McKinsey Quarterly 2023 Number 1

What has not been planted has not been planted. No one can change that.

areas are where a lot of fish and red meat are sold. That, in turn, had an impact on the demand for corn. Many people lost jobs, so they had less income, which also had an impact on demand. So, farmers adjusted to that lower demand. Then suddenly, some sectors reopened, creating a bit of a shock on demand. Add to this an ongoing drought in India and in most places on the planet, including some of the breadbasket regions, for the past few months. That’s led to low production compared with the historical level. On July 22, 2022, an agreement was signed between Russia and Ukraine, and the prices of some commodities have come down. But it only partly solves the problem, as there are indicators that planted and likely harvested areas could be 15 to 25 percent lower than histor ical levels. Current conditions may not produce - the same yield as in previous years. In Ukraine, emerging trends show that 30 million to 44 million fewer tons of row crops are likely to be pro duced in 2023 compared with a typical year. There - is less insight into what is happening in Russia, but some of the companies providing seeds and crop nutrition may not be operating under ideal conditions. So, there are currently more shocks to the food system than usual.

To deal with these problems in the shorter term, we must ask: How do we rebuild strategic stocks for the different commodities? And we have to also reflect on how we could protect populations most vulnerable to food insecurity and make food affordable for them. In the medium to long term, private- and public-sector stakeholders can think about how to build more resilience into the food supply chain. One way may be through diversification of the sources of supply—being less dependent on just a few countries. Another could be by trying to eliminate losses and waste, including by using effective seeds and using irrigation efficiently. Roughly 30 percent of all food globally is wasted across the value chain. And then there’s getting both the right level of protein consumption in diets and thinking about the protein mix. There is a factor of ten or more between the least and most efficient ways of producing protein. Focusing on the most efficient proteins can relieve some pressure on the food system. Use energy as an analogy: the more energy efficiency you create, the more you create resil ience in your energy system. The food system - is very similar.

Copyright © 2023 McKinsey & Company. All rights reserved.

In Ukraine, 30 million—44 million fewer tons of row crops are likely to be produced in 2023 compared with a typical year.

103