Friday, February 2, 2024

Supply Lines: $10 trillion food overhaul

From farm to fork, food systems ensure that what we eat is grown, processed and delivered across the globe efficiently.But they take an enor

From farm to fork, food systems ensure that what we eat is grown, processed and delivered across the globe efficiently.

But they take an enormous toll on our health, the planet and economies.

About a 10th of global GDP is wiped out each year by hidden costs including undernutrition, productivity losses and environmental damage, new research shows. There's some good news, though: overhauling systems could bring economic benefits of as much as $10 trillion a year.

That can come through changing policies, helping people to eat healthier and investing in innovation — like better tech for smallholder farmers.

Scrapping subsidies that keep the system focused on monocultures and reliant on fertilizers and fossil fuels is a top policy change that's needed, according to Johan Rockstrom, director of the Potsdam Institute for Climate Impact Research.

He's part of the Food System Economics Commission, which includes the Food and Land Use Coalition and non-profit EAT. It has brought together experts to develop an economic model casting two possible pathways for the global food system — one where nothing is done, and the other where change occurs.

The commission "offers an urgent economic rationale and provides political and economic decision makers with the necessary evidence to transform food and land-use systems," said FSEC principal Gunhild Stordalen.

Without Changes...

On their present course, food systems will keep driving a third of global greenhouse gas emissions, contributing to 2.7C of warming by the end of the century compared with pre-industrial periods, according to the FSEC report published this week.

Food production will also become increasingly vulnerable to climate change. By 2050, food insecurity will leave 640 million people underweight in some parts of the world, including 121 million children. Obesity will rise by 70%.

With an Overhaul…

The prospects are much brighter if food systems are transformed. Better policies and practices by 2050 could help eradicate undernutrition and cumulatively save 174 million lives from premature death due to diet-related chronic disease.

Food systems could also become net carbon sinks by 2040, helping to limit global warming to below 1.5C by the end of the century, protecting more land and reversing biodiversity loss.

In short, the cost of such transformation — estimated at a fraction of global GDP each year — is smaller than the potential benefits, the report shows.

"The food system has immense potential as preventative medicine for both people and planet," Stordalen said.

More Food for Thought

Farmer discontent across Europe — as mentioned in last week's Supply Lines — highlights challenges in food supply chains. Demonstrations continued, especially in France, as growers protest what they call unfair competition from abroad, and demand more financial help and less bureaucracy.

Amid the protests, the EU delayed plans that would require farmers to leave more of their land fallow to improve biodiversity.

Agnieszka de Sousa in London

Charted Territory

Cheaper chicken | After years of butcher-counter sticker shock, Americans are likely to see a drop in meat prices thanks to an unlikely ally: the emerging renewable fuel industry. Processing the vast amounts of soybeans needed to make the plant-based jet fuel and diesel required to lower US emissions will also create mountains of co-product soymeal, widely used in animal feed. The less expensive it is for meatpackers to feed their animals, the more meat they'll produce, ultimately trickling down to lower prices at the grocery store. (Read full story here.)

Today's Must Reads

  • The head of one of Canada's largest supermarket chains rejected criticisms from a government minister who said grocery sellers aren't being transparent enough about food inflation and the sector isn't competitive enough. 
  • In the weeks since Israeli troops scaled back operations in northern Gaza hundreds of thousands of Palestinians are emerging from hiding and adjusting to a grim reality: food is scarce.
  • Massachusetts agtech startup Inari said it raised $103 million of new equity at a $1.65 billion valuation. The company is developing corn, soybean, wheat and other seeds that require less water, land and fertilizer.
  • Is this the year of the robot sommelier? Our wine expert lists the six ways that wine will change this year.
  • Butter chicken — a beloved dish in India and beyond — is at the center of a trademark lawsuit before the Delhi High Court over who, exactly, invented the dish.
  • In a country where cattle outnumber people, a New Zealand startup is adapting wearable technology for bovines to help make farming greener.
  • ADM's CEO told employees that the company's intersegment sales, which are under investigation, won't significantly impact the crop trader's earnings. 

On the Bloomberg Terminal

  • A dozen state agriculture commissioners from Iowa to Mississippi have asked Wall Street banks to provide information explaining how their climate policies impact their lending to farmersBloomberg News reports.
  • Hershey convinced a federal judge to dismiss some claims in a proposed class action alleging the company improperly failed to disclose that its dark chocolate bars could contain lead and cadmium, Bloomberg Law reports.
  • Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
  • Use the AHOY function to track global commodities trade flows.
  • For freight dashboards, see {BI RAIL}, {BI TRCK} and {BI SHIP} and {BI 3PLS}
  • Click HERE for automated stories about supply chains.
  • On the Bloomberg Terminal, type NH FWV for FreightWaves content.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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