This week’s column is dedicated to agricultural news arising out of the unprovoked Russian invasion of democratic Ukraine. Our thoughts and prayers are with those innocent lives affected in this dark time of world history.
U.S., world farm commodities affected by ‘Putin’s War’
URBANA — The Russian invasion of Ukraine has, as predicted, caused great volatility in world grain markets, fertilizer supply and the agricultural economy. Among commodities, wheat prices and futures are deeply impacted. DTN reported on Friday, March 4, “The May Chicago wheat futures contract closed 41 percent higher than last week at $12.09, a record-breaking weekly gain that reflects global fears about wheat supplies and exports amid Ukraine and Russia’s war.”
“Prices are getting so high they just aren’t serving the physical markets,” DTN Lead Analyst Todd Hultman said, adding that until there is some resolution to or at least a better understanding of the situation in Ukraine, there is little that could change the market’s direction. “Fear has gripped the market in a big way.”
A reportedly “worst in history” quality wheat crop in China is also boosting wheat values, prompting many Canadian farmers to pledge more acreage in 2022. In addition, corn traded in Chicago has risen by nearly 10 percent since the Russian invasion, reported Commerzbank. Perhaps most alarming: the continued spike in the cost of agricultural fertilizers, most notably anhydrous ammonia. With Ukrainian-produced ammonia blocked from reaching European buyers, many countries that formerly bought their fertilizer from Ukraine are now purchasing Canadian-produced ammonia, spiking a huge demand curve in the U.S. and elsewhere.
“Russia’s efforts to halt fertilizer exports by domestic producers threatens to shock the global market and push prices of crop nutrients to new records, exacerbating food inflation around the world,” Bloomberg reported last Friday. (University of Illinois Farm Policy News)
Ukrainian farmer reports rural resilience
DECATUR — A handful of Corn Belt farmers and ag industry professionals were able to virtually meet with a Ukrainian farmer last week to hear how that nation’s ag sector is working together to defend their democracy against armed Russian invasion, while still producing food. In a Zoom call, Kohctahtuh Xomehko joined Loran Steinlage, an Iowa farmer and field engineer for DAWN Equipment, and Macon County Farm Bureau board member Paul Butler on the call.
DAWN provides ag equipment parts to farmers in the Ukraine, but pulled its employees out of the country just weeks before the war broke out, reported Illinois Farm Bureau correspondent Daniel Grant. “We’ll be planting, spraying and fertilizing,” Xomehko said when asked about his spring plans to grow crops. “But, there is no area in Ukraine that is 100 percent safe. We have areas with more bombs, and areas with less bombs.”
The Ukrainian farmer said he and his colleagues are helping their army by providing and transporting diesel fuel and crafting metal objects used by the Ukrainian army to flatten tires on Russian vehicles. Ukrainian farmers also plow a majority of their fields, which has made it difficult for some Russian tanks to cross without getting stuck, according to Xomehko.
“We’re together working — all the people in Ukraine,” he said. “I understand our army is not that big, but we’re very motivated. There are people you know who are dying. We’ll never forgive the Russians.”
How Putin’s war affects corn prices
WEST LAFAYETTE, IND. — Why did the invasion of Ukraine send U.S. corn trades 10 percent higher in the CBOT last week? Purdue University agricultural economists Jim Mintert and Nathanel Thompson tackled the subject last week:
“Some readers were likely surprised to learn that Ukraine is an important supplier of corn to the world. A bit of background is in order since it’s only in recent years that corn production in Ukraine increased to the point where shifts in Ukrainian production and exports began to impact corn prices.
“In the early 2000s corn acreage in Ukraine was quite small, ranging from about 3 million to just over 4 million acres. That started to change as the first decade of the 21st century came to a close and by 2010 corn Ukrainian corn producers were harvesting over 6 million acres of corn. Corn acreage continued to climb in recent years, approaching 8 million acres in 2021, more than doubling in two decades.
“At the same time that corn acreage was increasing, Ukrainian corn yields began to increase. National average yields that ranged from a little less than 50 bushels per acre to the high 60s in the early 2000’s first eclipsed the 100 bushels per acre barrier in 2011. USDA’s Foreign Agricultural Service estimated 2021’s average yield at 126 bushels per acre, 2.6 times the average yield in 2000, setting a new record. The combination of larger acreage and higher yields pushed Ukrainian corn production up from just 151 million bushels in 2000 to an estimated 1.653 billion bushels in 2021.” (Purdue University Commercial AgNews)
Ukrainian agricultural impact far-spread
BLOOMINGTON — “We are an agricultural breadbasket. We have more arable land than any other European country. We are the world’s top exporter of sunflower and sunflower oil. We are the world’s second largest producer of barley, its third largest producer of corn, and a global leader as a producer of potatoes,” says Ukrainian farmer Kornelis ‘Kees’ Huizinga, who is from the Netherlands but has lived and farmed in central Ukraine for 20 years.
“Ukraine can meet the food needs of 600 million people, according to one estimate. That’s pretty good for a nation of 44 million people and about 35,000 farms. If we drop out of the global market, food prices will rise everywhere. Price inflation is already hurting ordinary consumers around the world, but now it will worsen. This means that Russia’s unprovoked war on Ukraine is not only Ukraine’s problem, it’s a threat to everyone on the planet. Russia has attacked us all.
Will you stand with Ukraine in our moment of need?” Huizinga asked.
In a video posted to the Global Farm Network website on March 1, Huizinga said his wife and kids fled the family’s farm on Feb. 24 after Russian artillery shelling was heard and felt, seeking safety near the border with Romania. “I’ve stayed behind on the farm. They already made it into Romania and are staying at a friend’s place,” he said. “I’ve got a team to support and 200 cows to feed here.”
To view Huizinga’s video interview, visit globalfarmernetwork.org. (Illinois Farm Bureau)
Illinois Farm Fact:
More than 70 percent, or around 106 million acres, of Ukrainian territory is classified as agricultural land. Ukrainian land is exceptionally fertile and accounts for one-third of the world’s black soil. (USDA-AMS)