Grain Prices Soar to Highest in Six Decades, Spark Concern of Food Shortages
The Russian invasion of Ukraine has laid bare the world’s dependence on Russian President Vladimir Putin and its neighbor now under siege, including the fact that the two countries supply much of the grain needs around the globe and prices for grain are now the highest they have been in six decades.
Russia and Ukraine provide 29 percent of global wheat exports, 19 percent of global corn supplies, and 80 percent of the global sunflower oil exports.
“This reliance has many traders worried that any further military force could trigger a massive scramble by food importers to replace supplies normally sourced from the Black Sea region,” Fox Business reported. “Chicago futures for grain closing 41 percent higher than the previous week at $12.09. That jump marks the biggest gain over six decades. On Monday, the price closed up for the 6th consecutive day.”
And prices for fertilizer are already up almost 100 percent from this time last year. According to DOW Jones data, prices for nitrogen-based Urea are up almost 99 percent and 68 percent higher for diammonium phosphate.
Fox Business interviewed Ryck Suydam, a farmer who said he paid $17,000 to fertilize his 300-acre farm last year and that to fertilize just half of his average this year will cost $34,000.
“Some farmers are sitting out,” Suydam said. “They’ll say ‘Never mind, I’m not going to fertilize my fields this year. I know before I even plant a crop I’m going to lose money. Why am I doing it?’ They’ll let the fields go fallow.”
“Suydam said that to solve the fertilizer crunch, the U.S. needs to increase production of natural gas, which makes its byproduct, nitrogen, more affordable and readily available,” Fox News reported.
“We’ve got a lot of natural gas in this country,” Suydam said. “Open the gates, the pipeline, you’re sure to get more natural gas flowing, bring that price down and more fertilizer [will] be available.”
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