Despite the Russia-Ukraine conflict being thousands of miles away, the economic effects are being felt right here at home.
According to the Virginia Farm Bureau Federation, Russia’s invasion of Ukraine has had a ripple effect on global grain exports and production, oilseeds, fertilizer and petroleum.
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Virginia Farm Bureau Federation grain manager Robert Harper stated that more than 1 billion bushels of corn are typically exported from Ukraine, making it a top producer and exporter of the crop worldwide. However, due to the conflict, it’s unlikely that the crop will be planted this year.
“This is creating extreme volatility in the futures markets,” he explained.
In addition, the conflict is also impacting wheat production, according to Qu Dongyu, the director-general of the Food and Agriculture Organization of the United Nations. He noted that Russia is the world’s largest wheat exporter, with Ukraine being the fifth largest.
He said together, the two countries account for 19% of the world’s barley, 14% of wheat and 4% of corn, making up more than one-third of global cereal exports.
“Traders see that as 30% of the world’s wheat disappearing,” Harper said. “And the world is trying to figure out what we’ll do if we lose 30% of our wheat.”
According to Dr. Mark Alley, professor emeritus of crop and soil environmental sciences at Virginia Tech, the components of major fertilizers used in Virginia agriculture are being affected as well.
“Belarus and Russia are significant exporters of potash and nitrogen, and these are now off the world market,” said Alley, adding that fertilizer prices in the U.S. have increased as much as 200% from this time last year.
It’s something that Amelia County beef cattle, small grains and produce farmer Kenney Barnard has noticed for a while now—even before the Russia-Ukraine conflict.
He explained that in fall 2021 it cost $150 per acre when he fertilized his small grains, a $30 increase within just six weeks.
While farmers have certainly experienced drastic price increases prior to the Russia-Ukraine conflict, Barnard said he’s concerned now.
Barnard, who’s been farming since 1968, said increased input costs for fertilizer and fuel “are the highest I’ve ever seen.”