Equilibrium & Sustainability

Equilibrium/Sustainability — Produce prices soar as California crops crumble 

California’s summer crops are shriveling amid ongoing drought conditions, putting pressure on grocery prices across the U.S.

Without rain or snow in central California and limited water supplies from the Colorado River, tomatoes and onions have wilted, while leafy greens grown in the winter face a dicey future, according to Reuters.

“There’s just not enough water to grow everything that we normally grow,” Don Cameron, president of the California State Board of Food and Agriculture, told the outlet.

Reuters reported that one Fresno County farmer planted just 25 percent of his 2,000 acres and harvested tomatoes two weeks early to minimize drought damage.

“I don’t think farming in California has ever been more complex and more challenging, and the drought is a large part of that,” the farmer said.

While California produces nearly a third of the world’s processing tomatoes, the U.S. Department of Agriculture cut its 2022 forecast down 10 percent from its previous estimates, Reuters reported.  

With fewer tomatoes — and onions and garlic — available, farmers were able to negotiate higher prices, which had led to increases to both produce processes and consumers downstream, according to Reuters.  

“The onions and garlic have already been negotiated for 2023, with another
25 percent increase in price,” Cameron told the outlet. 

Welcome to Equilibrium, a newsletter that tracks the growing global battle over the future of sustainability. We’re Saul Elbein and Sharon Udasin. Send us tips and feedback. Subscribe here.

Today we’ll start by exploring how a decision by some of the world’s largest oil producers to cut production has left Democrats quivering ahead of the midterms. Then we’ll see why global demand for biofuels poses a threat to food supplies.  

OPEC cuts leave Democrats vulnerable 

With the midterm elections rapidly approaching, a move by the Organization of Petroleum Exporting Countries (OPEC) to slash oil production has become a troublesome thorn in President Biden’s side.  

What happened with OPEC? Last week, the OPEC+ coalition of 13 member nations and 11 non-members — including Russia — declared it would reduce oil production by 2 million barrels.

This decision raised concerns that U.S. gasoline prices could soar, creating challenges for Democrats just a month ahead of the midterm elections, our colleague Rachel Frazin reported.  

Spotlight on an awkward visit: The OPEC decision, shepherded by Saudi Arabia, has set off a fresh tirade of criticism about Biden’s visit to the Kingdom this July, The Washington Post reported. 

  • That visit had been touted as a chance to improve the U.S.-Saudi relationship, with hopes of convincing the kingdom to increase oil production.  
  • But Biden stressed last week that the cartel’s decision didn’t undermined the purpose of his July visit, which he described as “not essentially for oil.” 

Going too far: “I think America really shamed itself by doing that,” Hossein Askari, of George Washington University, told CNN, referring to Biden’s July appeal to Saudi Arabia Crown Prince Mohammed bin Salman, known by his initials MBS.

“Of course, MBS did not respond positively,” Askari continued. “But now he, in fact, has gone over the top. He has agreed within OPEC — and of course he’s the main spokesman in OPEC with Russia — that they will cut back.”

Bad news for Democrats: While fuel prices are part of a global marketplace and are mostly outside the president’s control, Republicans will likely use the situation to appeal to voters who are fed up with high costs, Frazin reported for The Hill. 

  • Analysts said there’s little the administration can do to solve the problem between now and early November.   
  • Andrew Lipow, president of Lipow Oil Associates, said he expected prices would be “too high for the administration’s liking.” 

What can the US do? Askari suggested that the U.S. be “much tougher with Saudi Arabia,” stressing that America has “bent over backward to accommodate them in every way,” according to CNN. 

“Some people think that OPEC decisions are purely economic,” Askari told CNN. “Some people think purely political. It has always been both, especially for Saudi Arabia.” 

Oil cuts for weapon cuts: Two Democratic lawmakers have proposed halting arms sales to Saudi Arabia in response to oil production cuts from OPEC.

  • Rep. Ro Khanna (D-Calif.) and Sen. Richard Blumenthal (D-Conn.) called on Congress to slash sales to Saudi Arabia until it reverses its “embrace” of Russian President Vladimir Putin, in an op-ed on Sunday for Politico. 
  • In order to “fortify U.S. national security,” the lawmakers stressed the need “to pause all U.S. military supplies, sales and other weapons aid to Saudi Arabia.” 

Financial implications: Also on Sunday, Treasury Secretary Janet Yellen warned that the OPEC decision could hurt the global economy and that developing countries could especially struggle.

  • “I think OPEC’s decision is unhelpful and unwise — it’s uncertain what impact it will end up having, but certainly, it’s something that, to me, did not seem appropriate, under the circumstances we face,” Yellen told the Financial Times.
  • “We’re very worried about developing countries and the problems they face,” she added. 

Biofuel demand ups food prices, political risk

Rising demand for plant-based fuels are driving up food prices around the world, leading to political risks for nations from Indonesia to the United States. 

  • A combination of corporate interest in renewable fuels and Western government subsidy programs is pulling in food crops. 
  • These crops — from sugar to soybeans — are being used to make products ranging from ethanol to sustainable aviation fuel.

Global price increases aren’t yet critical, but in regions like southeast Asia, rising prices at markets and restaurants are starting to become a political problem, according to commodities strategist Walter Kunisch. 

  • “Food prices throughout Southeast Asia both at home and at restaurants have gone up sharply,” Kunisch, of consultancy Hilltop Securities, told Equilibrium. 
  • “That food fuel issue really has the ability to impact greater slices of the global population,” he said. 

Interest in renewables: Both the EU and the U.S. are positioning plant-based fuels as major components of their renewable energy programs — and the market is responding by building new plants and buying up new feedstocks.

California is a dramatic case: The Golden State’s Low Carbon Fuel Standard has helped drive a wave of investment to convert fossil fuel refineries into biofuel refineries, Kunisch told Equilibrium.

But the new and continued federal subsidies — in addition to a growing corporate embrace of ethanol as a climate solution — helps to shift the calculus back in favor biofuels. 

ETHANOL DEPENDENCE MEANS LONG-TERM RISKS

Whether ethanol is truly beneficial to the climate remains a subject of ongoing dispute. Meanwhile, the fuel contains only about two-thirds as much energy per gallon as gasoline, according to the U.S. Department of Energy. 

Home-front benefits: What ethanol production does do very effectively, however, is keep the U.S. corn sector afloat, Kunisch said.

  • The U.S. Department of Agriculture estimates that ethanol production will gobble up more than a third of the country’s corn production in 2022 and 2023, Ethanol Producer Magazine reported. 
  • Ethanol production has been increasing steadily for decades, according to the Energy Information Administration. 

Long-term liability: That dependence on ethanol puts farmers in a serious long-term bind — because internal combustion engine cars are going away, Kunisch said. 

  • The U.S. government is aiming to have half of new cars be electric by 2030, based on targets put forward by the Biden administration.
  • States like California and New York have passed laws banning sales of new gas-powered cars in their states by 2035, as we previously reported. 

An unseen risk: This threatens to drop the bottom out of the ethanol market within the next decade or so — something farm country isn’t prepared for, Kunisch said. 

“That’s going to be a real shock to us,” he added. “And honestly, I don’t think anybody’s talking about that right now.”

Start now to avoid next COVID-19: scientists 

Meeting the growing risk of emerging infectious diseases like COVID-19 requires a more comprehensive and hands-on view of public health, according to a global team of public health researchers.  

Staying vigilant: COVID-19 is unlikely to be the world’s last serious pandemic — particularly if we do not prepare, the researchers argue in a new essay in the Proceedings of the National Academy of Sciences. 

  • Zoonotic diseases like SARS-CoV-2 are diseases present in wild animals that make their way to humans, often with a stopover in domestic animals. 
  • Human population growth and expansion of settlements and livestock into wildlands — which harbor wild viruses like SARS-CoV-2 — are making these risks worse. 

Avoiding the next pandemic: The researchers identified three urgent targets to help head off or at least mitigate the next pandemic:

  1. Guard the gates: The scientists urged “smart surveillance” of domestic populations that live near wild ones, which can be critical “interfaces” between humans and wild diseases.
  2. Conduct proactive research: Research into coronavirus vaccines was notoriously underfunded before the COVID-19 pandemic. To avoid a repeat of this situation, the researchers urged public health officials to monitor emerging disease threats and develop vaccines and treatments early.
  3. Reduce risks: Finally, the researchers pressed public health officials to identify the drivers that cause spillover disease — like human conversion of forests to farmland or the transport of live wildlife from forests into cities. Taking steps to reduce these drivers before the next big one is difficult — but will ultimately save money and lives, they argued.

Modification Monday: Animal edition 

Climate change pushes primates to forest floors, unlikely animals come together and frogs find thrive in new habitats.  

Human-caused climate change pushes primates from trees 

  • Climate change and deforestation is pushing tree-dwelling primates to the ground, according to a new study in the Proceedings of the National Academy of Sciences (PNAS). While some species may thrive in their new terrestrial lifestyles, less versatile animals will require urgent conservation strategies to ensure their survival, an expert from the San Diego Zoo Wildlife Alliance said in a statement. 

The mysterious world of animal hybrids 

  • While some animal hybrids — like mules — are well-known, interbreeding occurs in species from corals to cats to birds and butterflies, according to a National Geographic explainer. Analyzing their genetics could help unravel evolutionary mysteries: “When you have two species whose genomes have undergone independent evolution for hundreds of thousands of years, and then you bring them back together,” one expert told National Geographic, “you get to understand what works and what doesn’t.” 

A housing plan to stop frog decline 

  • Amphibian population declines can be reversed by engineering new habitats, a second study in PNAS has found. Researchers built artificial habitats for amphibians — and found that over two decades, their new pools teemed with life even as populations around the world declined.

Please visit The Hill’s Sustainability section online for the web version of this newsletter and more stories. We’ll see you tomorrow.

Tags Biden biofuels Climate change COVID-19 drought Ethanol Food prices food production gas prices OPEC+ Pandemic
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