Impact of Ukrainian conflict on U.S. agriculture discussed at trade conference

RICHMOND, VA—Over a month has passed since Russia launched its invasion of Ukraine, and economists and counter-crisis experts suggest the economic and political ramifications are still taking shape.



The bulk of Russia’s military activity is occurring in Ukraine’s most agricultural regions, and is halting production. As a result, national corn production is expected to decrease by 37%, and

wheat production is projected to drop 40% from 2021.



American Farm Bureau Federation economist Veronica Nigh and former U.S. official Brett Bruen spoke about the Russia-Ukraine war March 29 at the Virginia Governor’s Conference on Agricultural Trade in Richmond. The annual conference is co-sponsored by Virginia Farm Bureau Federation, the Virginia Department of Agriculture and Consumer Services and the Virginia Tech Department of Agricultural and Applied Economics.


Bruen, former White House director of global engagement during the Obama administration, opened the discussion by addressing Russian President Vladimir Putin’s possible reasons for the invasion.


Bruen theorized two motives were at play—to create global division and destabilization.


He said the Russian invasion is a “challenge to the Old World order,” which centers on America serving as the “guarantor of stability and security” globally. Bruen also predicted that other world leaders may follow Putin’s lead in the future and challenge peacekeeping conventions, as well as break rules they find “no longer convenient.”


Such transgressions ultimately would cause turmoil to global markets similar to that seen in the wake of the Ukrainian conflict.


“I encourage all of you to step back with your teams and really look hard at what other vulnerabilities exist in your supply chain, in your sales,” Bruen advised. “Risk has gone regular … and you, your teams and your suppliers need to develop an agility and an adaptiveness to be able to move through the storms and amidst the uncertainty.”


Nigh spoke about the economic uncertainty that has been brought on by the ongoing war between two of the world’s largest grain-producing countries.


Russia and Ukraine combined grow nearly one-third of the world’s wheat supply, and Ukraine is the fourth-largest and seventh-largest exporter in the world for corn and soybeans, respectively.


Nigh explained the bulk of Russia’s military activity is occurring in Ukraine’s most agricultural regions, and is halting production. As a result, national corn production is expected to decrease by 37%, and wheat production is projected to drop 40% from 2021.


The decreased output—and Russia limiting exports to countries it has deemed unfriendly to its cause—is contributing to extreme volatility in global grain markets.


“Markets are trying to figure out how much product is going to be out there, when it’s going to be available, and they’re trying desperately to price wheat, corn and other products,” Nigh said.


“It’s all dependent on a calendar. Russian and Ukrainian wheat was sown last fall in September and October, and we’re looking at a harvest on a normal calendar of July and August. But a lot is going to happen between now and July and August.”


Nigh added that rising fertilizer costs also are affecting American farmers, noting that Russia is the world’s largest exporter of nitrogen and third-largest exporter of phosphate and potassium. The unavailability of these critical components are adding to already-elevated fertilizer costs in the U.S., thus adding to farmers’ input costs.


Those elevated input costs, Nigh concluded, are contributing to inflation on the cost of food, which is up 4.3% from the year-to-date average in 2021.



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