Chris Forte’s “Thoughts to Start the Day” – Food Crisis

Posted on June 14, 2022 by Scott Shuda

Put down your donut or Egg McMuffin and pay attention. Here at Breakout Investors we are gravely concerned about the pending food crisis facing the world, a crisis that could become . . . catastrophe.

Scott Shuda in particular fears that there’s a nonchalance about the coming crisis. “This is one of those things in front of us, we see it coming, and we freeze. It feels a lot like Covid — there we saw it, we thought it likely to be HUGE — and, as investors, most of us did nothing.”

Says The Economist, “By invading Ukraine, Vladimir Putin will destroy the lives of people far from the battlefield—and on a scale even he may regret. The war is battering a global food system weakened by Covid-19, climate change and an energy shock.

“The high cost of staple foods has already raised the number of people who cannot be sure of getting enough to eat by 440m, to 1.6bn. Nearly 250m are on the brink of famine. If, as is likely, the war drags on and supplies from Russia and Ukraine are limited, hundreds of millions more people could fall into poverty.”
I urge you to take this crisis seriously. Millions of lives are at stake. We have it pretty easy here with bountiful amounts of fertile agricultural land with a wide variety of yields. But many parts of the world will be devastated by rising prices and low supply. The shelves here. . . well who knows.

There are several barometers. The WEAT ETF obviously tracks wheat. Also there is a new ETF – The Teucrium Agricultural Strategy ETF (TILL) gives investors an easy way to gain long exposure to corn, wheat, soybeans, and sugar futures.

The story is simple – we need food to survive. But the supply has become complex. Did you know one third of food production costs is energy-related? Fertilizer is very energy-intensive and skyrocketing. Countries are banning exports. We better pay attention.
For starters Scott has recently discussed rice.
Florian Buschek has introduced us to fertilizer company Verde Agritech (AMHPF). It’s a topic on BI we won’t ignore.
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Ashleigh Day posts ‘WELL Health Provides Business Update Reflecting Record Revenues in May; Setting the Stage for Strong Q2.’ WELL experienced record revenues in May 2022 driven by a 40% YoY increase in total omni-channel patient visits for the month, and reaffirms $525M+ in revenue for 2022, as well as approaching $100 million in Adjusted EBITDA. Search for WHTCF on the Feed.

QUICKIES
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Michael Kramer of Mott Capital Management says, “At this point, valuations in the Nasdaq are still too high, given where yields are. Spreads need to widen more to account for the risks that are now presented in the market due to the uncertain path of the inflation rate and Fed monetary policy.”

*On-Demand destruction: The reviews are in for Jurassic Park: Dominion and they are… stinky. Save your money and see Top Gun for a second time.

*This summer just gets worse as recession worries put clouds over the Travel and Leisure sector. Airlines, lodging, casinos, and cruise lines all sank. Online travel sites also hit the brakes. A once very promising summer of travel may sputter.

*Alcoa extends four-day plunge to 25% as aluminum sinks to new six-month low, with investor sentiment weighed by fears of further lockdowns in China, 40-year high inflation, rising interest rates and a strong dollar. – Seeking Alpha

*You’ll never take me alive copper: Falling 2% due to recession fears, copper is now down 4% on the year after gaining 25% over the previous two years.

*Wait, it gets worse if you’re invested in oil. XLE plunged 5% despite Libya announcing production was down 90%.

“Money is the best deodorant.” – ELIZABETH TAYLOR

Good luck to all – Chris

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