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As we say, we are trend forecasters. No one can predict the future because there are too many wild cards, be they manmade or made by Nature.
On the manmade side, the Ukraine War and the sanctions imposed on Russia, as we have noted in great detail in the Trends Journal, have dramatically driven up a number of commodity prices to new highs.
And on the Nature side, heat and drought are likely to combine this summer from the U.S. Midwest to the Pacific coast, threatening tens of millions of acres of crops from lettuce to wheat to beef cattle as the world is in the midst of a global food shortage verging on crisis.
The warning comes from the North American Electric Reliability Corporation, a nonprofit agency formed by electric utilities in Canada and the U.S.
Summer blackouts also are possible as water runs short to produce hydroelectric power from the region’s dams.
The drought in the southwestern U.S. is “the worst in the region for 1,200 years after being exacerbated by human activity,” the Financial Times reported.
“This is by far the worst drought in our records,” Andrew Hoell, drought researcher at the U.S. National Oceanic and Atmospheric Administration (NOAA), confirmed to the FT.
Lake Mead is the largest reservoir in the U.S. and is the essential water source for southern California and the San Fernando Valley, a key produce-growing region for the country. It sits near Las Vegas and is fed by the Colorado River.
This year, the lake has fallen to its lowest level since the 1930s when it was filled after the construction of Hoover Dam. The crisis is so great that a program of the federal and state governments is paying farmers in Arizona, California, and Nevada to not grow crops for three years.
The effort is expected to add an extra three feet of water to the lake, which at full capacity is 532 feet deep at its lowest point. Lake Mead’s water depth now is about 150 feet and is forecast to fall another 12 feet by October and another 26 feet a year later.
Las Vegas has limited the size of new golf courses, hoping to reduce the acreage of grass that will need watering.
California launched a $100-million advertising campaign exhorting people to conserve water. The program was intended to cut water use by 15 percent from 2020 levels; instead, consumption rose 20 percent.
“The agricultural demands downstream have actually been higher this year because it was a warmer and drier spring than normal,” Patti Aaron, spokesperson for the federal Bureau of Reclamation, told CNN.
The shortage has triggered what are called “Tier 1” emergency reductions in water flow to farms and residential and business areas. If the lake’s level falls further, more stringent Tier 2 cuts will automatically come into effect.
The prolonged drought “will not just reduce local farm income…but create tighter supply and increased food prices for consumers across the country,” CNN noted.
Even more alarming, “the drought we’re having now has a high likelihood of recurring in the future,” NOAA’s Hoell said.
TREND FORECAST: The higher prices go, the poorer people get and the lower economies will fall. And despite central banks raising interest rates to stem inflation, it will do little or next to nothing to drive down prices… since manmade and Nature crises are also responsible for rising prices and pushing inflation higher across a spectrum of commodities.