Mar 1 2022
The Food Biz Ep 20 Recap: How Will The Russian Invasion of Ukraine Impact Food Supply?
In this week’s episode of The Food Biz, hosts Kristyn Tarpey and Ryan Nelson discuss how the Russian invasion of Ukraine will impact food supply chains.
Kristyn starts off the episode by explaining that together Russia and Ukraine account for roughly 30% of the global wheat market. With these two countries in conflict right now, it’s safe to say that we will see some dramatic shifts in wheat outputs and exports. Ryan believes higher input prices will result in higher food prices which will further exacerbate inflation in the United States.
Ryan adds that the Black Sea is a huge exporter of wheat. He explains that we are already seeing the impact in prices across the board. Some of the contracts are selling at the highest point that they have ever seen. The two conclude that this makes sense as the supply from Ukraine and Russia has been taken out of the equation.
Ukraine also provides a lot of wheat to nations outside of Europe, such as Northern Africa, and the middle east. In addition to wheat, Ryan explains that Ukraine supplies China with a large amount of corn. This puts China in an interesting position as siding against Ukraine would interrupt their corn supply.
They transition into a discussion about the US Equities Market. Over the course of the past 5 days, the DOW has dropped about 7%. However, commodities and ag futures are doing well.
Ryan believes with other underlying economic indicators, such as low unemployment, the DOW Jones Industrials Average will bounce back. He believes that fear is currently playing a part in the DOWs drop.
The two then discuss how the higher input costs as a result of the Russian invasion of Ukraine will cause higher oil prices, higher food prices, and higher transportation costs.
Kristyn adds that Russia has a massive energy sector and is an energy powerhouse. She states that “30% of all Russian gas supplies to Europe flow through Ukraine.” With such a large portion of natural gas flowing through these countries in conflict, all of Europe will feel the impact.
They finish off the episode by discussing how higher gas prices will further compound issues in the agriculture sector as well as the sanctions imposed by the US on Russia.
Make sure to listen to the entire episode on Spotify or in the Apple Podcasts App! While you’re there, don’t forget to subscribe. Also, feel free to reach out to us by email at email@example.com with any discussion topics, questions, comments, or overall feedback; Ryan and Kristyn would love to hear from you!