Sara Menker Warns About Fallout of Rising Food Insecurity
Sara Menker is the CEO of Gro Intelligence, a privately owned company that makes predictions on climate change and food security using data and AI. However, when Menker appeared before U.N. Security Council, May 19, it was more like a lobbyist. Gro’s data has found that, because of rising food prices around the world, 400 million people have become food insecure in the last 5 months alone. Gro’s definition of food insecurity is someone who lives on less than $3.59 per day.
That’s the same number of people that China has taken out of poverty in the last 20 years, meaning two decades of progress have been undone in five months.
Speaking to the assembled world leaders on May 19, Menker said, “I come here today to share insights from our data, with the underlying hope that all of us here with the power to change the course of history will choose to do so.”
Menker, 40, who was chosen as one of TIME’s Most Influential People in 2021, was born in Ethiopia, attended college at Mount Holyoke, worked as a commodities trader on Wall Street, and left to start Gro to use technology to tackle challenges like hunger and climate change. Gro today works for governments and major food companies. He analyzes hundreds of trillions data points, including satellites and government sources. This allows him to project the global supply of agricultural commodities.
In recent months, as the war in Ukraine raged on, Gro’s systems started flagging problems that were putting a growing number of people at risk of going hungry. While some of these problems were made worse by war, many more have been growing for longer due to the policies of other countries banning exports and imposing tariffs. Menker spoke with TIME after briefing U.N.
(This interview was condensed and edited to improve clarity.
Gro found that nearly 400 million people became food insecure over the past five months due to an increase in staples like wheat and soybeans. What is the best way to explain it?
Each of these crises are driven by various factors, but I broke it down into five main crises. Any one of them would be large on its own. These five are unheard of.
First, fertilizer prices have risen by three times in the past two years. That’s driven by a combination of factors. War obviously adds fuel to the fire, but there’s a natural gas availability issue. There’s sanctions, and then there’s logistical bottlenecks of getting out. Even though fertilizer from Russia isn’t sanctioned, it can be difficult to get anything out of Russia. So it’s a confluence of things.
Climate is the second. Wheat growing regions of the world are facing the worst drought they’ve ever faced combined for the last 20 years. So climate shocks are continuing to impact productivity and production. These two factors can be thought of as inputs.
From an output perspective, there is a cooking oil crisis. The price of palm oil is up 3 times In the last two years, and that’s been driven by increased biofuel demand. That’s driven by increased demand from China. Canada and Brazil both experienced droughts that resulted in less production of vegetable oils. And then Russia and Ukraine used to export 75% of the world’s sunflower oil. Indonesia, the world’s largest palm oil producer, banned exports. Today they just announced that they’re removing the ban. But once you’ve banned it, the prices don’t come down as fast as they’ve gone up.
Continue reading: Gro Intelligence CEO Sara Menker believes big data can save our climate and food supply
Fourth is the record-low inventories in grains generally. Based on estimates from government agencies around the globe, there are approximately 33% of our annual consumption needs in inventories. All we have to do is move it. According to our data, that figure is near 20%. That’s only 10 weeks left of worldwide inventory. And that’s a really big deal.
Your fifth and final consideration is logistics. You can’t get anything out of Ukraine. There’s talk about things moving through rail, but if you move everything you can through rail, you can maybe move 10%, so it’s just a drop in the bucket. And then you can’t move stuff out of Russia either, because of maritime hazards. It is possible to mine the seas.
How much supply would you get if the Russia-Ukraine war ended today?
This war didn’t cause this crisis, I just want to be clear. The war fuelled a fire already burning. Tremors began to feel even before the COVID-19 Crisis, which highlighted the fragility in our supply chains. This has been a crisis that was in the making. And the reason I frame it that way is that it’s really important for global leadership to understand this is not a come and go [issue].
If the war ends, that is better than where we’re sitting today. But there’s also a lot of infrastructure that’s been destroyed during the war. So you have to rebuild that and it’s not like you go back to the volumes you are at right away.
How does climate change affect the ability to manage these crises effectively?
Our food supply is not stable and predictable due to climate disruption. It just throws my mind off when last year we were writing about how North Dakota was suffering from a record drought and so its corn and soybean yields were going to drop and they did— by like, 24%. This week we’re writing about how it’s too wet there and farmers can’t plant. That’s climate change, this lack of predictability, this lack of stability itself that makes our food systems very, very fragile.
Then you’ve had record demand growth. In places such as Sub Saharan Africa or Asia, there has been record economic growth.
While you are the CEO of a privately owned company, you spoke out at the U.N. urging countries to unite to address the imminent food crisis. Are you ready to take on this role of advocacy? Do you believe there are solutions you can offer?
We are a private business, however, we do work with financial institutions and work with both large and small businesses. Additionally, we work closely with government to ensure food security. Gro was founded to help me avoid such a thing. It would have been nice if people had noticed when our alarm bells rang in 2017. Because it’s always about preventative medicine versus ending up in the ER.
We’re a mission driven company. To address the serious problems facing humanity, we set up this business. We believe business has a huge role to play in it because that’s how you make it sustainable. That’s how you fund it. These aren’t normal circumstances, you also know. It would be illegal to know and not speak about this information.
Is there something that could have been done sooner to avoid this?
A large part of the solution is to examine what agricultural trading looks like. There’s no version of a country that actually has any and all natural resources it needs in one place. You can’t grow everything you need in a country. You actually need the world to function in a particular way, but the world became more isolationist in the last five years—not more connected—as politics and policy came into play. This has led to a decrease in diversification and trade partnerships.
It would have been possible to invest more in climate-climate adaptation. It’s only now that adaptation is sort of a core and becoming a bigger part of the agenda. Transition and risk were the focus of this agenda, while we now face the consequences for actions taken 20-30 years ago.
Do you know of any government or company that has used your data for food security?
Without naming any countries, I’m able to give an example. Because of the unusually heavy rains, one country wanted to prohibit corn exports. However, this creates problems for downstream parties. People who are contractually bound to export now default on their contracts. This can lead to issues with banks.
It was something we heard from a large institution. We quickly pulled up data and checked the rainfall. They were right. It was very dry. It was healthy, however. We looked at soil moisture and crop health. Because it started the season with enough soil moisture, the crop was being resilient and had enough fuel to get through the dryness.
And if you looked at domestic prices in that country, and you look at it in all the different cities, prices weren’t going up, they were going down, which is not a signal for when you’re short of anything. We put all that together, and we were able to remove the ban.
What are the next steps if we don’t see major improvements? Are the 400 millions number going to continue growing?
Which direction should we take? There is a lot of political instability in the world. Prices won’t continue to go up. You’ll just start losing demand, and demand destruction means more poverty, which means more instability and lack of economic growth. If we don’t do something about this, we are in for a real economic crisis around the world and no country is going to be immune.
You’ll see it manifests itself in many, many different ways. There are headlines about Netflix subscribers being lost. Netflix subscribers are losing out because of the two-fold increase in the cost of grocery shopping in America. Something’s gonna give—you’re going to buy fewer shoes—and that’s why I said it will manifest itself in completely unrelated industries as well.
Who are the people who benefit from an increase in price?
Nobody. Some countries are net exporters and make more. It is clear that American farmers have been making more as a result. Are Americans benefiting as a nation? No, the global economic shocks have global consequences. Our financial system is interconnected across the globe.
When you consider decades of economic advancement and think about what drove it, that was the increase in people out of poverty as well as the rise of global consumers for all of these products from different companies. They’re having their products bought in Nairobi and in Addis and Jakarta. It all starts to get stalemated and no one wins. That’s why I really think that there has to be some level of difficult decision-making around what the right actions to take are.
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