Part 2 Russia-Ukraine Invasion Impacting U.S. Ag

Following Monday’s report on Russia’s invasion of Ukraine, Jim McCormick, a hedging strategist with AgMarket.net is back with us to cover some options for the agriculture industry.

While the market jumps may only be short-term, producers can take advantage for the long-term. McCormick says now is a good time to look at your marketing plans beyond 2022; think 2023 and 2024.

“So, if you're a producer out there, you know, how do you handle this? You dribble sales in. You buy puts under the market because and then realize those puts may expire worthless. But if the market keeps can going higher, you keep ratcheting up that floor. Our belief is, you know, this is probably an opportunity in the long run, that you're probably going to see multiple year highs. That you don't want to just sell the 22 production you probably want to think about selling the 23 and maybe even laying off some of the risk in 2024 because more than likely, these prices will not be seen for many, many years. Wherever this tops”

Although the outlook may be positive for those selling and marketing grain in the short-term, not all of this is good news in the agriculture industry. Belarus & Russia are big exporters of fertilizer and Bela-ruse is allowing Russia to invade Ukraine from its borders. This means any retaliation by the U.S., or its allies, could bring stiff price shifts in an already high marketplace.

“So, you got a country that we are reliant on some of their fertilizer, at war with a country that we are trying to sport as trying to keep their democracy and you know, it's going to get very challenging. The logistics issues are probably going to get worse before they get better.”