Strategic Assets – May 2026

In June of 1972, a Soviet trade official named Nikolai Belousov stepped off a flight in New York.

Belousov ran Exportkhleb — the agency the Soviet government used to buy grain abroad. He was in town to do some shopping.

Over the next two months, he would orchestrate the largest grain purchase the world had ever seen.

He started with Michel Fribourg, the head of Continental Grain — a man who ran his firm with a famous obsession for secrecy. The two met privately and shook hands on four million tons of American wheat at a price the Russians liked. Fribourg believed he had the deal of the year.

He had no idea Belousov was about to walk straight from his office to Cargill, to Cook, to Bunge, to Dreyfus, to Garnac.

Six firms in five weeks. Each negotiating in private. Each one assuming it was the only American house Belousov was talking to. None of them aware that the man across the table had just survived the worst Soviet grain harvest in over a decade, and was quietly buying every bushel he could find, from anyone who would sell, before the market figured out what was happening.

By the time the news leaked, the Soviets had locked in roughly a quarter of the entire American wheat crop — 440 million bushels for about $700 million.

The real scandal was that America’s Cold War adversary hadn’t even paid full price.

For years, the US Department of Agriculture had been running an export subsidy program designed to clear stubborn American surpluses: whenever a US firm sold grain abroad, Washington paid the exporter the difference between the higher domestic price and the lower world price. The idea was to make US grain cheap enough to compete on the world market and offload product American buyers wouldn’t take.

As Soviet demand drained American stocks and pushed domestic prices higher, the USDA kept cutting subsidy checks against the old, lower benchmark. The bigger the Soviet order grew, the bigger the taxpayer-funded discount became. By the time Congress and the Office of Management and Budget shut the program down a year later, roughly $300 million had been paid or pledged on the Soviet sales alone.

So the American taxpayer had effectively helped finance the largest grain purchase in history. The American farmer didn’t yet know what had happened. And the American consumer was about to find out at the supermarket.

Within months, the price of wheat more than doubled. Global food prices rose substantially — by some measures 30 to 50 percent over the following two years. Bread, beef, eggs — everything moved.

Congress was embarrassed enough to pass a new export reporting system the following year, designed to ensure that no one could ever quietly pull off the same trick again.

The press named the episode the “Great Grain Robbery.”

But the grain story was only the first shoe to drop.

In October 1973, OPEC announced its oil embargo. Within months, crude quadrupled. And almost no one in the political class wanted to admit what every farmer in the country was about to figure out the hard way: the food shock and the energy shock were the same shock.

Modern agriculture runs on hydrocarbons. Ammonia — the foundation of nitrogen fertilizer — is synthesized from natural gas. Phosphate rock is mined, processed, and shipped using diesel and electricity. Tractors burn fuel. Trains burn fuel. Drying corn and storing grain takes energy. When the cost of energy doubles, the cost of putting food on a plate follows a few months later.

In 1973 and 1974, fertilizer prices more than doubled, with certain nitrogen and phosphate products spiking as much as 300%. Fertilizer went from a manageable line item on the average American farm to one of the largest variable costs on the books. In Saskatchewan, the windfall flowing to potash producers was so large that, in November 1975, the provincial government announced it was taking over the industry — eventually acquiring four mines through negotiated buyouts to capture the cash for the public treasury.

The decade that followed was brutal for paper and beautiful for things you could touch.

Gold went from $35 to $850. Oil went from $3 to nearly $40. Silver went from about $1.50 to nearly $50.

The Dow Jones Industrial Average sat at 1,000 in 1966 and at 1,000 in 1982 — sixteen years of going nowhere in nominal terms, and a serious loss in real terms.

Barrels, ounces, bushels, and tonnes won. Anything denominated in dollars lost.

The lesson of that decade — and that the postwar architecture, rebuilt on the back of cheap oil and open shipping lanes, allowed the world to forget — is that food and energy are not separate problems. They are the same problem with two faces.

When energy seizes up, fertilizer seizes up shortly after. When fertilizer seizes up, the next harvest comes up short. By the time the consumer sees it on the shelf, it is far too late to do anything about it.

That linkage is reasserting itself right now.

And yet, while energy has climbed and gold has shot to all time highs, the agricultural complex is still trading as if nothing has changed.

That setup looks deeply familiar to us.

We don’t pretend to know how the current Hormuz situation resolves. What we do know is that real assets are scarce. And the agricultural side of the real-asset story may be about to pop off.

This month, we want to put one of the largest names in that complex squarely on your radar.