AFBF: Russia Invasion Of Ukraine Will Be Felt In Grain Markets For Some Time
Inflation shocks from Russia’s invasion of Ukraine are already being felt in the grain and energy sectors and could soon affect U.S. growers and consumers. Oil and gas prices are on the march, grain prices are rising to multi-year highs with Black Sea shipping blocked and war likely to prevent plantings in Ukraine or embargo Russian crops. U.S. farmers and food makers worry everything from fertilizer and animal feed, to bread and beer will soon cost even more.
"The Ukraine is the breadbasket of that part of the world, and, just when we look at the value of Ukrainian exports of wheat and corn, in 2020, they exported almost $8.5 billion of those two products, alone,” said American Farm Bureau Senior Economist Veronica Nigh.
Making Ukraine the world’s fourth-largest exporter of both, and the largest exporter of sunflower seed oil. Nigh warns global supplies will be squeezed, and that disruption of Ukrainian exports could last for years, even if this war is short lived. And then, there’s Russia.
“Russia is a significant supplier, particularly of wheat to the world, you’re looking at $8 billion s in wheat exports from Russia. That’s going to have reverberations throughout the market that impacts everyone.”
Fertilizer prices meantime could soar even further, Nigh noted, with Russia a key natural gas supplier and one of the biggest fertilizer exporters. The conflict, she said, will impact Ag and food supplies worldwide, as farmers decide what to grow and how much.
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