colorado. And today we’re talking about food in the United Kingdom. And I know, I know, I know, your first instinct is blehhh.

But I think it’s important to understand why. The issue today is that we had protests in London, right outside of Westminster, by about 10,000 farmers who were technically protesting a change in inheritance tax.

So the details of that really don’t matter too much, but we’re seeing a lot more aggravation among folks in British agriculture for very good reason. The sector is being phased out. Now, this has been, to be perfectly blunt, a long time coming. Britain was the first country to really apply deep water navigation to a value-added economic system.

So as the Brits got access to the wider world, their diet changed, their agricultural system changed. As a rule, oversimplifying, the more variety you have in climate zones, cultures, and soil types, the wider variety of food products you get. And to be perfectly blunt, England is all white. People in the Scottish are also very white, and the Irish are still more white people.

And they all are in the same basic climate zone. So there’s a limited number of products that you can grow. But when the British Empire got access to India and the Americas and Southeast Asia and all the rest, all of a sudden, they could import food products from the world over that could be grown at a lower cost and in greater variety than what they’re going to have at home.

So a greater and greater percentage of the British diet became sourced abroad at the same time that the value of those crops went up and the variety of those crops got more interesting.

If you fast forward to the world wars, the Brits were importing the majority of their calories on any given day. And so, when the Germans started their U-boat campaigns, you can understand how things got kind of lively very, very quickly.

Fast forward to the 70s, when the Empire was dying and the Brits joined the European Union. They lost access to a lot of the stuff around the world but gained access to all the stuff on the continent. And while the European system is definitely white people, there’s a lot of different varieties of white people in a lot of different climate zones, cultures, and soil types.

So they were basically able to displace what they lost from the Empire with what they could get from the European Union.

Well, seven years ago, the Brits voted for Brexit and have yet to put a replacement system in place.

So they’re losing access to the European stuff and falling back onto what the island of Great Britain can produce itself for the first time in about three centuries. And their discovery kind of sucks.

The future for agriculture in Britain falls into one of two categories. Either the Brits will seek a free trade zone with the European Union or re-membership, or they’ll seek something with North America, which will give them access to that greater variety at a lower cost.

The problem here is that they’re not entering into either of these sets of negotiations as equals. They’re entering as a country that has basically shot themselves in the foot diplomatically, strategically, and economically. They’ll have to take whatever is on offer. And if there’s one thing that the Americans and the Europeans agree on in agriculture, it’s theirs first.

So if the Brits want to join either system, they’re going to basically have to sign off their agricultural sector and import pretty much all their products from whoever their partner ends up being.

In the case of the European Union, that’ll be of higher quality, which is something their domestic agricultural industry can’t compete with. And in the case of the United States, it’ll be lower cost, which will also be something their sector can’t compete with.

So, regardless of how you look at this, the future of British agriculture is one of two things: purely domestic, high-cost, low-quality—or gone, because they’re importing food from somewhere else.

The protests we saw today are just the very, very beginning of what is likely to be a painful and disorienting destruction of the entire sector for the entire country for the entire rest of history.

The Geopolitics of Wine

Today’s video is fueled by Scott Base Vineyard in Cromwell, New Zealand. After all of the time I’ve spent in New Zealand, this is far and away my favorite winery.

Wine is a top 20 internationally traded commodity by value, so it definitely has some geopolitical backbone to dissect.

The main distinctions in the world of wine come from vineyards being irrigated vs. not. Irrigated growth is relatively new in the world of wine, so Old World vineyards have to compete in new ways, mainly by moving up the value chain in the cellaring process.

Aging demographics are also disrupting the wine industry since capital becomes more expensive as older populations begin sucking money from the system. Wine is highly capital-intensive, especially when a decent yield takes several years after putting vines in the ground.

So countries with access to capital and/or young demographics have a leg up on the world of wine. The Kiwis and Aussies will be all right. Argentina is probably going to hurt. And most of Europe’s wine complex will struggle here soon…except the big dog, France.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Deglobalization’s Impact on Global Food Exports

Image depicting global grain and coffee sacks for export

Globalization has allowed us (meaning humans as a species) to make some of the worst lands farmable, inhabitable, and even prosperous. But what happens to global food exports when globalization ends?

There are five requirements to sustain successful agricultural exports in a deglobalized world: productive arable land, petroleum for fuel, and three essential fertilizers (potash, phosphate, and nitrogen). If a country doesn’t have access to one these, they might be SOL.

North America is the big winner here, specifically the US and Canada which have almost everything right at hand. Other regions that top the list are Argentina, New Zealand, Australia and South Africa, although these countries may struggle with fuel supplies. Brazilian agriculture will suffer due to poor land quality and heavy reliance on fertilizers coming from China and the former Soviet Union (which are likely to destabilize). Any of those specialty crop producers, especially those in the California’s Central Valley, will likely have to pivot business models due to shrinking markets, high costs, and dependency on Chinese markets.

Deglobalization could cause a potential drop in calorie production by a third and the fallout would be devastating. We’re talking widespread food shortages and catastrophic levels of starvation.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everybody, Peter Zeihan here, coming to you from central Yosemite. I’m standing by another mountain lake, which, being unnamed, is now officially called Peter’s Other Lake! And it even has a beach—pretty cool, right?

Anyway, today we’re diving into another question from the Ask Peter forum: what’s going to happen to global agricultural exports in a post-globalized world? Short answer—nothing good.

To sustain agricultural exports, you need five key things:

Arable Land: You’ve got to have a lot of productive land.
Petroleum: Agriculture on a large scale relies heavily on internal combustion engines. There’s talk of electric tractors, but the technology isn’t there yet. Their charge doesn’t last long enough, and they don’t have the power to do meaningful work. So, unless you’re talking about a small electric cart for something like apple picking, we won’t see electric solutions this decade, probably not even next.
Fertilizer: Fertilizer comes in three parts—potash (potassium), phosphate, and nitrogen (usually derived from natural gas). These are sourced from different parts of the world. For instance, about half of the world’s phosphate exports come from China, and that’s already problematic since China might face disintegration. Worse yet, those phosphate deposits are in interior regions prone to secession. So, say goodbye to that supply. Potash is mostly found in Belarus and Russia, but thank goodness for Saskatchewan in Canada. As for nitrogen, which is made from natural gas, it’s more widespread, with the U.S. being the top producer.

Without access to all these elements, growing food at scale becomes much harder. In a post-globalized world, the number of places that can sustain agricultural exports shrinks significantly.

At the top of that list is North America, particularly the U.S. and Canada. Saskatchewan has potash covered, the U.S. has plenty of nitrogen, and both countries boast some of the best farmland in the world. For phosphate, once you move away from China, you’ve got options like Morocco, Israel, Saudi Arabia, and even Florida.

Other regions in decent shape include Argentina, which has highly productive land, and South Africa, New Zealand, and Australia. While these countries, with the exception of Argentina, can’t produce their own fuel, they are outside major conflict zones. So, if there’s fuel and fertilizer available for trade, these are likely destinations, as they can pay in hard currency.

Brazil, however, is in trouble. It has some of the worst land quality globally and is the largest importer of fertilizer, relying heavily on China and the former Soviet Union. Brazil’s status as an agricultural powerhouse isn’t over yet, but you can see the sunset from here. Parts of southern Brazil near Argentina may fare better, but the explosive growth we’ve seen in soy production is temporary.

In the Old World, France stands out. Like Argentina, France has excellent farmland. It’s also far enough from conflict zones to remain relatively safe and close enough to the North Sea for natural gas. If there’s any international trade left, France is one of the few nations with a capable navy to secure its sea lanes.

But that’s still not enough. We’re looking at global calorie production potentially dropping by a third. And that means a lot of starvation.

Now, beyond staple crops like wheat, rice, corn, and soy, there’s also a thriving trade in specialty crops—cherries, apples, alfalfa, and more. In a post-globalized world, many countries will lose the ability to pay for these. If China is your primary customer, it’s time to look for a new market. The country that should be most concerned about this is the U.S., particularly California’s Central Valley. This area has extremely high production costs due to strict regulations and its desert-like conditions, which make input costs (water, for example) sky-high. It’s not naturally fertile land.

As long as inputs are cheap and China is willing to pay top dollar because they’re price-insensitive, this business model works. But that’s not going to be the reality much longer. So, check your specialty crops, see where they’re being sold, and figure out if those markets will hold up as globalization breaks down. If not, you’ll need to either switch markets or find a new crop.

Alright, that’s it for me. See you next time!

Will Climate Change Be the Death of Wheat?

Although climate change models are still evolving, historical climate data shows a clear warming trend. So, let’s discuss the impacts of climate change, specifically who will be affected the most and who might even benefit from it.

When you think of climate change, think of it as an amplification of current conditions. So, hot and dry areas will likely become hotter and drier. Hot and humid regions are likely to get even wetter and face severe health risks. Agricultural zones in marginal climates will suffer the most, especially those dependent on wheat.

Speaking of wheat – humanity’s primary calorie source – you might want to enjoy that cinnamon roll and pasta while you have the chance…Okay, maybe that’s a bit dramatic, but you can expect production to decline and prices to soar. This will especially impact places like the American Great Plains, central Argentina, the Russian wheat belt, and northern China.

However, regions with dual wind streams are poised to do pretty well amidst the warming climate. Think of zones like the American South and Midwest, parts of Argentina, Uruguay, northwestern Europe, and New Zealand. Unfortunately for the Chinese, their agricultural regions are particularly vulnerable, which will lead to severe food shortages and famine.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everybody, Peter Zeihan here, coming to you from Blue Lake at the border between Yosemite National Park and the Ansel Adams Wilderness. That’s the Pinnacles behind me, and let me tell you, the hike up here was quite the challenge! Today, we’re tackling a question from the Ask Peter forum: with climate change, where are we going to feel it first? Who’s going to be hit the hardest, and is there anyone who might actually benefit?

First off, let’s remember that our understanding of climate change is still developing. Yes, there are plenty of smart people studying it, but when it comes to understanding how the atmosphere works on a global scale, we’re learning as we go. I find it most reliable to look at the past rather than just the projections. We have over a century of climate data from most locations, tracking temperature, wind, and precipitation. If you look at what’s happened over the last 140 years or so since industrialization began, there’s been a clear uptick in temperatures.

By the time my fourth book, The End of the World Is Just the Beginning, was published, that temperature increase was 1.1°C over the entire period. In the last few years, it’s ticked up to 1.2°C. This doesn’t just mean that the world is getting warmer; it’s getting warmer in different areas at different rates. One key thing to remember about precipitation is that while warmer air can hold more moisture, it also requires more moisture before precipitation occurs. So, hot and dry areas are getting drier, and wet and hot areas are getting wetter.

As long as you have electricity, a degree Celsius isn’t a big deal. Take the United States, for example—back in the 1930s and 40s, Florida and Iowa had similar populations. Now, Florida’s population is about eight times that of Iowa, thanks to air conditioning and reliable electricity. But I’m more concerned about two specific regions.

First, the developing world areas that are already hot and humid, like Brazil, the northern coast of South America, sub-Saharan Africa, Southeast Asia, and the Indian subcontinent. These regions are already very wet, humid, and hot, and adding even a little more heat could be a serious health risk.

The second area of concern is agricultural zones that are already hot and dry. Agriculture tends to be concentrated in regions where specific crops grow best—avocados in California, wine in southern France, and so on. Wheat is the exception because it’s essentially a weed and will grow almost anywhere. As the world has diversified its agricultural production and globalization has spread crops globally, wheat has steadily been pushed to the margins, except in places like northern France, Quebec, and parts of Pakistan and India where it’s tied to cultural or food security.

Wheat is now grown in cold and dry or hot and dry regions like the American Great Plains, central Argentina, the Russian wheat belt, and northern China. This means that when climate change starts reducing moisture in these areas, wheat production will collapse, and prices will skyrocket. And since wheat has been humanity’s number one calorie source for millennia, this is a big deal.

But it’s not all doom and gloom—some places might actually benefit. Regions that receive moisture from two different wind streams, like the Gulf Stream and the monsoons, are less likely to suffer catastrophic crop failures because both wind systems are unlikely to fail in the same year. This is good news for the American South, the American Midwest, northern Argentina, Uruguay, northwestern Europe (especially the UK and France), and New Zealand.

However, most of the world relies on a single wind current, so even minor climate changes could have outsized impacts on agriculture, especially wheat.

Now, on my way down from the hike, it hit me that there’s a country out there with both monsoonal and jetstream moisture, and that’s not necessarily a good thing. In the American Midwest, both hit the same region, but in China, the monsoon affects the southern rice belt, while the west-east jetstream waters the northern wheat zone. This is bad news for China. Everything I said about wheat applies, but it gets worse because rice requires meticulous water management—flooding and draining the fields multiple times. If rain comes at the wrong time, the entire crop can be lost. So, no matter how climate change unfolds in the next few decades, we can be sure that hundreds of millions of Chinese people will be at risk of starvation.

Alright, now I’m really done. See you next time!

How Tariffs and Drones Saved Ukrainian Agriculture

Ukrainian agricultural exports are finally having the boot lifted from their throats thanks to new tariffs on certain goods in the EU and Ukraine’s adoption of water based drones.

Exporting Ukrainian agricultural products has been no easy feat; between Russian bombardment, infrastructure attacks, and European interdictions on Ukrainian goods, there wasn’t much movement early on in the conflict. Between the proposed tariffs by the French and some recent success with water-based drones, Ukraine might finally be able to get some product out.

These new tarrifs will free up the markets for Ukraine’s primary revenue generating products, wheat and sunflower. The recent water-based drone attacks on Russian vessels have helped to reestablish the grain corridor through NATO territories, easing pressure further.

Although this is just a small victory for the Ukrainians, restoring their ability to earn through agricultural exports could help ease tensions across the board.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey, everyone. Peter Zeihan here coming to you from Colorado. quick update on the trade and war situation in Europe, specifically Ukraine. it appears we have or they have solved the problem of getting Ukrainian agricultural goods to market. So the quick backdrop is that because of the Russian war, the Russians were bombing places like Odessa and interdicting ships on the Black Sea.

And by water is how the Ukrainians ship out. Well over 80% of their agricultural output, or at least before the war, it was, but nobody wanted to get hit by a Russian missile. So basically everyone got locked up in port and we had backlogs, throughout the entire system. the Ukrainians started to ship things by rail west into the European Union.

they couldn’t get nearly as much out at most one third of what they could do, based on product and some products, less than 10%. But every kilometer that the, Ukrainian stuff was in a rail car, was a kilometer of ton rails that the Europeans could not use. So the Romanians, the Hungarians, the Slovaks and the poles, the border states in particular, were getting cheesed off because their farmers were having a hard time getting their crops to market.

And so they would say, you could transit, but you can’t actually sell that here. Well, if you have to go all the way to Germany, that’s a lot of ton miles that were suddenly not available for everything else. So it wasn’t a very tenable such solution. So these countries may on the whole be very pro Ukraine, but they don’t want to destroy their own agricultural sectors to do it.

So two things have changed. First, the French, the French have gotten involved. Though the French are arguably among the most agriculturally protectionist countries in the world. and none of this stuff was coming to France, but, the French economy is roughly as large as all of the border states put together. And so when the French did decide to get involved, it had an impact at the European level very quickly.

And they were looking at some of the secondary products that were coming in, things like poultry and eggs and honey and corn and oats, and they’re like, okay, we produce all of these things, and now all these things aren’t necessarily making it to France. They are making it to Central Europe, which is depressing. Prices within the European Union.

So how about we do this? We do it. We give everyone in Europe the ability, put tariffs on the products that we care about. And in doing that, we then open up the ability for everything else, most notably wheat and sunflower, which are, the Ukrainians, big money makers. now everyone in the border states grows wheat, but by freeing up some categories, then things could go elsewhere and things could basically be shuffled around.

The French got happy, and it took some of the pressure off of everything else. That was part one. Part two is a Ukrainian military strategy using drones. they basically been refitting small jet boats and jet skis and going in force after Russian vessels, especially Russian landing vessels. well, in the last few days, they’ve taken out another two or at least heavily damaged another two, as long as as well as a spy ship that allows the Russians to identify where launch sites and radar sites are.

And what this has had the net effect of doing is clearing the entire western half of the Black Sea of Russian vessels, and forcing the Russians to fall all the way back to an over a cease, and maybe even even to offshore on the eastern side of the Black Sea, which ports most of the western half of the Black Sea, out of range of even Russian missiles.

So this is opened up a grain export corridor going down the western side of the Black Sea through NATO territory, specifically Romania and Bulgaria, Turkey, to the Turkish Straits and out to the Aegean and the wider world. You do that, you take pressure off those bulk commodities like sunflower and wheat. So I don’t mean to suggest that this is solved, and I don’t mean to suggest that everyone has gotten everything that they want.

But a lot of the pressures that we were seeing that were locking up the cargo shipments are now gone, or at least severely ameliorated. And all of a sudden, Ukraine again has its single largest line item export earner back. and that will help everyone, because the more that the Ukrainians can put their own money into the war, the less pressure there will be politically on everyone else.

Europe’s Latest S*** Show: Farmers On Strike

If you’ve seen the videos of tractors driving through city centers and spraying manure on government buildings, then you’re well aware of the farmer protests happening throughout Europe…but why are they protesting?

The protests, which started in France, are in response to regulatory changes and reduced funding for agriculture in the EU. The Common Agricultural Program has seen drastic cuts to funding and increased restrictions facing farmers.

Despite Europe being a very strong agricultural zone, countries like the US and Brazil stack on the pressure for these European farmers with their higher yields and lower price points. We’ll continue to monitor and release updates as this situation unfolds.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

A North Dakota Love Story: Agriculture and Railways

For all those with an aversion to woodchippers…today’s video is for you. That’s right, I’m in Fargo, North Dakota and we’re discussing the state’s agricultural prowess despite a lack of water access.

While most Midwest states rely on river systems for shipping, North Dakota has built an extremely robust rail system that facilitates the transportation of their agricultural products. These railways connect to both the Mississippi River and the Pacific Coast, which broadens and diversifies market access.

As impacts to global agricultural markets increase, the importance of North Dakota foodstuffs will only grow. However, the shale revolution has introduced some competition for rail space between the agriculture and energy industries, but that’s a story for another time.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

The Geopolitics of Winter: Snow’s Impact on Agriculture

Some of you out there might grovel when the first snowflakes of the season fall, but I’d be willing to bet that the geopolitical significance of that snow hasn’t crossed your mind. Today, we’ll be exploring winters impact on agriculture and global food security.

If you think of all the great agricultural zones in the world, most of them have a winter season. At face value, that might seem irrelevant, but the snow and moisture that winter brings serves as insulation for the ground and facilitates biological processes critical for agriculture.

Historically, regions with a cold winter season have been more conducive to growing crops capable of feeding large populations, such as soy, wheat, rice, and corn. However, the industrialization and development of fuels and fertilizers has enabled these crops to be grown in areas previously unsuitable for agriculture.

These advances gave way to increases in population and the cultivation of new lands, but is it sustainable? As soon as places like Brazil or China can no longer import the inputs necessary to grow enough crops to feed their populations, we’re in for a rude awakening…

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Hey everybody. Peter Zeihan here coming to you from snowy Colorado, where in the last 18 hours we’ve gotten 18 inches of snow, which means that this morning is a time for clearing and shoveling, but there is more to winter than shoveling and icicles. There is also the fun and games that comes with agriculture. In fact, winter is arguably the single biggest factor for how our world got to be in the shape it is, more or less the century and less century.

The issue is that when winter hits, everything stops and you have a layer of moisture that then insulates the ground. This is two things. Number one, it preserves a little bit moisture in there and then will grow a little bit back in the spring. But more importantly, the thicker the snow, the greater the insulation. And so you actually still have biological processes going on under the surface, even if right there in the topsoil.

Basically, you’ve got organic material that is decaying or as farmers like to call it, the formation of free fertilizer. If you look at the map of the world’s agricultural zones, before roughly 1900, the pre-industrial era, you’ll notice certain patterns. The American Midwest to a degree, the American Piedmont, Northern Europe, Central Eurasia, the real plot to basin in South America and the southeastern part of Australia and South Africa.

sorry, I forgot. Northern China as well. What are these areas all have in common? It’s cold. You get some snow and so you get that recharge system. There are temperate climates where the free fertilizers kind of baked into the cake. If you go outside of those zones, pre 1900, it’s not that there’s not agriculture, but by definition it’s almost not large scale.

And most of the crops that feed most of humanity. So you’re talking rice, soy, wheat and corn. Those four crops grow best in those conditions. You move out of those zones and you’re talking different crops, things like sweet potatoes or yams. And it’s not you can’t support a population with those things. It’s that you can’t support a large population with those things.

So they’re not nearly as amenable to road crop edge. It’s more subsistence farming as a rule. Now, that, of course, changed, right, right around between 1900, 1945 for some countries and then between early 1990 and 1985 for the rest. What happened there was first the development and then the mass application of industrial level agricultural inputs, things like fuels and fertilizers, which allowed you to plant more traditional crops in zones that normally weren’t really great for it.

In addition, those lower output crops per acre. If you started putting things like fertilizer, they would do a lot better. As a rule, the industrialization of agriculture had a bigger impact on marginal lands than it did on the Prime lands. The prime land still saw their output increase by 50% to 150%. But it’s the marginal lands that saw a tripling, quadrupling or even more.

Now, something to keep in mind with all those secondary lands, if you’re talking about, say, a step where it’s just dry with agriculture, doesn’t it? Nothing really happens. If you’re talking about the tropics, yes, you have a riot of growth, but the nutrients are consumed by that growth as soon as the growth rots. So if you clear the jungle and the rainforest, the soil that’s left behind is almost nutrient non-existent.

And without those industrial level inputs, you really can’t grow crops at scale in these zones. Now, because of industrialization, of agriculture, we haven’t simply seen that the part of the world that humans cultivate expand by a factor of three. We seen the population expand by a factor of three as well. My concern is that we’re entering an era where the supply chains that allow those industrial inputs to function to exist are going to break down.

And for countries like China or Brazil who import the vast, vast, vast majority of those inputs, that means the ability to sustain post 1900 levels of population are going to be hugely hit. In the case of Brazil, they still have portions of the country that are still temperate. It’s not like they’re going to starve, but they’re no longer going to be a massive agricultural exporter to places like Brazil.

So for those of you who live in a place where you don’t have snow, yes, you get more time on the beach and you don’t have to shovel. But it also means the security of your food supply is decided by people in different climate zones with supply chains that are a continent away that you have no ability to protect or even influence.

And the world we’re going into, that’s going to be a little rough.

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

The End of the World is Just The Beginning

Disunited NAtions

The Absent Superpower

The accidental superpower

The End of the World is Just The Beginning

Disunited Nations

The Absent Superpower

The Absent Superpower

Transcript

Transcript

Transcript

YOU CAN LEARN MORE ABOUT SCOTT BASE VINEYARD BELOW

Transcript

Transcript

TranscripT

TranscripT

Join 200,000+ other subscribers

Stay Social

GEOPOLITICAL INSIGHT STRAIGHT TO YOUR INBOX