MANTUA, Ohio — Everyday life in much of Ukraine has ground to a halt. That's true in the devastated cities but also across the vast countryside and fields that produce enough agricultural products to earn the country the nickname the "breadbasket of Europe."
Those farmers famously seen on Twitter pulling tanks with their tractors are not tending to fields, not planting crops and that's the soon-to-be-felt impact of this war.
"I think this is probably one of the biggest global shocks we've seen to world commodity markets, certainly in the last 50 years,” said Dr. Ian Sheldon, Andersons Chair of Agricultural Marketing, Trade and Policy at The Ohio State University.
Ukraine has been one of the largest suppliers of corn to China; while Russia and Ukraine account for 29% of global wheat production, 31% of barley, "and of course, Russia and Ukraine supply what, 75% of the world's sunflower oil, so that's having knock-on effects into the vegetable oil market. So yes I think it's a very big shock,” Sheldon told News 5.
You might think this would be great news for Ohio farmers who will see prices for their main products of corn, soybean and wheat at or near record levels, but the war in Ukraine plus ongoing inflation and continued supply chain issues are also impacting their bottom line.
"Our inflation this year is 78% over what it was last year,” said Portage County Farmer Chuck Sayre. He says they’re being hit from several different angles, but a big factor is the skyrocketing cost of diesel fuel.
"When we order a tanker load of diesel fuel it was $8,000 before, now it's $40,000," he said. And during the upcoming spring planting season, they'll go through a tanker load of diesel a week.
"A large tractor like this one behind me — it will cost us an extra $1,000 a day just in fuel over what it did last year," he said.
On top of that, a lot of fertilizers are petroleum-based, hiking their costs, and one of the world's largest suppliers of fertilizers just happens to be Russia, so they'll be less available. Weedkiller, he says, is a whole other issue.
“Roundup has quadrupled in price, if you can get it. The problem is if you bought say 100% of your Roundup last year, China has now allocated the U.S. to, at best, 65% of what we were able to buy last year. So if you bought a gallon of Roundup last year, you can now get three quarts this year. That's all you're going to get,” he said. “Now we have to use other products that are more expensive.”
“A pallet of chemicals that we'll treat the ground with went from $4,000 to $28,000. Then we can only get two-thirds of that pallet,” he said.
As a result, at a time when American farmers will be needed to produce more, they actually might end up planting less without the ability to fertilize and protect their crops.
"Which brings your yields down, and as your yields come down your input costs have gone up the balance starts to tip very quickly," he said.
All of this is something consumers will see reflected down the road in their supermarket bill, he said.
“When you go to the store now you're seeing what happened eight months ago,” said Sayre. “The bread prices, the milk prices, that's what happened eight months ago. For us now when these input costs go up, when our 78% inflation hits us we have to pass that on, so as we pass that on, the producers will take our material this fall as we harvest, they'll take the material in, they'll process it, it'll become your food for next spring. That's when your inflation will hit. Food is going to be much more expensive next spring.”
That’s why Sheldon at Ohio State believes that while the world cuts down on Russia with sanctions, they’re likely not to touch food.
“We haven't put sanctions on exports from Russia because I think Europe and the U.S. are pretty cognizant of the fact that if we push up food prices much higher, in particularly in the Middle East and North Africa, there's a lot of evidence that you get a huge amount of social and political instability in those countries, particularly in countries like Egypt, Morocco, Algeria, Tunisia," Sheldon said.
Beyond all this, he said, is the traditional unknown facing every farmer who has ever planted a seed.
“We never know what the weather's going to look like," Sheldon said.
