Grain prices are plateauing, ag leader tells western governors
Economists and grain industry experts are urging governors in western U.S. states to track supply chains and prepare farmers for more challenges as Russia’s war on Ukraine continues to affect global grain prices.
Speaking at the Western Governor’s Conference in Idaho this week, United Grain Corporation CEO Augusto Bassanini said an increase in grain prices earlier this spring triggered by Russia’s invasion of Ukraine has plateaued.
“We saw a tremendous spike in commodity prices, you know when the war started…saw a peak in mid-June, and then pretty much that 20% gain that we saw basically eroded over the last month," he said.
Ukraine produces about 10% of the world’s grain supply.
Russia’s invasion of Ukraine also caused fertilizer prices to skyrocket. Montana is one of the top five wheat producing states in the country, but many farmers chose to plant some grain alternatives like barley this spring because of fertilizer costs.
With inflation driving up the costs of necessary products like fertilizer and gas, many farmers face a lower cash flow, Bassanini said.
“From a cash flow standpoint, probably just make sure that instead of saying ‘I'm going to buy a new combine this year,' it's probably going to mean that it might have to wait a couple more years," he said. "These are trying times."
Bassanini also highlighted the importance of modernization and supply chain expansion to ensure that the U.S. grain market remains competitive with international production.