Part 1 Russia-Ukraine Invasion Impacting U.S. Ag

By now I’m sure you’ve heard of Russia invading Ukraine. While the world awaits any official international action, markets around the globe are reacting quite quickly. Russia’s actions not only puts stress on the general world economy, but its rocking the global food supply… seriously effecting Ukrainian agriculture, along with everyone else.

Jim McCormick, a hedging strategist with AgMarket.net says grain markets are unstable, and for a good reason.

“Ukraine roughly represents about three percent, you know, three to four percent of the world's corn production between the Ukraine and Russia. But when you get to the wheat production, they're roughly almost 14-15% of the world's wheat production. There are huge export markets out there. And now we don't know are they going to get that product out, the stuff they've already sold; the corn specifically roughly 600 million bushels. Winter wheat, obviously coming out of dormancy. Are they going to get that harvested if you're in the middle of a shooting conflict?”

Kansas republican Senator Jerry Moran says farmers, already feeling the punch of higher input prices, will face more headwinds.

“Diesel fuel, fertilizer, all will be impacted. Despite some higher commodity prices, the input costs have been skyrocketing already because of supply chain and transportation. So, this administration, this Congress ought to come together and increase the energy production in the United States and help our allies in Europe meet their energy needs, but do something significant to take the price back down, damaging the Russian economy.”

Moran says there’s an opportunity to fill the global wheat supply gap caused by Ukraine ports closing, however, U.S. wheat growing conditions are currently dry and not ideal.

To find out how should you handle market impacts… tune in tomorrow for part two of this report on Russia-Ukraine’s conflict impacting agriculture.