Despite Robust Crops, US Farmers Cannot Sell Wheat Which Could Inflate Food Prices Further

Harvesting machine approaching with the foreground of golden wheat.
jodie777 / Getty Images/iStockphoto

The U.S. wheat market has been turned upside down by Russia’s invasion of Ukraine, with wheat futures soaring so high so fast that many buyers are backing off, leaving farmers with a diminished market even though they have plenty of crops to sell. Meanwhile, a shortage of fertilizer threatens future crops.

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Local wheat prices rose about 30% to nearly $12 a bushel in some U.S. farming communities following Russia’s invasion — the highest in decades, Reuters reported. Prices climbed so quickly that many customers along the supply chain — including local farm cooperatives, grain elevators, flour millers and exporters — stopped buying crops because they weren’t sure they could resell them for a profit.

Other buyers got spooked by upheavals in normal hedging strategies. For now, many are delaying purchases until more is known about how the Russia-Ukraine conflict will play out. Russia is the world’s leading wheat exporter, while Ukraine is a top supplier of both wheat and corn.

“More than anything, the market is just in a panic,” Andrew Jackson, a Kentucky grain merchandiser, told Reuters.

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This in turn has created a sense of panic for many American wheat farmers who have plenty of crops to sell but not enough buyers.

The problem has been complicated further by worries of a fertilizer supply shortage. Russia is a major supplier of fertilizer to the world — and it is no longer selling to the West, Fox Business reported. Of the estimated $10.3 billion worth of crop fertilizer, the United States imported in 2021, about one-tenth came from Russia.

Russia’s fertilizer ban to the West is slated to last until the end of 2022, which will squeeze an already tight supply. But the greater concern for many farmers is how the ban will impact future supplies and prices.

See: Food Prices To Rise Again As Russia Conflict Further Reduces Fertilizer Supplies
Find: Global Food Prices Reach All-Time High in February, Spurred in Part by Russia-Ukraine War

“If things don’t settle down and suppliers don’t want to purchase from Russia for 2023, that could put a real tight squeeze on the fertilizer market — even next year make it even worse,” Mike Gunderson, a wheat, soybeans and corn farmer in northwest Minnesota, told Fox Business.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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