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Goya CEO Issues Dire Warning On Looming Food Crisis

Goya CEO Issues Dire Warning On Looming Food Crisis

By Ella Kietlinska and Joshua Philipp of the Epoch Times

Policies leading to a war on…

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Goya CEO Issues Dire Warning On Looming Food Crisis

By Ella Kietlinska and Joshua Philipp of the Epoch Times

Policies leading to a war on fossil fuel as well as the Russian invasion of Ukraine will contribute to a food crisis, according to Robert Unanue, President and CEO of Goya Foods. “We are on the precipice of food shortage.”

Carlos Vecchio, the Venezuelan Ambassador who is recognized by the United States, and Goya Foods President Robert Unanue hold a press conference together on December 21, 2020 in Doral, Florida. The two held the press conference to discuss details of a recent shipment of humanitarian aid to Venezuela, donated by Goya Foods.

Russia and Ukraine together produce half of the fertilizer used in the United States and fertilizer prices have quadrupled, Unanue said on EpochTV’s “Crossroads” program.

However, the fourfold surge in fertilizer prices will affect African and European countries more severely than the United States because the latter is currently more independent with regard to food, Unanue said, with the big problem being that it’s planting season in southeastern Ukraine and people are fighting a war.

“There’s two and a half million acres of sunflowers to be planted,” he said. Farmers there will be planting less and yielding less, because of the rising costs and the lack of good yield. “It’s going to send food prices spiraling.”

A combine harvester gathers wheat in a field near the village of Hrebeni in Kyiv region, Ukraine, on July 17, 2020.

Both Ukraine and Russia are major producers of the world’s wheat and corn. Together, they account for about 29 percent of global wheat exports, 19 percent of global corn supply, and 80 percent of global sunflower oil exports.

Moreover, the irrigation systems in southeastern Ukraine have been bombed and ports have been cut off, Unanue noted. Mariupol, a port on the Azov Sea, has already been cut off, and Odesa, a Black Sea port, is the next target, he added. “That will landlock Ukraine and prevent them from exporting.”

The biggest component of food cost is transportation, so the current war on fossil fuels has made the United States no longer oil independent.

“Shipping in a pipeline is free,” he said. “But when you put it on a ship, with rates 10 times where they were two years ago, we are buying oil at retail.”

Nitrogen-based fertilizers are made from natural gas, so the war on fossil fuels and energy independence also impacts the cost of fertilizers, Unanue said.

The CEO gave an example of coconut water, which his company imports from Thailand in bulk, to illustrate the impact of the surge in transportation costs.

A case of coconut water used to cost $1.44, but now the cost per case has increased to $15 due to rising transportation expenditure, he said. “That’s an inflation, a tenfold inflation.”

This illustration photo taken on July 11, 2020, shows a selection of Goya food products in a Los Angeles supermarket.

Goya has embarked on a mission to provide humanitarian and spiritual aid to Ukrainian refugees in Poland. The company partnered with organizations and individuals such as the Knights of Columbus of Poland, Global Empowerment Mission (GEM), and ex-U.S. green berets who will distribute food donated by Goya from its European facility as well as rosaries donated by Americans, Unanue said.

He said the ex-green berets are very courageous men, having gone into 40 cities in Ukraine with food and medicine.

“We’re there with nourishing the body, but we also want to nourish the soul,” he said of the company’s creed.

“God created humanity. But humanity has created the way to destroy itself—nuclear, chemical, biological,” Unanue said. “Now we’re using food as a weapon. We have to move closer to God.”

“We need to love and build, not hate and destroy. And that’s our mission.”

Firefighters respond to an industrial fire that threatened a Perdue Farms facility in Virginia on April 30, 2022. 

With a food crisis looming, recent fires and other accidents that occurred at a multitude of food processing facilities within the last few months, raising concerns over yet another burden on an already vulnerable food industry.

Unanue said that such incidents often occur due to deferring preventive maintenance of these facilities during the COVID-19 pandemic. When lockdowns were imposed on most companies and businesses, the food industry kept working.

Since then, Goya has doubled its capacity and its facilities operate around the clock, but “any factory needs to stop for maintenance at least once a year,” he said, adding that Goya’s plants stop twice a year for maintenance.

Tyler Durden Mon, 05/16/2022 - 17:45

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Economics

Relief rally or sustained bounce?

In this video insight Roger discusses current market conditions with equities having rallied off the lows recently thanks to a lower oil price and a retreat…

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In this video insight Roger discusses current market conditions with equities having rallied off the lows recently thanks to a lower oil price and a retreat in bond yields amid fears of a recession. Have we reached the bottom yet?

Transcript

Roger Montgomery:

You have probably been relieved seeing the market rally over the last few days. The S&P500 Index made a low on June 17 and has since bounced almost eight per cent, dragging markets globally up with it. I was personally feeling pleased with my recent additional investment in the Polen Capital Global Small and Mid Cap Fund. But investing is a long-game, we’re in it for years not minutes.

Nevertheless, one of the biggest objections to investing during a crisis – which history has shown to be the best time – is the possibility the market could fall further. And it could. 

Equities have rallied off the lows recently thanks to a lower oil price and a retreat in bond yields amid fears of a recession. Recession concerns are dominating the narrative and even the head of the U.S. Federal Reserve, Jerome Powell has admitted the risk. Meanwhile google searches for “recession” have spiked ten-fold and are as high as during the Global Financial Crisis and the onset of the COVID pandemic.

Perhaps counterintuitively, recessions can be good news for equities particularly if prices have already fallen dramatically. That’s because, rather than focusing on the negative pressure on company earnings, investors instead look to the fall in bond yields and the consequent positive effect on present values.

But should we be getting too excited? Have we hit the bottom already? Even though I have recently invested additional capital, I am not certain we have hit the bottom. I can see reasonable arguments to suggest there could be more losses for equities. To be clear of course this would be a positive for anyone who considers themselves a net buyer of shares. The lower the price goes, the higher the subsequent return.

The U.S. Federal Funds futures curve has recently reduced its bet on additional aggressive rate hikes and is even forecasting an easing of interest rates next year. Along with the decline in the oil price and other commodities such as wheat, corn and copper, the reversal of rising bond rates suggests investor sentiment had switched recently from inflation to recession.

Unfortunately, the optimism is due to the U.S. Federal Reserve’s history of backing off rate rises whenever the equity market has fallen between 15 and 20 per cent. It’s known as the “Fed Put.”

It is true that the U.S. Federal Reserve eases aggressively when bear markets in equities precede recessions. However, it is also true that when the Fed has chickened out the circumstances were very different to today.

Since the 1990s, and certainly after the GFC, the primary problem confronting central banks and governments has been pallid organic economic growth and low inflation, and even the intermittent threat of deflation. Understandably, rate cuts make sense.

But prior to the 1990s the Fed’s response differed. In the 1970s for example persistent inflation meant Fed policy was aimed squarely at fighting inflation, with less concern for the impact on economic growth. Back then the Fed raised rates despite already large falls in the stock market and a weakening economy.

I cannot be sure of whether today’s U.S. central bank will be as callous as it was decades back however the reality is inflation has broken out and wage growth is accelerating with unions protesting and striking, risking a dangerous wage-price spiral.

So have we reached the bottom yet? Well, uncertainty about the Fed’s stance is sure to mean more volatility. Until we get a clear read on interest rates, the lows could easily be retested.

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Commodities

Will Royal Caribbean Ban a Popular Bad Habit, Add Unpopular Fee?

The cruise line’s President Michael Bayley addressed two controversial topics while cruising to Alaska on the annual President’s Cruise.

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The cruise line's President Michael Bayley addressed two controversial topics while cruising to Alaska on the annual President's Cruise.

Cruise lines face a lot of challenges that traditional hotels don't deal with. A cruise ship is an enclosed space that's moving. This means that passengers impact each other more than they might in a traditional hotel, and the cruise line has to make decisions that some passengers may not like because they support the bottom line.

In addition, cruise lines face an age-old problem that every land-based casino operator has to deal with -- people like to smoke in casinos, but non-smokers hate smoky casinos. That creates a conundrum that's easier for a large land-based casino to solve than it is for a cruise line.

A land-based casino can have meaningful smoke-free areas. That can mean having a floor or a very distinct room designated smoke-free. It's possible to have meaningful separation because you have actual separate spaces.

That's much harder to do on a cruise. In most cases, there are smoking sections on a Royal Caribbean International (RCL) - Get Royal Caribbean Group Report ship, but smoke travels and sensitive non-smokers can't avoid it. The Wonder of the Seas does have a separate smaller casino (originally meant for high-rollers when the ship was supposed to sail out of China, but that's the only ship in the fleet that has two truly separated casino areas.

It's a problem the Royal Caribbean President Michael Bayley addressed during his company's annual President's Cruise.

Image source: Daniel Kline/TheStreet

Will Royal Caribbean Ban Smoking in its Casinos?   

There was a period during the omicron variant section of the pandemic where Royal Caribbean tightened its mask rules and banned smoking in the casino. That was a practical concern because, at that time, the company was requiring customers to put their mask on between sips of a drink.

When that period ended, the cruise line reinstated smoking in its casinos. "It's a bit of a conundrum," Bayley said during a question and answer session on Ovation of the Seas during the President's Cruise, the Royal Caribbean Blog reported.

"The dilemma is that there are many people who do want to smoke in the casino. I know that's not a popular response, but it's it's the truth. I'm not judging anyone or anything, but there's a large group of people who do want to smoke in the casino," he said.

Banning smoking, which the company has tested, produces lower revenue in the casino.

"Every, I would say every couple of years, we do test this and we take one or two or three ships and we ban smoking in the casino. And the result is less people go in the casino and that's the reality of it," he explained.

Bayley does not expect a smoking ban to happen, but said the cruise line is looking at ways to make more area in the casino smoke free.

Will Royal Caribbean Add a Fuel Surcharge?

Rising gas and oil prices impact cruise lines as higher fuel costs make it more expensive to operate. In the past, when prices have surged, some cruise lines have added a fuel surcharge.

That's something Royal Caribbean has a legal right to do (it's in the long cruise contract you didn't read) but has held off so far on doing that. Bayley shut down fears of the cruise line adding one (at least right now), according to the Royal Caribbean Blog, which is not affiliated with the cruise line.

"The fuel fuel bill for Royal Caribbean is, as you can imagine, it's massive and it's gone up by I don't know what the percentages, but it's a huge chunk. It's hundreds of millions of dollars," he said. "But at the moment, we're not planning on putting a fuel surcharge on."

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Commodities

More world oil and gas investment desperately needed, report warns

World energy markets are facing a “red alert” and there’s more trouble ahead without enough investment going into oil and gas to meet demand World…

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World energy markets are facing a “red alert” and there’s more trouble ahead without enough investment going into oil and gas to meet demand

World energy markets are facing a “red alert,” and there’s more trouble ahead without enough investment going into oil and gas to meet demand, according to a new report by the International Energy Forum (IEF).

“At a time when the global energy crisis calls for more supply, underinvestment in hydrocarbons will be the main reason for supply shortages, higher prices and volatility for the foreseeable future,” said IEF secretary-general Joseph McMonigle.

The IEF represents energy ministers from 71 producing and consuming nations, including Canada, the United States, Germany, China, India, Norway and Saudi Arabia.

New investment in oil and gas production does not contradict efforts to eliminate carbon dioxide emissions but is badly needed to maintain economic stability as policy-makers manage a long-term path to net zero, McMonigle said.

The International Energy Agency projects that while the share of renewable energy in global markets will grow to 26 per cent in 2050 compared to 12 per cent in 2021, the share of oil and gas will remain about the same, at 50 per cent in 2050 compared to 53 per cent in 2021.

A December 2021 IEF report with IHS Markit found that, in order to ensure affordable prices and sufficient supply to meet demand, world investment in oil and gas would have to increase to pre-COVID-19 levels of US$525 billion per year and stay that high through 2030.

But investment in 2021 was depressed for a second consecutive year at $341 billion – nearly 25 per cent below 2019 levels, IEF noted. Meanwhile, oil and gas demand is now near pre-pandemic highs and will continue to rise for the next several years, particularly in developing countries.

Russia’s invasion of Ukraine has added another layer of volatility to the picture.

Of the $525 billion required world investment in oil and gas, IEF said Russia and the Caspian region represented 8.5 per cent or $45 billion in 2030.

With major oil and gas companies announcing complete withdrawals from Russia, declining rates on oil and gas fields will accelerate, further reducing Russian supply. This emphasizes the need to increase oil and gas investment outside Russia, IEF said.

“Energy markets were already tight before the Russian invasion of Ukraine due to the investment crisis and rising demand as the world unlocked from the pandemic,” McMonigle said.

“Based on current data, we see more trouble ahead in the second half of 2022. Commercial and strategic inventories are low, spare production capacity is dwindling, and China and other parts of Asia are expected to end travel restrictions, boosting demand.”

By Deborah Jaremko

Deborah Jaremko is director of content for the Canadian Energy Centre, an Alberta government corporation funded in part by taxes paid by industry on carbon emissions.

Courtesy of Troy Media

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