Uncertainty in Ukraine and labor shortages loom large over ag | TheFencePost.com
YOUR AD HERE »

Uncertainty in Ukraine and labor shortages loom large over ag

Headlines about the effects on agriculture resulting from Russia’s invasion of Ukraine, above all, shout uncertainty. Stephen Koontz, professor of agriculture economics at Colorado State University said prices for and production of corn, wheat and fertilizer will likely be affected. It’s left to be seen, he said, what the planted acres for corn will be.

Energy, he said, will likely have a greater impact on the beef industry than any other factors, with the exception of corn prices. Energy prices are driven greatly by the availability of labor and the reopening of the economy. Labor shortages that have rippled through nearly all sectors of business in the U.S. have also affected the energy sector.

“The cheapest place gas has been developed in recent years is Russia,” he said. “They have been selling to Europe, and I think Europe will rethink that and we’ll see some pretty high gas prices which will trickle over into all of the energy complex.”



With commodity prices high across the board, he said the effects will be felt for some time.

“The underlying fundamentals would support considerably lower prices, but it depends on the acres, the weather and it seems to me that all the risk that’s possibly out there is priced into corn, wheat and soybeans. That’s bad news for calves all the way around.”



Cory Bratland, chief grain strategist for Kluis Commodity Advisors, spoke to attendees at the Commodity Classic in New Orleans about the rising prices and trade outlook.

SUPPLY CHAINS AND UKRAINE EXPORTS

According to an article by Dave Kurns in Successful Farming, the ongoing conflict has driven more uncertainty across the globe — especially with supply chains and a halt in Ukrainian exports. Farmers’ sold crop is sitting in the country, unable to be shipped. According to Bratland, Ukraine produces 1.6 billion bushels of corn; 80% of that is exported but being held up.

Bratland though, said there could be opportunity in the situation for U.S., European and Australian farmers to meet the world’s demand for wheat.

According to Bratland, some analysts are worried that fuel diverted to the war effort may impact its availability for agriculture.

The trading volatility will continue, Bratland said and he recommends U.S. producers stay disciplined.

“We’re trading headlines. The markets take off in one direction — and they’re not small increments. The jump is in 20 cent, 30 cent increments. We still have great opportunities this year.”

Darrell Peel, Oklahoma State University Extension livestock marketing specialist said at this point, direct impacts of the conflict on global beef markets are relatively small. Russia is the ninth ranked beef importing country but only accounts for roughly 3 percent of global beef imports. However, global beef market flows may be impacted more depending on how various countries are affected by the conflict.

“Both Ukraine and Russia are major grain producing and exporting countries. With the reality of current disruptions of grain movement from the Black Sea region and the uncertainty of what could happen, crop prices have soared, pushing high feed prices much higher,” he said. “Just a few more weeks will determine whether crop planting in the Ukraine will be possible. All crop markets are higher, but the uncertainty is focused on the near term, pushing old crop futures higher relative to new crop contracts in the fall.”


[placeholder]


Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User