By
Evan Bush
and The Associated Press
The pandemic had already caused food prices to rise.
Now, Russia's war in Ukraine — between two major wheat producers and in a region known as the breadbasket of Europe — has sent wheat prices soaring, raising the risk of severe food shortages and famine in some regions of the world. and threatening to further increase food prices in the United States.
That instability leaves many American farmers, particularly those in the drought-affected West, grappling with rising costs for fuel, fertilizer and other major farm components.
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The Ukrainian government banned the export of wheat and other staple foods this week, a move that Roman Leshchenko, Ukraine's Minister of Agrarian and Food Policy, said in a Facebook post was necessary to "satisfy the population's needs for food products." critical" and prevent a humanitarian crisis.
Combined, Ukraine and Russia account for about 30% of global wheat exports, said Mark Welch, a professor in the department of agricultural economics at Texas A&M University.
So for the Ukrainian government to restrict exports "shows how serious the situation is," Welch said.
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Between 720 and 811 million people went hungry in 2020, according to a recent report by the Food and Agriculture Organization of the United Nations.
World food prices, already rising due to the pandemic, hit an all-time high in February, when they rose by around 2.1%, according to the UN.
Wheat is a global commodity, and war-related shortages make prices more volatile.
The United States exports about half of its wheat supply.
"We will feel an impact nationally, in terms of food inflation or pressure on food prices," Welch said.
"Globally, of course, that situation becomes much more dire for countries that rely heavily on grain imports."
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Countries in the Middle East, North Africa and Asia are highly dependent on imports from Ukraine and Russia.
About a third of Ukraine's total wheat exports go to three countries: Egypt, Indonesia and Bangladesh, according to the International Grains Council.
Some countries, such as Australia and India, are having bumper harvests in wheat production, which could help stem the global impact of the war in Ukraine.
"There are some opportunities to change trade flows and sources of production that we don't normally think about. That may buy us some time to see how long and deep this conflict will go or if it drags on," Welch said.
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The effects of the war, and rapidly changing markets, are affecting US wheat farmers.
"It's kind of a shock to the grain system," said Mike Carstensen, a wheat farmer in Washington state.
"Not everything is rosy on the farms."
While prices have risen significantly since the conflict began, so have the costs of supplies such as fuel, fertilizer, herbicides, and pesticides.
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"The cost of our inputs has also gone crazy. Part of that is the energy component in conflict zones," Carstensen said.
Sanctions against Russia have pushed up oil and gas prices, raising the cost of driving tractors in the field and transporting wheat to major markets by truck or, as is common in the Pacific Northwest, by barge.
A worker directs the emptying of wheat into a trailer during harvest at a farm in Varva, Ukraine, on July 26, 2016.Getty Images
Fertilizer costs are also rising, fueled by high demand and high gasoline prices.
As the price of crops such as wheat and corn rises, farmers are trying to capitalize on and apply more nitrogen fertilizers.
Many fertilizers are produced through a chemical process that involves natural gas.
About 75% of the production of these fertilizers lies in the cost of natural gas, Welch said.
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"When the price of natural gas goes up, the price of fertilizer goes up," said Ben Barstow, a farmer in southeastern Washington who will fertilize several crops this spring.
"It's going to be a bitter pill."
Herbicides and pesticides, which have been hit by slowdowns in production and the supply chain, remain in short supply and command a high price, farmers said.
Much of the western United States remains mired in drought, made worse by climate change, according to new research.
Some regions have been particularly affected.
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In Washington state, last year's heat wave and drought caused wheat production to plummet to almost half of the previous year's total.
"We still lack moisture in the soil," Barstow said.
"It's typical farming stuff. You pick what you want to focus on the most and let the rest go."
Welch said the rise in wheat prices and the impact of the war in Ukraine will be around for some time and will depend on how long the invasion lasts.
In peacetime, Ukrainian farmers would now be preparing to plant their spring wheat crop.
In late summer, they would look to harvest the winter wheat that has already been planted and is now dormant.
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"Will they have access to their fields, and access to the inputs they need (fertilizer, fuel and seed) to grow crops?" Welch wondered.
For Carstensen, it is important to keep the perspective of the conflict.
"We all complain about inflation, but we have no bombings or family members affected by explosions," he wrote in an email.
"It's a human crisis."
