Russia’s invasion fuels fear of US food price hikes

Russia’s invasion of Ukraine raises fears of a global food shortage that could drive up prices for American consumers and trigger a humanitarian crisis in the Middle East.

Ukrainian growers are struggling to grow and export their crops amid the war, and American farmers warn they may not be able to meet increased demand as the Russian invasion has driven up the price of crops. fertilizer and fuel.

Ukraine is the world’s largest exporter of sunflower oil, the fifth largest exporter of wheat and one of the main exporters of corn. Together, Russia and Ukraine account for 29% of global wheat sales and the bulk of wheat imports to Middle Eastern countries.

Commodity prices have soared since Russia launched its invasion, traders fearing that Russia’s attacks on Ukrainian infrastructure and the takeover of key ports could prevent Ukraine from exporting its crops for an extended period.

If the war rages and prices remain high, the cost of bread, cereal, pizza, pasta and other foods in the United States could skyrocket, hitting consumers again after grocery store prices rose 8.6% on the year, the largest annual increase in four decades. .

“Over the next few months, if Ukrainian farmers are unable to sow their crops as spring approaches, and we look forward to a whole year without a quarter of the world’s wheat supply, this is going to have an impact significant impact on prices,” said Robb MacKie, president and CEO of the American Bakers Association.

MacKie added that soaring prices for natural gas, the main fuel used to cook common food products, will also impact costs for American consumers. His trade group is pushing the Biden administration to avoid increasing biofuel mandates in a bid to boost the nation’s cooking oil supply.

In recent days, Ukraine has successfully exported relatively small amounts of grain by rail for the first time since the start of the conflict. But with Russia controlling the country’s southern ports, Ukraine remains cut off from the Black Sea, its main trade route.

Millions of people in Afghanistan, Lebanon, Iraq, Yemen and other Middle Eastern countries were already struggling with food insecurity before Russia’s invasion disrupted their main grain supplier. These countries, which are much more dependent on wheat-based foods than Western countries, struggle to access supplies and in some cases cannot afford to pay higher prices.

“The real impact of the war is going to be felt on countries that are hugely dependent on Black Sea trade and not rich enough to buy wheat at a high market,” said food analyst Alex Smith. and agriculture at the Revolutionary Institute. “Places like Yemen, that’s where the real human consequences are.”

At a press conference with NATO leaders last week, President Biden warned of “real” food shortages resulting from the Russian invasion and subsequent Western sanctions imposed on Russia. He announced his intention to work with the European Union to alleviate food shortages.

In a recent opinion piece, the senses. Jerry Moran (R-Kan.) and Sherrod Brown (D-Ohio) called on the Biden administration to buy American products and ship them to starving countries.

Farm groups have presented American farmers as the solution. Lobby groups representing farmers, bakers and oilseed processors sent a letter to Agriculture Secretary Tom Vilsack last week asking him to allow farmers to plant crops on currently unused land as part of the federal government’s conservation program.

“The United States should do all it can to feed a growing hungry population now threatened by a likely global production shortfall by reassessing unused vital productive acres here at home,” the groups wrote.

The White House also issued an optimistic note on Monday.

“We are a net exporter of many of these food products, and farmers respond to price signals. So with rising food prices, they will respond by planting more and trying to take advantage of the increased price signals,” Cecilia Rouse, chair of the White House Council of Economic Advisers, told reporters, adding that the United States would work. to deliver food to struggling nations.

Yet while higher wheat prices are encouraging U.S. farmers to plant more grain, they are limited in their ability to respond quickly to a global shortage.

Most farmers don’t plant wheat until autumn, and this year’s harvest has been plagued by drought. Farmers planting in the spring are unsure if current wheat prices are a mirage, as a quick resolution to the Russian-Ukrainian conflict would drive prices down.

Meanwhile, farmers are grappling with higher fuel, equipment and fertilizer costs. A recent report from the American Farm Bureau Federation found production costs are expected to rise 6% this year, making it difficult for many farmers to make a profit.

One of the biggest factors is the cost of fertilizers, which the study said is expected to increase by 12%. An index tracking the price of ammonia nitrogen fertilizer sold in Tampa, Florida, climbed 43 percent on Friday, hitting a record high.

Russia accounts for about a fifth of fertilizer exports and has actively blocked its fertilizer producers from sending products to Western countries. Farmers were already squeezed by pre-war Western sanctions imposed on Belarus, which is a major supplier of potash, a key ingredient in fertilizers.

The exorbitant prices could encourage farmers to use less fertilizer, which would likely lead to smaller harvests, further reducing the food supply.

“Fertilizers have doubled, even tripled,” said Nicole Berg, a Washington farmer who heads the National Wheat Growers Association. “In Oregon last year they even rationed fertilizer during planting season…and that was even before the war started.”

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