Sen. Marshall and Ambassador Doud: Russian chaos in Ukraine hurts world supplies of wheat, corn and more

(Washington, D.C., March 7, 2022) – U.S. Senator Roger Marshall, M.D. and Ambassador Gregg Doud, Former USTR Chief Agricultural Negotiator, penned an op-ed for the Kansas City Star highlighting the agricultural inflationary implications of the Russian invasion of Ukraine, which will have rippling effects including high prices at the grocery store for all Americans. You may click HERE or scroll below to read their op-ed in its entirety. Senator Marshall and Ambassador Doud said in part,

“… Ukraine is the second-largest nation in Europe and it has rich agricultural soil. A whopping 70% of its land mass is arable. In rough estimates: It produces 18% of the world’s sunflower oil exports, 16% of the world’s corn exports and 12% of the world’s wheat exports… The bottom line is that a continuing conflict that inhibits Ukrainian farmers’ ability to plant and harvest means the price of corn and other commodities could explode. This will impact the pocketbook of every American already faced with staggering inflation… The strength and resilience of the Ukrainian people has inspired this nation and the world. We must continue to stand side by side with them and all their farmers who work each day to feed and fuel those around the globe.”

Russian chaos in Ukraine hurts world supplies of wheat, corn and more

By: U.S. Senator Roger Marshall, M.D. and Ambassador Gregg Doud, Former USTR Chief Agricultural Negotiator
Kansas City Star
March 6, 2022

As the atrocities of Russian President Vladimir Putin’s bombs and bullets in Ukraine continue, some Americans wonder why they should care about this historic conflict on the other side of the world. Outside of the obvious humanitarian crisis, you can be forewarned this war will have dire consequences here at home. The American people are already dealing with the highest inflation in over 40 years, and it’s about to get worse.

Let’s lay some groundwork: Ukraine is the second-largest nation in Europe and it has rich agricultural soil. A whopping 70% of its land mass is arable. In rough estimates: It produces 18% of the world’s sunflower oil exports, 16% of the world’s corn exports and 12% of the world’s wheat exports. For perspective, Ukraine exports more wheat than the United States. The U.S. is the largest corn exporter in the world and Ukraine exports roughly half that amount. Exports that are now shut down. Any 2021 grain that hasn’t shipped out of Ukraine will be stuck either in ports or in the hands of the Russians.

Trade out of the Black Sea has virtually stopped, as carriers won’t take the risk of shipping in an area of active war where multiple cargo ships have been hit by missiles. Among Russia, Ukraine and several other countries that use the Black Sea, roughly one-third of world wheat exports have stopped. This is already sending shock waves through the agricultural commodity futures trading business, which establishes the value of the world’s most basic staple foods including, corn, vegetable oils and wheat.

Ukraine has a climate very similar to the northern Great Plains’. In just a few short weeks, spring corn planting should begin there — that is if there is enough fuel and fertilizer to sow and ultimately grow crops. In a few months, wheat harvest should begin — that is if the infrastructure still exists and there are resources to bring Ukraine farmers’ crops to the world’s consumers.

This war will also reverberate through Russia as economic sanctions and the risks of conducting business with Russia set in. Ultimately, as that nation causes devastation in another sovereign nation, Russia may reap what it sows.

The outlook is certainly bleak from an inflationary standpoint, as this war is already driving grain prices up. China will continue to be the world’s largest importer of agricultural products to the tune of $160 billion a year, including its recent emergence as the world’s largest corn importer. After African swine fever ripped through its pig herd, which makes up roughly one-half of all the hogs on the planet, China banned the swill feeding of hogs and is building swine skyscrapers several stories high. Instead of eating food scraps, those pigs are now fed corn — corn that China won’t be able to access via Ukraine any time soon.

The bottom line is that a continuing conflict that inhibits Ukrainian farmers’ ability to plant and harvest means the price of corn and other commodities could explode. This will impact the pocketbook of every American already faced with staggering inflation.

As food becomes more expensive, geopolitical instability increases. Consumers in the Middle East and North African rely on Black Sea wheat exports and are some of the highest per capita consumers of bread in the world. The last time wheat prices dramatically increased, the world saw significant unrest named the Arab Spring. As poorer countries face a dramatic rise in food costs, instability will permeate different regions of the world. And here at home, our ability to combat hunger will diminish as inflation reduces how far the food dollar goes.

No matter who you are or where you live, the situation in Ukraine spells out higher grocery prices for everyone — especially the hungry and those that live in poverty. Certainly, its lingering effects will be felt by the SNAP, WIC and USAID food aid budgets.

That said, the strength and resilience of the Ukrainian people has inspired this nation and the world. We must continue to stand side by side with them and all their farmers who work each day to feed and fuel those around the globe.

Roger Marshall represents Kansas in the U.S. Senate and sits on the Senate Committee on Agriculture, Nutrition and Forestry. He co-authored this with Gregg Doud, Vice President of Global Situational Awareness & Chief Economist for Aimpoint Research and former U.S. Chief Agricultural Negotiator.

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