The Breadbasket of Europe Russia/Ukraine War Escalates Cost at the Store

© Vincent Mundy/Bloomberg News A combine harvester pumps freshly harvested grain into a truck in Chernihiv, Ukraine, in 2017.

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Russia’s invasion of Ukraine will likely ratchet American food prices even higher, experts say
  • Russia’s invasion of Ukraine could push U.S. food prices even higher, as the region is one of the world’s largest producers of wheat and some vegetable oils. And the disruptions could drag on for months or even years, as crop production in the area could be halted and take a long time to restart.
  • This week’s events “are proof that this will be a multiyear issue,” said Michael Swanson, Wells Fargo’s chief agricultural economist. “It’s my assumption that Ukrainian crops won’t get planted, or not anywhere near what they typically plant. And the Russian crops will be planted but will be embargoed in many markets. This is not something that will be resolved in weeks or months.”
  • “There will be a disruption; there is already a blockade on Black Sea ports,” she said. “In the near term this should have an impact on European Union wheat shipments, then it will have an impact on the U.S.”
  • Ukraine is the world’s fourth-largest exporter of both corn and wheat. It is also the world’s largest exporter of sunflower seed oil, an important component of the world’s vegetable oil supply. Together, Russia and Ukraine supply 29 percent of all wheat exports and 75 percent of global exports of sunflower oil, said Kelly Goughary, senior research analyst Gro-Intelligence, an agriculture data platform.

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