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Home | Featured | How the Food Crisis Could Spur Opportunity in This New Food
Trend


HOW THE FOOD CRISIS COULD SPUR OPPORTUNITY IN THIS NEW FOOD TREND

By Ryan Clarkson-Ledward, 18/08/2022

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As Australians, most of us are pretty familiar with the devastation that comes
from droughts.

We have a huge agricultural industry that has had many struggles with the tough
seasonal shifts in rainfall. And I’m not talking on a year-by-year basis because
droughts are often part of much bigger and longer climate trends.

Whether you buy into manmade climate change or not, history shows us that
extreme weather events have been a staple across the globe for centuries. And
when it comes to an extreme lack of rainfall, it can often lead to extreme
upheaval.

After all, without rain there is no way to grow crops. Without crops, there is
no way to sustain livestock. And without either, societies often begin to run
out of food…

Right now, that is exactly what we’re seeing across much of the Northern
Hemisphere.

Europe, in particular, has been a focal point in recent headlines. Rivers are
running dry as a lack of water squeezes farmers amidst an already tough economic
backdrop.

It may be the worst drought the region has endured in 500 years!

Despite this devastating claim, the bigger problem is likely further to the
east. Because while Europe’s problems are dire, the situation in China may have
much bigger consequences…


TURMOIL IN AGRICULTURE LEADS TO TURMOIL IN MARKETS

One of the more fascinating titbits of information about China’s history is its
ties to the weather.

Some of the longest and most important periods in the nation’s past — the Tang,
Yuan, and Ming dynasties — all collapsed partly due to drought. In other words,
less rain leads to more unrest and the eventual change in imperial rule.

So, with China currently enduring one of the worst heatwaves in 60 years, I
can’t help but wonder what sort of repercussions it may have. Could the weather
finally be the straw that breaks Xi’s iron rule?

Probably not, but no one should be underestimating the impact of this problem.

For the local population, homes and factories have already had major power
blackouts. This is due to a lack of output from hydropower due to the sparse
rainfall.

As the world’s manufacturing hub, that could place a burden on output for more
economies than just China. It’s the kind of problem that may only exacerbate
already high prices amidst our current bout of inflation.

Agriculture, though, is likely the biggest consideration.

Wheat, for example, is a big consideration. China has been the leading grower of
this key grain for the past decade. This drought is seriously jeopardising their
usual production capabilities.

That’s on top of the issues in the Ukraine and Russia too — two nations that are
also big wheat-growing economies who are now locked in war.

That’s why, according to the UN’s Food and Agriculture Organisation (FAO), there
is unlikely to be enough wheat production to meet demand in the year ahead. It’s
just one example of many that are at play in our ongoing food crisis.

And for investors, whether you trade directly in these soft commodities or not,
it’s something you can’t afford to ignore…

However, it’s not all doom and gloom either.

Humanity has endured drought before, and we’ll endure it again now. What matters
is how we do it.


THE FUTURE OF FOOD

In my view, people should be excited about the opportunity that lies ahead for
agriculture.

Few industries have the same potential for innovation as farming and food
science. New tools like robotics, artificial intelligence, and gene editing are
all poised to bring new ideas to how we grow and source our food.

And all of that will eventually lead us closer to the pinnacle of ‘new food’:
cultured meat.

If you’ve not heard of cultured meat before, it’s essentially livestock meat
that has been grown in a lab rather than a paddock. Using cellular science,
researchers can manufacture food without the need to actually rear or kill an
animal.

Of course, for many, this probably sounds eerily dystopian. Critics often liken
it to eating some Frankenstein-like flesh derived from a petri dish.

I don’t doubt that there will be some hesitation to cultured meat at first.

But the long-term potential to engineer cheaper, tastier, and more sustainable
food is an incredible feat. One that I firmly believe will end up winning people
over once they actually get a taste of it.

More importantly, it also has the potential to feed the hungry in times of food
crises like the one we’re currently in. As one food scientist from UCLA making
headway in this field recently noted:

> ‘Animal cells that can be coaxed to form tissues similar to meats could offer
> a protein source to a world facing food insecurity caused by threats ranging
> from epidemics to natural disasters.’

The challenge is developing the science to a point where mass manufacturing is
possible. It’s a challenge that is obviously going to require serious
investment.

So, while there aren’t many options open to public investors just yet, they will
come.

Because like it or not, cultured meat is the future of food. It is simply a
matter of when, not if people will be chowing down on it…

Regards,




Ryan Clarkson-Ledward,
Editor, Money Morning

Ryan is also co-editor of Exponential Stock Investor, a stock tipping newsletter
that hunts down promising small-cap stocks. For information on how to subscribe
and see what Ryan’s telling subscribers right now, click here.


 * Tags:
 * agriculture
 * commodities
 * supply chain


ABOUT RYAN CLARKSON-LEDWARD

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps
bring Money Morning readers the latest market updates, both locally and abroad.
Ryan tackles all the issues investors need to know about that the mainstream
media neglects.

Ryan is also the Editor…

See Full Bio


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