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Indiana agriculture experts worried about Ukraine production, exports

By Kayan Tara

Posted February 24, 2022

An Indiana farmer plowing a wheat field.

An Indiana farmer plowing a wheat field. (Indiana Farm Bureau)

As Russian troops attack Ukraine, and allies of the United States respond with sanctions, the global economy is also threatened--including Indiana's agriculture industry.   

Sanctions could affect fertilizer supplies, a product important for Hoosier farmers. This interruption could hike up global prices just before the spring planting season.  

Bob White, director of national government relations for the Indiana Farm Bureau, noted several factors are making the prices of fertilizer and other products skyrocket in the United States. 

“What has happened in the United States is you have a supply shortage because with ammonia, specifically because you had a hurricane that came up the Mississippi River and a couple of the nitrogen producing plants had to shut down,” White said. “You've got a supply shortage because more guys planted corn last year than they did soybeans, which uses more nitrogen and fertilizer. It's kind of a supply chain backlash as well as a nature backlash as well as international trade dynamics.” 

Russia has been among the world’s leading exporters of barley and wheat. Together, Russia and Ukraine produce 29% of global wheat exports, 19% of global corn supplies, and 80% of global sunflower oil exports.  

A Ukrainian alignment with Russia would provide Russia added food security and mineral reserves. That would result in important changes to the global economy, said Ken Foster, professor of Agricultural Economics at Purdue University.  

While the risk of major disruption of Ukrainian agriculture or ammonia production and exports is there, Foster believes we should not panic yet. 

Agricultural Economic Insights' co-founder David Widmar said the uncertainty of production and exports more than anything else is creating tension in the agricultural industry.   

“I think the biggest implication for decision-makers is this uncertainty that it's going to add. And yes, there are upsides, but there are also those downsides,” Widmar said. “We got to keep an eye on both of those and not just let one side of this narrative get away from us.”  

Americans woke up Thursday to the news that Russia was attacking Ukraine. 

Purdue Agricultural Economics Professor Dominique van der Mensbrugghe said the threat of sanctions is more dire than any time the former Soviet Union attempted to invade another country.  

 “When Russia invaded Afghanistan, of course there were sanctions put upon the Soviet Union at the time. But at the time, the Soviet Union was not very integrated in the global economy,” van der Mensbrugghe said. “So, I think that's a really big shift now compared to what we saw in 1979. The global impacts of these sanctions could be much stronger this time around than they were back then.”  

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