Farm News: USDA Cuts World Wheat Estimate Over Russian Invasion of Ukraine

March 10, 2022

On March 9, the US Department of Agriculture reduced its projection for world wheat exports, subtracting 3.6 million tons from its original estimate of 206.7 million tons. Citing the recent Russian invasion of Ukraine, the USDA claims these recent geopolitical events have "significantly increased the uncertainty for agricultural supply and demand." On account of these predicted shifts, the agency now estimates a lessened total of 203.1 million tons to be produced around the world in 2021/2022. 

In addition to its announcement regarding international distribution, the USDA has indicated it now expects less wheat exports from Ukraine than it did at the beginning of the 2022, lowering its forecast from 24 million tons to 20 million tons. Russia, too, is expected to suffer a 3 million ton decrease in its own wheat exports, a negative byproduct of enlisting so many of its citizens to fight (over 75% of all Russian military forces have been deployed to Ukraine). 

The USDA has made no indication as to whether or not the US government will decide to increase its own wheat exports to help meet the swelling global demand. Recent increases in both Australian and Indian wheat exports will presumably help offset the effects of any Russian and/or Ukrainian wheat deficit, but not nearly enough to make a lasting impact on solving the economic crisis. 

Think of it this way:

Less wheat means more demand, which means higher prices, which means less demand in countries where people can't afford the increase in cost, which will mean, in the end, a decreased importation of wheat in these areas, inciting a deluge of other effects stemming from the shift in the economic value of wheat.  

This may not sound like much of a big deal for those of us in the West, but it is. Less wheat imports traveling to lower and mid-income nations will likely result in less jobs for the many thousands of mariners and tradespeople working in port cities dotting the coast of the Sea of Azov (more information on this here). Plus, it raises the likelihood that the Global Hunger Index will see yet another increase with lasting effects. Right now, wheat, corn, and sunflower seeds are trapped in Ukraine and will not be exported until the conflict resides or an alternate path for trade takes precedence. 

Note, also, these USDA estimates are based upon the current wheat crop, meaning they do not take into account the many dormant, currently underground winter crops, which may or may not be harvested come springtime. In the case that conflict persists at such a scale as it does now, most farmers will very likely remain unable to tend their fields, the majority of them expectedly still at war. Experts warn it is also "uncertain whether Ukraine and Russian farmers will have the fuel, seeds, fertilizer, and ability to actually plant the corn and sunflower crops this spring," detailing the array of obstacles Ukrainians, Russians, and the rest of the world stand to face in the coming months. 

One thing journalists can all agree on is the fact that "all of this is adding great uncertainty to the [agricultural] markets right now, especially the corn and cooking oil markets," not to mention the global wheat market, which plays one of the largest roles in feeding people around the world. 


Article by Local Roots contributor Jess Santoro // @jess_santoro

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