Temple U. Professor Misty Blessley raises a timely issue with her monthly Guest Post.
The Strait of Hormuz closure highlights a risk far greater than rising gasoline prices. The world is facing a potential fertilizer shock that could ripple through the global food supply chain. While headlines often focus on oil, the Strait is also a critical corridor for nitrogen-based fertilizers, especially urea, which depends heavily on natural gas as a feedstock.
Roughly 1/3 of global seaborne fertilizer normally moves through this chokepoint. With passage through the Strait at a standstill, the concern is whether farmers will have access to adequate and affordable fertilizer during this planting season.
Fertilizer and fuel are deeply intertwined. Nitrogen fertilizer is produced by converting natural gas into ammonia. Any disruption in gas supply immediately constrains fertilizer production. Thus, when the Strait is shut down, fertilizer producers will follow in turn. It is reported that nitrogen fertilizer supports approximately half of the global population.
Scotts MiracleGro struggled to keep store shelves stocked during the COVID era demand surge, underscoring how long it can take for a disrupted supply chain to regain equilibrium. This is where the risk becomes acute. Corn, wheat, and rice, major food sources the world over, are among the most nitrogen-hungry crops. Countries that rely heavily on imported fertilizer,
such as India, Brazil, China and the U.S., are especially vulnerable with vast amounts of fertilizer originating in the Middle East. A prolonged disruption could mean lower crop yields, eventually leaving empty space on grocery shelves.
The Strait’s closure is rippling into a food security crisis in slow motion.
Classroom Discussion Questions:
1. Effective risk management requires visibility into every material, its origin, and each step of the production process along the supply chain. How can AI be leveraged to help map these dependencies, identify vulnerabilities, and strengthen risk mitigation strategies? (Refer to Chapter 11 of the Heizer/Render/Munson textbook Figure 11.1 as a multi-tier supply chain example).
2. It is widely estimated that as much as 40% of all food produced is lost or wasted somewhere along the supply chain. Identify organizations working to reduce food waste and discuss what would be required to scale their solutions effectively.
3. In your opinion, is reducing food waste a viable mitigation strategy?
Temple U. Prof. Misty Blessley raises a timely topic that has broad interest for those of us who are fast-food consumers.
Taylor Farms, based in Salinas, California, recently issued a voluntary recall of four onion products due to possible E. coli contamination. McDonald’s identified Taylor Farms as the onion supplier for all locations connected to the outbreak and confirmed its decision to halt orders and deliveries from this supplier.