Tensions with Russia, Ukraine and China could have large implications on US ag
A grain market analyst says Russia’s geopolitical chess match could be a mixed bag for American farmers.
Bill Biedermann with AgMarket.Net tells Brownfield tensions with Ukraine will impact corn and wheat exports from both countries. “The market is guessing that there is going to be an impact on shipping. Negative for them, positive for us. The cost of shipping would go up so much it would force demand over to our shores.”
He says for example Russia and Ukraine export about 30 percent of the wheat in the world. “If there is a problem over there and the shipping costs go up by a $1,000 a freight, it will shift demand over to other suppliers and hopefully it’s us and Canada.”
But, he says Russia’s new agreement with China could have the opposite effect because the Chinese have nearly 70 percent of the world’s corn in storage and 50 percent of the world’s wheat in storage. “They’re really prepared for a major problem to be a supplier to align themselves with new friends and make new friendships. Food makes friendships. This is a thing where it’s going to be interesting to see how this dynamic works out.”
Brownfield interviewed Biedermann at the AgMarket.Net meeting.
Bill Biedermann, AgMarket.Net: