A partner with Polar Pork fears the conflict that has affected the movement of goods through the Straight of Hormuz will result in reduced fertilizer availability leading to reduced grain production and shortages of food. As the result of trade friction and global conflict Canadian farmers are facing increased uncertainty.
Florian Possberg, a partner with Polar Pork, says the pork sector has enjoyed relatively low feed costs but there is some real concern over grain prices.
Quote-Florian Possberg-Polar Pork:
The disputes in the Middle East and around the Gulf of Hormuz, an incredible amount of fertilizer passes through that area plus the middle East is also a major producer of nitrogen fertilizer for the world. The last time we really had a spike in feed costs was the Ukraine-Russia dispute which caused a significant increase in the price of feed grains.
The concern really is that fertilizer is what allows us to have significant food surpluses globally. If there is an interruption in the use of fertilizer, it's not inconceivable we could see a significant drop in crop and grain and all kinds of things that depend on fertilizer production would be affected.
Even a three or four percent reduction in grain production could dramatically see the price of grain and thereby food increase.
Possberg says if this disruption continues, we could see a significant shortage of grain production and thereby explosive food costs.He says when everything is normal farmers can produce enough food for everyone but if there's a disruption in fertiliser use and crop production, it could have very serious consequences.
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