The food system requires exquisite balance. War and climate change are shaking it.

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TODAY'S NEWS. TOMORROW'S INSIGHTS. A daily newsletter from McKinsey & Company   Edited by Katy McLaughlin   Senior Editor, Southern California Global food security at risk The news • Having a dry spell. A heat wave in parts of China is the worst since the start of record keeping in 1961. Drought in Southern Europe is the worst in 500 years. But that's nothing compared with the drought in the American West—the worst in 1,200 years. Summer droughts are intensifying pressure on the world's energy and food systems, which are already strained from the war in Ukraine. Expect the cotton harvest in the US to decline by at least 40% and European olive oil yields to drop by as much as 33% if the hot and dry spell persists. [WSJ] • A shortage smorgasbord. There's a long list of reasons specific food items have either disappeared from shelves or shot up in price in different countries. Americans hankering for the kick of hot sauce can blame drought for chili pepper shortages, while a dearth of foreign dairy workers has Britons paying more to butter their bread. Meanwhile, Pakistanis are being urged to drink less tea due to low foreign-currency reserves. Grain shortages, provoked by the war in Ukraine, mean less bread and grain in Lebanon and Somalia. [WaPo] Depending on the duration and severity of the war, the caloric requirements of 250 million people could be lacking from the global supply. Our insights • A breadbasket at war. Direct effects of the war in Ukraine may reduce the world's grain supply by 18 million to 22 million metric tons this year. Next year could be even worse. The combined effect of challenges in farming (such as reduced farmland due to land mines and ongoing military action) and complications with exports logistics could erase up to 44 million metric tons from Ukraine's typical export volumes. High harvests and increased exports from various parts of the world may mitigate these reductions, but only slightly. • Complex consequences. More than 1.4 billion people live in countries that rely heavily on grain imports, have limited stocks, and have low purchasing power. As food supplies constrict, these nations will face elevated inflation, which will exacerbate budgetary stress. Malnutrition levels could also rise. Previous food crises have led to periods of political instability and violence; the risks could be even higher in this crisis. See our analysis of current food security risks, how next year could unfold, and how to mitigate the current crisis. Understand food risks Was this forwarded to you? Sign up here. Or send us feedback — we'd love to hear from you. Follow our thinking This email contains information about McKinsey's research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. You received this email because you subscribed to the On Point newsletter. Manage subscriptions | Unsubscribe Copyright © 2022 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007