The longer the Russia-Ukraine war continues, the greater the likely shortfall in global grain production.
Former USDA Chief Economist Joe Glauber says planting is being prevented, ports and infrastructure areas destroyed and sanctions and export controls are impeding Russian exports.
“We’re going in very, very tight to begin with. And, again, if we’re actually talked about not a lot of wheat coming out of Russia, either, this is going to be very, very tight. Again, I think these countries, these big wheat importing countries are going to pay for wheat, we’re going to draw down world stocks…come out of 22/23, even tighter than we went in.”
The shortage is driving wheat, corn and oilseed prices sky-high, forcing poorer Middle East and North African countries to subsidize food prices. India has offered to export more wheat and producers in the US, Australia, Canada, Brazil and Argentina will respond to higher prices. But, Iowa Senator Chuck Grassley says there’s only so much they can do.
“I don’t know how you make up 14-percent of the exports, or the production globally, coming out of Ukraine, but it’s a sizeable amount to make up. And I guess, I figure farmers plant pretty much, corn row to corn row, anyway.”
And wheat is an even bigger problem, with Russia and Ukraine producing nearly 30% of world supply, which Grassley says, raises a huge concern of global hunger.
“Humanitarian groups, I read, have been very predictable of an increase in poverty, an increase in adequate nourishment, and so, people that follow world humanitarian food needs, are very worried.”
They’ll be even more concern if the war in Ukraine drags on, fertilizer prices rise more because of sanctions against Russian natural gas, or the droughts in the US, Canada and Argentina worsen.
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