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Russia-Ukraine conflict influencing wheat prices worldwide

Posted at 10:08 AM, Mar 11, 2022

BOZEMAN - Amidst the war in Ukraine, grain and barley prices have seen a dramatic spike.

Russia and Ukraine are large exporters of grain products, and with the ongoing war, there has already been noticeable volatility in the market. At the beginning of February, we observed wheat prices at $7.69, and today the price is $12.02.

“This conflict in Ukraine is making this market very volatile,” observed Living Sky Grains part-owner Franck Groeneweg.

While Montana wheat farmers may see the benefit of higher prices Groeneweg notes the factors that could balance the price of wheat for farmers. Fertilizer and gasoline cost is rising, along with wheat, and the weather could drastically impact the harvest.

“If we don’t get rain, then the price of wheat can be $100 a bushel, but if you have none to sell it won’t help a whole lot,” Groeneweg says, “It’s just an uneasy feeling because we don’t know where it’s going.”

Montana State University professor and researcher Vincent Smith has published opinion pieces on the Ukrainian crisis and its’ effect on the agriculture economy.

“We are at record cash prices for wheat, over the last 25 years if not longer,” Smith said, “Futures market suggests that there will be some moderation to more like the $10 range.”

A variety of factors may have contributed to this rise in price, such as workers leaving their farms to assist in Ukrainian efforts, and portions of fields that may have been destroyed by tanks and military vehicles.

“Who’s going to plant the seed? Who’s going to run the combine? How much winter wheat—that was planned in the fall—has been damaged,” Smith said.

Smith notes that the average price for a bushel of wheat is typically $5-to-$5.50, and if moderation brings the cost down to $10, that is still a stark difference.