North Dakota grain prices impacted by the Ukraine and Russia war
NEW SALEM, N.D. (KFYR) - It’s harvest time across some parts of the Northern Hemisphere, and farmers are out cutting grain. The international grain market is still dealing with the impacts of the war between Ukraine and Russia.
At CHS Southwest Grain in New Salem, grain is falling, and so are Russian grain prices. Low costs and high yields in Russia can impact North Dakota producers like Travis Wilkens.
“Russia’s been the best seller right now of wheat because they’ve got to support their war effort by grain sales. And they’re trying to destroy Ukraine’s grain sales by bombing these facilities, their export capacity,” said Wilkens.
When Russia invaded Ukraine in 2022, the world market grain prices spiked. Some U.S. farmers sold grain during the peak, but now the prices have fallen.
“For us, our region, there’s really been no benefit. If anything, it’s led to lower prices over that period. And so, some of the studies showed that it probably dropped prices by 20 to 40 percent from their peak,” said Jim Peterson with the North Dakota Wheat Commission.
The conflict led the United Nations, Russia, Ukraine and Turkey to create the Black Sea Grain Initiative, or the “Grain Deal,” to protect shipments through the Black Sea to the world market.
Since then, the market has gone up and down, but now it’s more stable.
“It’s made it a little harder to export because they’re shipping wheat from the Black Sea so cheap. So the United States’ exports program on wheat has been a struggle to get buyers around the world to take the wheat,” said Craig Hort, CHS Southwest Grain manager.
If elevators like CHS can’t export their grain because of a competitive market, the elevator stays full and can’t buy more from farmers.
“It’s almost where Russia’s got to run out of grain before our exports pick up,” said Wilkens.
He says they are almost getting the same price they were years ago, and they’re still competing with markets like Australia, which have had good years.
The USDA reports record high yields for Russia’s wheat production for the 2022-2023 year at 92 million metric tons, up 22 percent from last year and 18 percent above the five-year average.
The yields are also dependent on weather, so it’s always a gamble for farmers.
The war makes market swings particularly unpredictable.
“So many farmers just have to take the best price that day, and unfortunately that’s when the lowest prices are. So it’s really hard to plan,” said Wilkens.
Peterson says until the war ends it’s still a concern, because any time there’s a bombing in a port, it can shift movements in the market.
In July, the Black Sea Initiative ended, but there are still food concerns across the world. So if market prices spike again there could be another effort to bring back the Black Sea Initiative.
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