This Will Kill More Than Bombs or Bullets for Years to Come

Written By Adam English

Posted March 22, 2022

Ukraine bears the scars of Russian occupation. But the worst wasn’t from war.

By some estimates, 3.9 million died in Ukraine, or about 13% of the population, across just two “peacetime” years.

Ukraine faced a multiyear famine under Stalin known as the Holodomor — a portmanteau of the Ukrainian words for “starvation” and “to inflict death” — which peaked in 1932 and 1933.

No sieges, no artillery or rockets fired. A relative handful of bullets were turned on civilians.

We should remember what happened and fear what is to come. There is a very good chance it will happen again, and it won’t be limited to Ukraine.

Profound implications for some of the most food-insecure regions of the globe loom, and by the time they manifest it will be far too late.

Packaged as a way to destroy privately-owned farmland, but ultimately used to punish any and all with any nationalist leanings, Stalin’s land and agriculture reforms in Ukraine forced collectives upon farmers that were barely scraping by on small plots of land.

The idea, if it was far better implemented over a much larger time span, may have worked. But in reality, the disruption, persecution, deportations, even executions — coupled with absurdly poor state-level planning — meant that the 1932 harvest of wheat, corn, and barley would miss targets by about 60%.

And so what little was produced was confiscated as punishment, and a generation of what were essentially peasants starved.

Homes were raided to try to find caches of any grains. Trains were packed and sent off to the Gulags.

This was a man-made atrocity — buried by history and the even more widespread disruptions of World War IIwithin a matter of years.

Yet this lesson must be remembered. Though it isn’t quite as punitive and planned, it is poised to repeat.

Ukraine has since become one of the bread baskets of the world. Partly for all of Europe, and extensively for the Middle East and Central Europe.

Russia, Belarus, and Canada are among the world’s top fertilizer producers. Russia alone accounts for 13% of worldwide fertilizer exports and faces crippling sanction threats.

Belarus exports 10–12 million tons of potash alone, about a million tons less than Russia. It is facing sanctions as well and the major exporter has already cited “force majeure” contract clauses to break contractual agreements.

That leaves Canada as the last major exporter for a handful of critical minerals. Unfortunately, it too is facing issues.

About 75% of Canadian fertilizer is moved by rail, and the no. 2 freight carrier in the country, Canadian Pacific Railway Ltd., is now facing labor strikes.

As President and CEO of Fertilizer Canada Karen Proud recently told Reuters, “The main issue is the short window to get farmers the fertilizer they need for their crops. We are 4–6 weeks away from seeding in Canada and even sooner in the U.S.” 

The implications are dire.

It isn’t just Ukrainian warfare and crop disruption. It isn’t just Russian and Belarusian sanctions on exports of grains and fertilizer.

The U.S. imports 86% of its potash from Canada, much by rail. And a huge chunk of that needs to be tilled into the soil now or in the coming weeks.

Costs have already soared for fertilizers we desperately need to maximize yields. A cruel year looms for price inflation, or outright scarcity.

As David Beasley of the World Food Program — the United Nations agency that feeds 125 million people a day — told The New York Times, “Ukraine has only compounded a catastrophe on top of a catastrophe. There is no precedent even close to this since World War II.”

We’ll be taking food from the hungry to give to the starving.

Chronic hunger rose by about 18% during the pandemic, or up to 811 million people. The United Nations estimates the war’s impact on the global food market could lead another 13.1 million people to go hungry as well.

Armenia, Mongolia, Kazakhstan, and Eritrea import virtually all their wheat from Ukraine or Russia. Turkey, Egypt, Bangladesh, and Iran all import about 60% of their wheat from the two embattled nations. Or at least they used to. These people cannot afford greater costs.

Meanwhile, the rest of us will continue to be squeezed by out-of-control inflation.

This sets up a situation that will make the atrocities of indiscriminate destruction in Ukraine pale in comparison. But it will be a slow disaster, spread across the globe.

The only realistic solution is to maximize yields elsewhere. Fertilizers will command a premium.

The implications for an unprecedented worldwide rearming to secure crucial supplies, let alone the outcome of the Ukrainian war, are far more important than the day-to-day body count today.

Take care,

adam english sig

Adam English
Editor, Outsider Club

P.S. — While fertilizer is profoundly important, this will be a reminder that security may depend on increased spending on defense, but the implications go far beyond. Expect that realization to become more apparent to politicians in the months to come, and for it to be one of many major reasons that defense spending — and stocks — will see a surge for months and years to come.