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.

Transcript

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:

  1. Arable Land: You’ve got to have a lot of productive land.

  2. 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.

  3. 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!

Talks of the Trade: A Continued Conversation on Globalization with James Fraser & J.P. Morgan

Our June MedShare Donation Match of $50,000

I’m pleased to announce our donation matching drive for the month of June. We will be matching up to $50,000 in donations this month to our chosen charity partner, MedShare International.

Please click the link below to donate, and all of us at Zeihan on Geopolitics, thank you for your generosity.

A few months ago I sat down with J.P. Morgan Payments’ Global Head of Trade and Working Capital, James Fraser, for episode 2 of “Talks of the Trade.” They’ve recently released an extended cut of that episode that I’d like to share with you.

In this new episode, we discussed a host of topics including generative AI, globalization, national security, technology and international tensions.

Click the link below to watch other episodes or to learn more about Trade and Working Capital at J.P. Morgan Payments…

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.

Austin’s Role in the Texas Triangle

I may have ditched the “howdys” and “y’alls” for the high mountains of Colorado, but Austin remains part of one of the fastest-growing economic and urban zones in the western hemisphere. However, Austin can’t credit all of its success to the “Keep Austin Weird” bumper stickers…

The key here is in the neighborhood. It’s a blue city in a red state, so they get low taxes and a high level of city services. More importantly, Austin falls right in the middle of the Texas Triangle – a zone comprised of San Antonio, Houston, and Dallas.

Houston is an energy hub and heavy into manufacturing. Dallas is an auto and aerospace hub. Both of those are financial centers in their own way. San Antonio offers a low cost of living and low labor costs. Austin happens to be the missing piece in the Texas Triangle, high-end tech. Austin can operationalize the research the other cities need and disseminate the plans from there.

It doesn’t look like Austin’s growth will be slowing down anytime soon. As the world faces deglobalization, Texas (the triangle specifically) will play a critical role for the US.

Prefer to read the transcript of the video? Click here

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.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY


TRANSCIPT

Hey everybody. Peter Zeihan here coming to you from the Lamar Passenger Bridge in downtown Austin. As some of you remember, this was my home for 20 odd years. And I am proud to say that the city is still doing strong.

Austin is at the middle of what is called the Texas Triangle, which has been the fastest growing economics and urban zone in the Western Hemisphere for about 25 years now. And the story is in the neighborhood. So Texas is a red state. So the taxes are low. In fact, in the state of Texas, there is no income tax at all. But this is a relatively blue city, so it has a reasonably high level of city services. That sort of combination has really helped urban areas in a similar match, places like Lexington, Kentucky or Atlanta, Georgia.

But there’s more than that. The Texas Triangle, as you might expect, has three major urban zones of which Austin is not technically one. The big three are San Antonio, Houston and Dallas. Houston is obviously an energy and heavy manufacturing hub. Dallas is an automotive and aerospace hub. Both of them are financial centers in their own way. And then San Antonio has lower cost of living and lower labor costs, and so is great at mass manufacturing, especially in automotive.

Where Austin plugs in is on the higher end. There’s an area to the northwest of town called Silicon Hills, which, as you might guess, is kind of an echo of Silicon Valley, but where Silicon Valley focuses on the base research and being a hotbed of core tech innovation. Austin takes a lot of that research and then turns it into operationalized development plans, which are then applied throughout the rest of the Texas Triangle. So it’s not that Austin could do this by itself, but Austin, plugged into the triangle, makes it the perfect interlocutor for everything, for turning modern manufacturing into reality. And if you see kind of behind me, you know, there’s quite a skyline here. This is a city that as recently as 1985 only had about 600,000 people, and now they’re over two and a half million in the entire metro. And all of the buildings in the immediate background were not there when I moved to Austin back in 2000. And the ones a little bit further back now, maybe two thirds of those are new in the last 20 years. So Austin has been one of the top ten fastest growing urban centers in the Western Hemisphere now for almost 30 years straight. And even though it is the most expensive city in Texas, and even though the cost of living has now risen above the national average, it has a long way to grow because it can physically grow to the northwest, the north, the northeast, the east, the southeast, the south and the southwest very easily. And the land just to the west where I used to live is called the Hill Country and as you might guess, it’s hilly but not mountainous. This is an advantage that a lot of the Texas cities have. They can just physically expand with reasonably few restrictions.

Talk to you guys later. Bye.

The Jordan Harbinger Show

I recently had the opportunity to sit down with Jordan Harbinger on “The Jordan Harbinger Show” (for the loyal followers, you’ll know this is my second appearance).

We discussed how the globalized world came to be, the factors contributing to its instability, and how the process of deglobalization is well underway. The chaos the world is about to face is nearly impossible to consolidate into an hour long podcast, but this is a good start!

Links to the podcasts, YouTube videos, and more can all be found below.

Geopolitical Strategist on China’s Upcoming Collapse JHS Ep. 781

Confronting a Geopolitical Strategist on Putin’s Big Plan Peter Zeihan Ep. 640

*This video is from my first appearance on The Jordan Harbinger Show

Did you miss out on the Global Outlook Webinar
Click the link below to purchase it:


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.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

Will Automation Save the World?

A world caught in deep demographic decline, faced with the loss of consumption and the complications that come with all that…can automation help pull us out of this nose dive?

Here’s the quick and dirty on how we got here….back in the industrial era, birth rates started to decline, then got even worse when globalization came around, and then went to the sh***er once the countries that were a bit behind joined the industrial world.

Now onto how automation fits in. Spoiler alert: automation is not the holy grail it’s been made out to be. Sure, it can be part of the solution in systems that aren’t on their last leg, but we must remember that these are still machines. They take time to build, require lots of upfront capital, and don’t get me started on the consumption piece of this puzzle.

Automation isn’t going to magically reverse the effects of demographic collapse, but for countries with the time and money, it’s not a bad place to start.


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.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

Deglobalization: There’s No Stopping It Now

The globalized world has seemingly been great for everyone…security, access to foreign markets, the list goes on…so why would the US choose to continue down the path of deglobalization?

The US has been heading down this path for years, and they’re well past the point of no return. There are a few reasons we ended up here: the US never benefitted from this arrangement like everyone else, American politics are all about casting a wide net and making the most people happy (so when the globalization topic is hurting your party, you give it the cold shoulder), and most importantly, demographics.

Perhaps the only thing that could flip the script and make the US rethink this would be a security threat that impacts Americans more than anyone else.

Prefer to read the transcript of the video? Click here

Join me on Feb. 17th for the webinar – Global Outlook: One Year into the Ukraine War.

We’ll dive into the global impacts the war has had on supply chains, agriculture, and much more. After my presentation we’ll have a Q&A portion to answer all those burning questions.


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.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY


TRANSCIPT

Hey everyone. Peter Zeihan here, coming to you from Colorado today. I wanted to answer a couple of questions that folks had, namely why I’m so confident that globalization is past the point of return. The idea is that if the United States has benefited from globalization for so long, why, even if it was in danger, wouldn’t the U.S. just kind of double down?

Three things. First, you’ve got to look at why the United States did this in the first place. Globalization was never about the economics for the United States, or at least not about the economics in a traditional sense. The United States had the world’s largest economy long before World War Two, and with the war we found all of our potential rivals, cooperation nations, friends, allies, enemies everybody put together have an economy that was about the same size of the United States. And economic growth was hard to come by. Economic security was impossible. And a big part of what led to that was competition over resources, over lands, over security. Basically, all of the things that have colored human history since the beginning.

So the Americans came to the conclusion that when they were facing down Stalin in the middle of Europe, that there was no way that Americans would be able to economically, politically support the kind of conflict where the Soviets were right there and we were an ocean away, especially when we would be fighting on the territory of countries that have been absolutely devastated.

So the solution was to bribe everybody to use our Navy to patrol the global oceans so that any one of our allies could go anywhere at any time and interact with any other player, access any material, and especially access the American market, which was really the only one of soft to survive the war. The catch was you had to let the Americans write your security policies.

And so never forget that from the very beginning, the very concept of globalization for the United States was never about security. I’m sorry. It was never about economics or trade. It was about security. We pay you to be on our side. And that worked. And after 40, 45 years, the Cold War ended because the Soviet system could not compete, because the Americans not only held the security upper hand, but it created this alliance of economies that were massively larger. Because by the time we get to the 1980s, Korea, which had been the world’s fifth poorest country in per capita terms, actually surpassed that of the Soviet Union. So there was just no long term competition to be had. Now, that was 30, 35 years ago. And since then, the world has changed. We’ve entered into a hyper globalization era where any number of other players have come into the global system and participated under the rules the U.S. set up.

And this means it’s not just the West and it’s not just the Asian protectorates, but it’s Southeast Asia, it’s Brazil, it’s India, it’s Russia itself, and, of course, China. We’re no longer in a world where the U.S. economy is as large as everybody else put together.

Based on how you do the math, the rest of the world combined is three or four times the size of the United States. So doing indirect economic subsidization, as the U.S. had for 45 years, became less and less tenable over the next 30. And we’re now in an environment where some of these countries, China, for the most part, are so overextended and so dependent on globalization that the only way they can survive is as the United States increases support, not decreases. Their demographics mean they have no market. Their lack of military reach means they can’t get energy, and their dependance on the Russians means that the country that is most likely to use economics, especially raw material supply, in order to achieve geopolitical concessions, is now their single largest partner. Newsflash that’s not going to end well. Okay, so that’s kind of piece one. The idea of globalization is no longer benefiting the United States because we’ve never viewed it the same way as everyone else.

But there’s a couple other reasons to think of. First, American politics. During the Cold War, we had a pretty strong bipartisan foreign policy. Remember that American foreign policy is a reflection of its domestic policy. And every generation or two Americans go through and kind of fabricate what their parties mean. This is part of a side effect of having a first past the post single member district system, which is a fancy way of saying that you vote for a candidate who’s going to represent a specific geographic area and they have to get more votes than whoever comes in second. So the parties have a vested interest in throwing as wide of a net as possible so they can get that extra marginal vote. Well, every few decades, politics shifts because demographics change and economics change and security changes. And if you think about what we’ve been through in the last 35 years, the Cold War has ended. Hyper globalization has risen. Hyper globalization has fallen. The baby boomers were in their prime. The baby boomers are now retiring. We’ve had the information revolution. We’ve got social media. Of course, we’re going to handle our politics different. And when you do that, the factions that make up the parties move around. Remember, big net, big, big tent parties. That means they’ve got lots of factions that are always struggling for dominance and influence.

When politics shifts, those factional alliances don’t make sense anymore. And so they have to evolve. And the politics don’t just rise and fall within the big tent party. They fall out. They shift sides. And if you look at what has happened so far, none of it supports globalization. So, for example, unions have largely fallen out of the Democratic coalition. The Trump coalition was fairly successful at drawing them out. They are very anti-free trade. The Trump administration also kicked the business community and the national security conservatives out of the Republican coalition. Those were the two factions for economic and security reasons that were most in favor of globalization. And so now we’ve got the Biden administration and the Trump led Republican coalition that is basically having a tug of war for the unions.

So it’s just like we can’t have a conversation about immigration in the United States because the unions don’t want to have it. No one in Washington wants to talk about globalization in a positive light because the unions are at stake in terms of which political alignment they’re going to take. And the two groups that used to like globalization, national security and business conservatives, they’re not even part of the room anymore.

But probably the biggest reason is the third one, and that’s demographics. When you urbanize and industrialize and for most of the world, they didn’t start that in earnest until 1945 or in the case of the developing world, until 1992. You move off the farm, you move into the town, and instead of working on a subsistence agricultural system, you now are getting a services, a manufacturing or an industrial job. And that means you are living in condos or single family homes or townhomes that are crammed together and in that sort of environment, kids going from being free labor to just being expensive headaches and you have fewer of them. Well, for the rich world, these transition has started 75 years ago. For the developing world, they started 40 years ago. You play that forward and the world is literally running out of people age 20 and under and has for 20 years now, which means now most of the world has run into people 40 and under. Well, the whole idea of trade, the whole idea of globalization is someone has to buy this stuff. Trade makes no sense if there’s nobody on the other end of the sale.

And we are now entering a world where the people who traditionally have done most of the consuming people, 45 and under the folks who are having kids and buying homes and cars, they just don’t exist in the necessary numbers to sustain the system. You’ve undoubtedly heard from me about how the Chinese and the Russians are the two fastest aging societies in human history. But the Germans aren’t far behind. And the Koreans behind that and the Indonesians, the Indians and the Brazilians are actually aging faster than what most of the developing world has done for the last 70 years. And you only have to fast forward to about 2040, 2045 before the average American is younger than the average Brazilian. And ten years after that, younger than the average Indian, Indonesian or Mexican.

So we no longer have the security parameters to make this work because the Americans aren’t interested. We no longer have the economic basis to make this work because we don’t have enough young people to consume? And the Americans are taking a political moment for themselves that’s going to last a few more years in order to digest whatever is going to happen with the unions and that is more than enough time to kill any remnants of the globalized system.

What would need to happen if the United States really wanted to get back in this game is some sort of security scare that scares us more than the rest of the world, where we feel we need to pay for a new alliance. The Ukraine war is not that. If you look at what the Biden administration has done, all the deals that are on the table or on security, there’s not a single guns for butter trade. In fact, every single trade war, every single tariff that the Trump administration put into place, the Biden administration has doubled and tripled down on, except for one. There has been a deal over aerospace with the Europeans, but that’s it. If anything, the Biden administration is far more anti-globalization than the Trump administration was, or at a minimum, it’s actually putting in the long term policy.

So even if the next president happens to be a strong globalist, they’re going to have to unwind eight years of anti-globalization sentiment that is now hardwired into American policy and another eight years under Obama of just complete strategic apathy. You’re not going to do that in four years. So we are talking, best case scenario if you want to be involved in a globalized system another six years before the Americans might belly up back to the table. By then, China will be gone. Until next time.