The war in Ukraine is already having an effect on Indiana farmers, which means your grocery bill could be next.
Fertilizer prices have more than tripled since last summer. That’s partly due to Hurricane Ida, which shut down two fertilizer plants in Mississippi. But three of the world’s biggest exporters of nitrogen and potash-based fertilizers are Russia, Ukraine and Belarus. The disruptions caused by the war, including the closing of Ukrainian ports under assault, has reduced the world supply.
Bob White, the Indiana Farm Bureau’s director of national government relations, says three-quarters of Hoosier farmers’ potash fertilizer comes from Canada, but Russia and Belarus account for about 14-percent. He says farmers are relatively confident they’ll be able to get what they need this year, but at the cost of some of their profit margin for the year. And he says there’s rising anxiety over next year.
White says farmers are facing “total chaos” in their supply chains, from a one-two-three punch of COVID, the hurricane, and now the war. And he says the measurable disruptions are multiplied by the unease which accompanies any market uncertainty.
Russia and Ukraine are an even bigger part of the corn and wheat market, accounting for a third of the world’s wheat and a fifth of the corn. Their exports go mainly to Europe and Africa, but cutting off that supply will drive prices for American grain higher. That may help farmers’ bottom line, but will drive grocery prices higher, though White says how much is uncertain.
White says American farmers had to make planting decisions months ago, and can’t easily fill the void of what’s lost to the war.
And White says potential shortages of yet another major Ukrainian export, sunflower oil, will force food companies to either find alternatives or deal with rising costs there as well.