McKinsey Quarterly 2023 Number 1

Re:think

Fresh takes on big issues

A more efficient food system can build global resilience by Nicolas Denis

“ A combination of factors is disrupting the global food supply. There have been other food crises in the past, but I think there are a couple of elements that make this different. We have more people to feed in a system that is global but where there is more geopolitical constraint. And at the same time, emerging trends show a progressive increase of the risk of simultaneous breadbasket failure due to climate change. There are six breadbaskets in the world. Combined, Ukraine and Russia are a big one. The region produces 28 percent of the world’s exported wheat and 15 percent of its corn. The current war in Ukraine has two implications. Besides being a region that produces a lot of commod ities, it’s also where some of the world’s fertilizer is produced. That’s contributed to the price - of fertilizer going up, which affects farmers’ ability to pay for those fertilizers, which can potentially have an impact on yield. It’s happening at a time when grain stocks are relatively low in many countries. That’s because since 2020, we have seen a spike in the price of agricultural commodities, and countries tend to deplete their stocks more aggressively when the price of commodities is high. The combi nation of relatively low stocks with a disruption - in one of the breadbaskets has a further impact on price. The COVID-19 pandemic has caused a disruption to the food system, mostly on a demand level, because people stopped going to restaurants and food service was mostly closed, and those

There are six breadbaskets in the world. Combined, Ukraine and Russia are a big one. The region produces 28 percent of the world’s exported wheat and 15 percent of its corn.

Nicolas Denis is a partner in McKinsey’s Brussels office.

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