Inside the Market

Ever since Russia's invasion of Ukraine began in February, I've found myself looking at things differently. What would I do if missiles rained down on Omaha, where I live? Where would we get food and the basic necessities?

Thankfully, I don't know of any farmers in the U.S. that needed to wear flak jackets or were concerned about mines buried in their fields. The farm has enough of its own hazards without getting extra help from Russian soldiers and Putin-hired mercenaries.

At the time of this writing, USDA is estimating the world will miss out on 591 million bushels (mb) of Ukraine's corn exports and 346 mb of wheat exports in 2022-23. The United Nations is highly concerned about the impact this will have on the world's poor, one of the reasons it pushed so hard to coax Russia to allow ships of grain to leave Ukraine.

There is no doubt Ukraine is one of the world's most important food-growing regions, but I couldn't help but wonder what things would be like if the American farmer fell under a similar attack.

A 41% cut in U.S. corn production, the amount USDA estimates for Ukraine in 2022-23, would cost the U.S. 5.90 billion bushels (bb), or 525 mb more than the amount needed to supply ethanol production. The 1.47 bb surplus USDA estimates for 2022-23 would quickly vanish. If wheat production were also cut on a similar scale to Ukraine, 729 mb of U.S. wheat would be lost, more than the 639 mb U.S. surplus USDA estimates for 2022-23.

The numbers may sound like sterile math at first, but think for a moment of all the related dominoes that would topple with corn and wheat losses that big. How would the producers of livestock and poultry feed their animals? Where would Walmart get its meat? Where would the extra fuel come from for our vehicles?

This is not meant to panic anyone, but I do think it's important to be aware that nearly 8 billion people on this planet largely depend on food grown from the world's most fertile regions. While Ukraine fights for its life and for the future of many who don't even live in Ukraine, the work of the American farmer has never been more important.

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