The benchmark U.S. price, at $11.07 a bushel, is 72% higher than a year earlier.
FOOD PRICES RISING IN THE US
The food price problems go beyond energy, fertilizer, and potash.
Food has been skyrocketing in the States. Most recently eggs are rising in price at grocery stores. The reason is a highly pathogenic avian influenza (HPAI) spreading across the US
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Bloomberg reports HPAI has been detected in commercial poultry operations, backyard farms, and wild flocks up and down the East Coast and across the Midwest since Jan. 26.
The problem has gotten so bad that, according to the Department of Agriculture, millions of chickens and turkeys have had to be culled at poultry farms around the country, Zero Hedge reports.
The result is an ever-increasing price of eggs.
WHEAT SHORTAGE
Further, with the Russian government choking off the “breadbasket of Europe” by attacking Ukraine, the price of grain and all food products dependent on grain or related to grain could also soon skyrocket dramatically.
In April 2021, a ton of wheat cost 165.43 Euros. As of March 2022, wheat cost 398.20 Euros. This trend will continue and intensify.
The main export countries of wheat by export value in 2020 were Russia (17.7 percent world market share), the USA (14.1 percent world market share), Canada (14.1 percent world market share), France (10.1 percent world market share), and Ukraine (8.0 percent world market share),” the report said.
Most American farmers aren’t in a position to take advantage of the current high prices because more than 80% of the season’s wheat has already been sold.
On December 18, 2021, the German Business News predicted in an article entitled “Risk Analysis: Major Inflation Unrest Will Begin in 2022” that the UN’s “Food Price Index” (FAO Food Price Index) will rise steadily. With that Could come global unrest.
SHORTAGE OF FERTILIZER AND POTASH
Wheat exports from Ukraine and Russia via the Black Sea have largely come to a standstill, according to Baywa.
After Russia began its military operation/war in Ukraine on Feb. 24, on that same day, Ukraine’s military halted all commercial activities at its ports in the Black Sea. Also that day, a missile struck a ship chartered by Cargill, according to Reuters.
“That region of the world is a pretty significant producer of key fertilizers or key components to fertilizer, so that is definitely on the minds of farmers,” said Garrett Hawkins, the Missouri Farm Bureau president.
Russia and Belarus (which is Russia’s closest ally and also faces international sanctions) make up more than 40% of the global potash market, according to The Fertilizer Institute.
Russia and Ukraine produce 30% of the world’s wheat.
The increasing prices have resulted in some farmers transitioning to soybeans and other crops that rely less on fertilizer, Reuters reported.
While the U.S. gets 86% of its potash from Canada, there will still likely be global disruptions. However, the extent of those disruptions is yet to be determined, as the U.S. won’t be importing products from Russia.
Several major agriculture companies based in the U.S. have operations in Ukraine.
Bob White, director of national government relations for Indiana Farm Bureau, said the conflict will likely cause a ripple effect in food prices that could eventually affect consumers.
“We import 80% of the fertilizer we use from outside the U.S. so the situation in eastern Europe will affect those supply chain issues around the world,” White said in a statement.
The EU makes enough wheat to sustain itself but 30% of the poorer countries face famine.
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