What's going on behind the scenes with food prices...

With rising food prices, it's human nature and not to mention political bent to place blame. Who or what needs to be identified as the true culprit. All too often, the blame lands on the wrong culprit. 

Many seem to believe that domestic manufacturers and producers are responsible for rising food prices. While politically convenient, this blame game arrantly targets the wrong party while getting the economics of global supply chains, well, backwards. 

One of the key inputs to the American food supply is fertilizer. Its price, like that of other key inputs, is rising. This isn't coming from corporate greed or mismanagement. It's resulting from a combination of global supply chain disruptions, geopolitical instability, and misguided government policies both here and abroad. 

A perfect example of one of the most important, even critical components of the global food supply chain is fertilizer. Increased crop yields depend on it. When crop yields fall, food production declines and grocery bills rise. The production of fertilizer depends on the availability of of a complex combination of materials such as sulfur, ammonia, and phosphate rock. These raw materials are sourced from a variety of global sources and rely on international transportation networks. The supply chains involving these raw materials are currently under significant stress. 

The current war between Russia and Ukraine continues to disrupt key commodity markets and trade routes. Russia produced 7.5 million metric tons of sulfur last year making it the third largest producer in the world. Russia is an oil-rich country and sulfur is a by-product of oil refining. Lately, Ukrainian drone strikes on Russia's oil and fertilizer infrastructure have dramatically cut Russia's ability to supply sulfur. Russia's ammonia exports have also fallen to approximately 80% of pre-war levels. 

Tensions in the Middle East have only added to the uncertainty around energy production and shipping routes. With the closure of the Strait of Hormuz, roughly 16 million tons of fertilizer remain in limbo while geopolitical events remain unresolved. To compound the situation, about half the world's supply of sulfur passes through the strait.

When supplies of critical raw materials shrink and the cost of accessing them rises, prices for consumers will naturally rise. This is completely unrelated to the 'end' market. The market is simply responding to a failure in the supply chain. 

Lowering prices will not come from penalizing producers. The solution will come from relieving the pressure created by global uncertainty. This begins with eliminating policies that unnecessarily raise costs for domestic producers and manufacturers. Permitting delays, burdensome regulations, including those restricting energy development and production all make it more difficult to produce fertilizer in the U.S.. America has abundant resources and tremendous production capability. Government legislators should be doing everything possible to make sure American companies  can source the raw materials they need domestically. 

At the same time, lawmakers need to be acutely aware of misguided trade practices. Raw materials need to be sourced from trusted trade partners, both foreign and domestic. Many foreign producers are facing the same pressures. Countries like China are exacerbating the situation with unfair trade practices of their own. China is the world's largest exporter of fertilizer. However, China has restricted the export of fertilizer and its raw inputs, including sulfuric acid. 

American officials  must pursue policies that promote a level playing field and supply chains that are not subject to global unrest. This leads not only to lower prices but ensures security of domestic food supplies.  If these issues persist through next year's planting season, Americans will be subjected to further price increases than they have this year, as many farmers had already purchased their fertilizer before the current disruptions. 

The laws of economics have not changed, nor shall they. If Washington is serious about protecting food supplies and lowering costs, it needs to distance itself from the blame game. Addressing this crisis requires analyzing what the root causes are, then effecting efforts at where the real problem lies. 

The Big Boy Steam Locomotive

 The first "Big Boy" 4014 steam locomotive was commissioned for Union Pacific Railroad and delivered in 1941. These massive locomotives were built to haul heavy equipment in support of the war effort (WWII), and normally operated between Ogden, Utah and Cheyenne, Wyoming. The Big Boys are 133 feet long and weigh 1.2 million pounds. 

Due to their great length, the frames of the Big Boys are "hinged" or articulated to allow them to negotiate curves. They have a 4-8-8-4 wheel arrangement, which means they have four wheels on the leading set of 'pilot' wheels to guide the engine; eight drivers on the first engine; another set of eight drivers on the second engine; and four wheels trailing that support the rear of the locomotive. 

Number 4014 was retired in December of 1961 after traveling over a million miles. Union Pacific reacquired it from Rail Giants Train Museum in Pomona, California in 2013 and relocated it back to Cheyenne, Wyoming, for a multi-year restoration. It returned to service in May 2019 to celebrate the 150th anniversary of the Transcontinental Railroad's completion. 

The seven other remaining Big Boys are on public display in St. Louis, MO; Dallas, TX; Omaha, NE; Denver, CO; Scranton, PA; Green Bay WI; and Cheyenne, WY. 

As the era of steam locomotives drew to a close with the dawning of the more efficient diesel engines, the machines that had helped build American cities, transported critically needed goods during World War II, and connected the nation from coast to coast, were quickly being relegated to scrap yards. By the early '60's, trains were being powered by diesel engines. In 2019, Big Boy #4014 was returned to Cheyenne, Wyoming for restoration. Since being brought back to life, #4014 has traveled 7,000 miles through 14 states, nearly 100 cities, and countless small towns and stretches of farmland as part of America's 250th anniversary celebration. 

The restoration of #4014 is a fitting symbol of the enduring strength of the working-class communities it visits. Experts had widely dismissed the idea of restoring the 600 ton locomotive to working order as impossible. Big Boy #4014 reminds us of an anxious nation that the sweat, ambition and community spirit that originally built America, still lives. It was merely waiting for the whistle to wake it once again. 

Enjoy the video of Big Boy #4014. Big Boy #4014

High Prices, Who's to Blame?

Like many countries around the world, the U.S. has been beset with rising prices. Especially since 2020 when Joe Biden took office. Seems no commodity, even essential goods has been spared. Politics likes to find a scapegoat for this, almost always to gain points for the party.  The problem is, they rarely get it right. The target for the blame typically gets pinned on the wrong group. 

Identifying a singular culprit for rising prices, or inflation, is often very difficult. Usually because it's not just one culprit. Inflation doesn't happen because a certain manufacturer or industry decides to raise prices to increase their profit margin. Most companies take pride in gaining increased profits due to internal improvements in efficiency and technology. In other words, they earn them. Simply raising profit margins over time without increases in efficiency and better business practices isn't sustainable. 

Getting products and services to market doesn't begin and end with the end supplier to the consumer. There is a "supply chain" that supports the end supplier with raw materials. They might be iron ore, crude oil, minerals, or any material that is obtained from the earth. 80% of all goods consumed on earth begins with a raw material from one of those three groups. It may be a tennis ball, an X-ray machine, a bottle of wine, a car, a pair of headphones, a light bulb, the list is endless. There are some that don't originate with raw earth materials. For instance leather. The seats in our cars, the materials on our sofas that we sit on at home, the wool in our favorite sweaters, cotton for clothing, and many others. Even materials that don't originate with raw earth materials, they are still dependent on the supply chain. Leather needs dyes that require gases and minerals to manufacture. Cotton and wool also require dyes and chemicals to clean and process the fibers. 

Here's the real kicker. 100% of all goods consumed on earth require energy at some point in the supply chain, if not all points. And the vast majority of the world's energy (86%) comes from raw earth materials. 

Supply chains are more often than not complex networks of sources of materials, labor, energy, and services that work together to produce an end product on the market. When even one link in the 'supply chain' is disrupted, this can cause a delay or even a lack of availability of a product in the market. At this point, the laws of supply and demand step in. Assuming the demand stays constant, a lack of supply will result in a price increase. 

Here's another 'real world' example to consider. The Iran war and the blockade and stoppage of traffic in the Strait of Hormuz has seriously stymied the flow of crude oil to many countries. Crude is of course the source of energy for countless industries in many countries. If a country's crude supplies are disrupted, energy costs are going to increase. The cost increase is going to passed down the supply chain. It will cost more to refine or process the raw earth material. Energy plays a major role in manufacturing as well. The end product now costs more, but not as a result of the manufacturer raising prices, or even the energy provider. The higher prices are attributable to the very first link in the supply chain, the crude supplier. Arguably, even the crude supplier can deflect blame. A geopolitical event shut down the suppliers ability to deliver his cargo. 

That's just one of a myriad of possibilities. Twenty-first century global economics is a complex subject. No country is completely self-dependent. Suppliers have suppliers who have suppliers who have suppliers... And the suppliers are scattered around the world. Given the helter-skelter nature of world geopolitical 'events', one can see how easily and abruptly a link in a supply chain can be disturbed. One event in the Gulf of Oman can affect prices in dozens of countries.  It did, and it's not over yet...

Zhoran Mamdani and his lies...

 Zohran Mandani took aim at U.S. Customs and Immigration Enforcement (ICE) agents, Elon Musk, and what he called the "arena of supremacy" in the U.S. during an immigration-themed America 250 speech Friday ahead of the Fourth of July weekend. Let's take a look at some of his statements and break them down.

Mamdani blasted the world's first trillionaire, a milestone Musk achieved with the IPO of SpaceX last month. "We see the wealthiest country in the history of the world, one where children go to sleep hungry while the world's first trillionaire hungers for more." What a convenient little twist of propaganda. Does Uganda have children going to sleep hungry? India? Algeria? Mexico? Who is best managing that issue? Try again Zhoran.

We see monopolies dominating every industry... Ask the executives at Google, Microsoft, Intel, Qualcomm, Meta, and Apple, to name a few, how their attempts to monopolize their industries worked out. The activities in question were promptly shutdown and billions in fines have been paid. Keep trying Zohran.

Oligarchs who buy elections... Yes, there have been numerous attempts to do this in America. Some of the worst offenders are Russia, George Soros, Neville Roy Singham, Hillary Clinton, the progressives of the Democratic Party. Keep trying Zohran.

We see masked agents terrorizing our streets, eating food cooked by our undocumented neighbors before spiriting them away in unmarked vans... I think you have left off an important prefix to 'terrorizing' Zohran. That should be unterrorizing our streets. The job of ICE is tor find and remove undocumented illegal criminal aliens from our streets. They are quite good at that and would be even better if the policing agencies of your so-called sanctuary cities would cooperate according to U.S. laws. Your sanctuary cities are also quite adept at releasing criminal illegal aliens back onto the streets after committing heinous crimes after without requiring bail. Numerous lives of American citizens have been lost to heinous crimes committed by illegal criminal aliens. 

"We see a nation whose immense wealth has been built by those with calloused, dirt-streaked hands, those who toil on factory floors and chisel into stone. And we see a nation that has allowed so much of that wealth to be held instead in the soft hands of a precious few." Precious few, Zohran? Approximately 5% of Americans hold $1 million or more in retirement accounts. About 20% have a net worth of $1 million or more. Over a third of Americans have a net worth of a half million or more. Is the what you call "a precious few?" Try again Zhoran...

Mamdani, who was sitting at George Washington's desk during the remarks (I'm sure he would be so proud...), also praised the legacy of immigrants, claims they have overcome riots aimed at their very existence. The vast majority of riots have been aimed at the police agencies tasked with removing the illegal criminal aliens. Wrong again Zhoran. 

"Over the years, despite laws enacted by the federal government to bar their entry...". We have immigration laws to control immigration just like every other sovereign nation. Follow the laws and you can be become a U.S. citizen. Just like you did Zhoran. More lies to fit your narrative. 

He speaks of wealth as if it were malicious, the vast majority being ill-gotten gains.  He has never spoken of his own family's wealth, or it's origins. 

"Even from the air, we could make out the promise of America, the promise of the beautiful patriotic work of rendering America, year after year, a little more faithful to its founding ideals," he said. Socialism, which apparently is close to your heart, is not a founding ideal of America. Neither is Marxism, Communism, Maoism, Naziism, Fascism. I think I speak for millions of Americans when I say we will not stand for any such philosophies. They are mere experiments that have been tried around the world throughout history, and have failed every, single, time. 

We do not care about the color of immigrant's skin. We care about them following our laws and assimilating into our society. We care about their behavior. We do not care what religion they practice. The first amendment of our constitution guarantees freedom of religion. Unlike some religions around the world, we do not allow one religion to infringe upon another. 

America, from the perspective of "the powerful" is an arena of supremacy where only a select few are allowed freedom, according to Mamdani. "Where not all are created equal. America belongs only to those with the right accent or the right shade of skin. At every moment in our past, those who lead through exclusion and isolation have tried to win power and enrich themselves by turning us against each other." 

Zhoran, I have a suggestion for you. Educate yourself. Try to be objective and open-minded. Read about American history. Read about world history. Learn some facts. Stop spreading lies and propaganda. Many of us here in America have done just that. That is why when we hear your lies we cringe. We pity you and your ignorance. And as for socialism... Take it to Uganda. Take it somewhere else. We are not interested, and we will not allow it. But dont take my word for it. Keep trying, and find out for yourself.