The pandemic was already raising food prices.
Today, Russia’s war in Ukraine-the two top wheat producers and the region known as the European breadbasket-has soared wheat prices, increasing the risk of serious food shortages and hunger in some parts of the world. In the United States, food prices could rise further.
Instability has caused many US farmers, especially those in the western part of the drought, to vie for rising costs for fuels, fertilizers and other key agricultural components.
The Ukrainian government has banned the export of wheat and other staple foods this week.
In a Facebook post, Ukraine’s Minister of Agriculture and Food Policy, Roman Reschenko, said it was necessary to “meet the needs of people with critical food” and prevent humanitarian crises.
Ukraine and Russia together make up about 30% of the world’s wheat exports, said Mark Welch, a professor of agricultural economics at Texas A & M University.
Therefore, in order for the Ukrainian government to restrict exports, “point out how serious the situation is,” Welch said.
According to a recent report from the Food and Agriculture Organization of the United Nations, 720 to 8.11 million people faced hunger in 2020.
According to the United Nations, global food prices, which have already skyrocketed due to the pandemic, reached record highs in February, rising about 2.1%. Wheat is a global commodity, and war-related shortages have made prices even more volatile. The state exports about half of its wheat supply.
“At home, the situation will be even worse globally for countries that are heavily dependent on grain imports in terms of food inflation and food price pressures,” Welch said.
According to the International Grain Council, countries in the Middle East, North Africa and Asia are heavily dependent on imports from Ukraine and Russia. About one-third of Ukraine’s total wheat exports go to Egypt, Indonesia and Bangladesh.
In some countries, such as Australia and India, there is a banner year for wheat production, which could help stop the global impact of the war in Ukraine.
“We have the opportunity to shift trade flows and sources that are not normally thought of, and spend time seeing how long and serious this conflict is, or whether it will grow. I can do it. ”
The effects of the war, and the rapidly changing markets, are turning the heads of US wheat farmers.
“It’s a kind of shock to the grain system,” said Mike Kirstensen, a dry-land wheat farmer in Washington. “Not everything is rosy on the farm.”
Prices have risen significantly since the beginning of the conflict, but so have the costs of fuels, fertilizers, herbicides and pesticides.
“The cost of our inputs is also crazy, part of which is the energy component of this conflict area,” says Carstensen.
Sanctions against Russia have raised oil and gas prices. This increases the cost of driving tractors in the field and transporting wheat to major markets by truck or barge common in the Pacific Northwest.