Energy Crisis and Food

The world is facing a reckoning when it comes to energy supply. Despite decades of calls to reduce reliance on fossil fuels, countries have persisted in the widespread use of coal, oil, and gas to power their economies. Not only has burning fossil fuels been responsible for the increased carbon emissions that drive global warming, but we have also created a globalized world in which food and energy systems are highly concentrated - making them extremely vulnerable to disruption.

The war in Ukraine highlights how the lack of diversity in our global energy and food systems is affecting the resilience of livelihoods. As energy, fertilizer, and food prices skyrocket, people around the world are unable to meet the rising costs. As a result, rising energy prices are contributing to food insecurity and humanitarian needs on an unprecedented scale. Our collective failure to promote diversified energy systems has forced millions of people around the world to rely on humanitarian assistance to meet their basic survival needs.

Russia's invasion of Ukraine has further increased pressure on food supply chains. The two countries are major food exporters (accounting for nearly 30% of global wheat exports) and play a key role in global fertilizer supplies. The Russian blockade of Black Sea ports has disrupted exports of food and other commodities from Ukraine, while continued military aggression threatens this year's harvest. The war is also driving up energy prices, which is also impacting food supply chains through rising energy bills and increasing fertilizer prices.

In agriculture and the food industry, energy is used for various purposes. Direct energy consumption includes electricity consumption for automatic irrigation, fuel consumption for agricultural machinery, and energy demand in various stages of food processing, packaging, transportation, and distribution. The use of pesticides and mineral fertilizers results in large amounts of indirect energy consumption, as the production of these inputs is very energy intensive. While the proportion varies widely across regions, depending on factors such as weather conditions and crop type, direct and non-direct energy costs can account for 40-50% of the total variable costs of growing crops in advanced economies such as the United States.

The cost of living has soared in recent months, and food and beverage prices are no exception; advice on saving money on groceries in the world's most developed economies is now commonplace.

Retail food prices increased 8.9 percent in the first seven months of 2022, higher than in the same period in 2021 (1.9 percent) and 2020 (3.1 percent). The 20-year historical average for the same months from 2001 to 2020 was 1.7 percent. All 13 food categories shown in the chart have experienced faster price increases so far in 2022 than in the same period in 2021 and than in the historical average of price increases through July. All food categories experienced price increases of at least 4 percent in the first seven months of 2022.

More charts: https://www.statista.com/topics/9262/food-inflation