Food Concerns Growing Amid Ukraine War

As the war in Ukraine rages on, concern is growing about world food supplies.  Worst-case scenarios have a sky-is-falling feel to them, but unlike the fairy tale, such scenarios could play out, market analysts said.

Fears of shortages revolve around major agricultural exports of Ukraine and Russia and how their absences ripple across production and food supplies in other countries and hemispheres.  One only has to look at where these exports go to get a glimpse of how badly the perfect storm of COVID-related production issues, drought and war could hurt the global economy.




Ukraine is a very fertile area and grows exportable supplies of several grains.  Much of its wheat and corn exports go to the Middle East and Africa.

Russia also exports large volumes of grain, notably wheat and corn.  In addition, Russia also is a noted exporter of fertilizers, crude oil and natural gas.

A special report by Urner Barry said Russia and Ukraine combined account for nearly 30% of global wheat exports.

Fertilizer cuts by Russia, which began early this year because of COVID-related production problems likely will continue because of sanctions by other countries, its own production issues and growing internal demand.

The upshot is that sanctions against Russia and the war in Ukraine could combine to make significant inroads into exports by both countries.




One of the leading markets for Russia’s fertilizer is Brazil, a world agricultural giant and the world’s largest fertilizer importer, according to The Morning Brew.  The fertilizers are used to grow crops like soybeans.

Soybeans are a major Brazilian export item as are meats, a major consumer of the corn and soybeans Brazil’s farmers grow.

Brazil, in turn, sells a major portion of its soybean exports to China, which uses them to feed its own livestock.

So, lower fertilizer exports, yields higher fertilizer prices and lowered yield and production globally, which yields higher prices for crops, which means higher prices for importers and livestock and poultry growers, which yields higher prices and shortages for consumers, which often yields discontent and even riots, which makes political leaders very nervous.

Along the way, some, perhaps many, will have to do without, and it’s always the poorest who do without.

Wheat is a major import commodity for Egypt, which cannot grow enough to feed its population, and the ready supply of wheat for bread keeps the people from rioting in the streets.  It’s happened before.

“Let them buy American” may not work either since the contiguous 48 states and Canada were the victims of a major drought last year.




The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $139.78 to $139.90 per cwt, compared with last week’s range of $136.00 to $141.52.  FOB dressed steers and heifers went for $217.71 to $218.45 per cwt, versus $216.09 to $220.18.

The USDA choice cutout Monday was up $1.23 per cwt at $263.87, while select was up $4.18 at $256.32.  The choice/select spread narrowed to $7.55 from $10.50 with 54 loads of fabricated product and 16 loads of trimmings and grinds sold into the spot market.

The USDA reported that basis bids for corn from feeders in the Southern Plains were unchanged to up $0.10 at $1.45 to $1.455 a bushel over the May futures and for southwest Kansas were steady at $0.00 over May, which settled at $7.48 1/2 a bushel, down $0.05 1/2.

The CME Feeder Cattle Index for the seven days ended Friday was $155.11 per cwt up $0.29.  This compares with Monday’s Mar contract settlement of $156.10 per cwt, down $0.32 and Apr’s $160.82, down $0.75.