CoBank Quarterly: Adapting to Another Global Crisis
May 20 2022
Russia’s invasion of Ukraine roiled global grain trade and contributed to unprecedented price volatility in wheat, corn and soybeans during Q1. Grain markets could remain volatile for two or more years due to disruptions in planting, harvesting, input application and transportation.
USDA’s most recent Prospective Plantings report had bullish implications for corn and wheat, and a bearish surprise for soybeans. For only the third time in history, U.S. farmers are expected to plant more acres of soybeans than corn.
Prices for major fertilizers increased between 8% and 13% in Q1, with the biggest spikes coming after Russia invaded Ukraine. While most U.S. ag retailers have adequate nutrient supplies this spring, that may not be the case this fall and in spring 2023.
Russia, Ukraine and Belarus are usually major exporters of nitrogen, phosphate and potash fertilizers, as well as natural gas, the key feedstock for nitrogen fertilizers. Those supplies will remain threatened by production shutdowns and export restrictions and fertilizer prices will be elevated throughout 2022.