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Russia/Ukraine tensions growing focus of ag markets

An ag economist says ongoing tensions between Russia and Ukraine will remain a focus for ag markets.

David Widmar with Ag Economic Insights says because Ukraine is a large ag exporting country, it raises questions about overall production.  “How much might a conflict or a war or a regime change, impact future investments in the long-term, but also in the short-term,” he asks. “Ultimately if there is a battle that could decrease the amount of supplied that’s there, and increase the risk of agricultural production and in the trade system.”

He tells Brownfield global traders are also very closely monitoring the economic sanctions that have been proposed against Russia.  “It’d be very difficult for other countries just to buy goods or to do trade with Russia for sort of current things,” he says.  “And that could be related to agriculture. But, specifically, when we think about the European continent, they’re watching this for oil and energy.”

Widmar says the current volatility should serve as a reminder for producers to implement risk management strategies for their operations.  “Let’s not get too deep in the weeds trying to outguess what’s going to happen,” he says.  “Let’s just focus on getting base hits and making good decisions with all the information to be had the day and recognizing that a wide range of outcomes could happen to the global and US economy, and the ag economy in the next 18 months.”

Ukraine is the number three exporter in the world for wheat and the number four exporter of corn; the timing of this potential disruption comes as the world continues to recover from historic supply tightness in 2021.

AUDIO: David Widmar, Ag Economic Insights