While prices will eventually begin to stabilize – somewhat – there are more than a few variables at work that suggest that in general we can expect higher prices for everything from manufactured good to commodities from here on out. We know that the pandemic shut down factories, even entire harbor areas, reduced the available labor force at every level including: resource extraction, agriculture, processing, manufacturing, shipping and general transportation and even retail availability.
With the new Delta surge, creating a massive pandemic of the unvaccinated, the economy is far from achieving a new normalcy. Those stoppages are likely to recur. Climate change has decimated water supplies, sometimes flooding and storming but mostly intolerable drought and rising temperatures, and the resulting storm systems, have dramatically disrupted operational American refineries (like Ida’s impact on the Chevron plant in Louisiana). Fires have devastated lumber supplies as well.
The rising cost of fossil fuels – needed for ships, most trains, trucks and most of the electrical power generation on earth – is obviously an added cost to… er… everything. Momentary disruptions – such as the above ship blocking the Suez Canal (through which 12% of the world’s shipping must pass) for 6 days in March – only make a bad situation that much worse. Our undersupply of microchips, mentioned in earlier blogs, is also stymying the manufacture of everything from cars and appliances to ships and aircraft… including the repair and update of just about anything mechanical.
Despite the eviction reality for too many Americans, housing prices have soared with a concomitant shove for rental properties too. Panic buying and those taking advantage of low interest rates have created a new level of housing unaffordability. Housing is just one of the basics. For anyone who has been watching both the shortages and the price increases at the grocery store, the higher numbers (particularly for meat and dairy products) are also pretty scary. “Food production, because it so often involves crowded working conditions, was decimated last year, both by COVID-19 shutdowns and a number of widespread outbreaks at packing plants across the U.S.
“The lack of product triggered a sharp increase in meat prices. [Bureau of Labor Statistics] data shows consumer spending on meat increased 5.5% from January 2020 to January of this year… Processing plants are reopening, but many are now required to invest in technology and new processes to keep their workers safe, including more automation and equipment that can be operated remotely.” MSN.com, March 26th. The Delta surge has made those prices continue to rise. Further, lots of consumers have used the COVID downtime for home repairs and upgrades but combined with the contraction of available building supplies and appliances, the disruption to forests and shipping have forced costs for some basic construction necessities to rise 30-40%, even double. A trip to Home Depot can be an amazing realization of a litany of sticker shocks.
There are also vast tracts of once productive farmland in the Western states that lie fallow today for a lack of water. Groundwater and wells are drying up very quickly as the residents of well water-dependent Mendocino, California have discovered. Supply and demand realities, coupled with all the above disruptors, will continue to push farm product costs upward for the foreseeable future.
We’ve watched droughts – more properly “desertification” – cause wars in the Middle East, force mass migrations of de-landed farmers, and create mass starvation in northern Africa. There are few corners of the earth left unscathed by the ravages of climate change. Even the wettest region on earth is suffering.
The country with the most freshwater resources on the planet[, Brazil,] had steadily lost 15% of its surface water since 1991. Gradual retreat in the Brazilian share of the Pantanal, the world’s largest tropical wetland, left water covering just one-quarter the area it did 30 years ago… And the data went only through 2020 — before this year’s drought, Brazil’s worst in nine decades.
“‘When we got the first results, we wondered if there was a problem in the equations,’ said Cassio Bernardino, a project manager for the environmental group WWF-Brazil, which took part in the survey with Brazilian universities and local partners such as the Amazon Environmental Research Institute, plus international collaborators including Google and the Nature Conservancy. They used artificial intelligence to parse some 150,000 satellite images measuring the surface of lakes, rivers, marshes and all surface water across Brazil.” Los Angeles Times, August 31st.
But Brazil is also one of the largest exporters of foodstuffs on earth, so their water impairment will only push food prices even higher. Foodstuffs are global commodities, so any major cost pressure in any major region of the earth will impact prices globally. Even here. For all those climate change deniers or marginalizers, complaining about what they believe compliance costs would do to our economy, they ain’t nothin’ yet… the costs of not dealing effectively with climate change will be so much higher.
I’m Peter Dekom, and I wonder how much irreversible damage it will take for those committed to blocking paying for meaningful climate change solution to realize that they have made an exceptionally wrong-headed decision of alarming proportions.
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