Ukraine Warns of High Food Prices; Political Scientists are Studying the Economics of War
Ukraine’s new Agriculture Minister is sending out a warning about global food prices.
He spoke this morning and said he expects “quite a large harvest,” and hopes Ukraine will be able to ship grains eventually this year.
He also warned the war will mean higher prices for all countries, and farmers will have a difficult time finding fuel as they plant their spring crops.
There’s more potential for the war in Ukraine to have a negative effect on American agriculture and the farmers who grow our food.
University of Tennessee’s Institute of Agriculture’s Charles Denney spoke with experts about the economics of war.
A packed room at University of Tennessee’s Howard Baker Center for Public Policy – expert professors talking about this war.
Questions from the crowd – why is Russia doing this?
How long could this conflict last, and what can we do to help the people of Ukraine?
Other topics touched on here included how this war could create further economic hardships in our country.
“We just want to supply some information that’s more narrowly focused and give our perspectives as specialists in these fields. So, I’m a political scientist. We’ll be talking about the geopolitical angle of the conflict.”
“Ukraine and Russia are huge agricultural nations. These two countries supply about 30 percent of the world’s grain. As the war goes on, into the spring planting season, it will impact food prices and agriculture in other countries, including here in the US.”
“The big thing is just the uncertainty that this has created.”
Aaron Smith and Andrew Muhammad are with Agricultural and Resource Economics at UT’s Institute of Agriculture.
As they monitor the conflict, they’re watching the effect on commodity prices and input costs for our farmers.
In addition to growing crops, Russia is one of the world’s largest fertilizer producers.
“When you look at it from an agricultural standpoint, increased fuel prices during the spring planting season is another added cost to production. Obviously with their contribution to global fertilizer production out of Russia, that’s going to have some impacts.”
Muhammad says American farmers were already facing sky high fertilizer and fuel costs even before this invasion, and now particularly the potassium fertilizer supply could be a concern.
“Canada accounts for two-thirds of that, but Russia and Belarus accounts for about a third, or a little less. You can imagine those supplies drying up – what it’s going to further do to fertilizer prices. Not only did it make it worse. It almost makes it appear as if there’s no relief in sight.”
The war in Ukraine is heartbreaking and impactful.
There will be economic consequences for some time to come, in our home life, and on the farm.
Tennessee agriculture economists recommend farmers protect themselves with crop insurance and watch out for possible cyber attacks.