IA Senator Says Farmers Are Feeling Tensions In Russia, Ukraine

According to Iowa Senator Chuck Grassley, farmers in the US are already facing impacts from the Russia-Ukraine conflicts.

The costs of oil are having a big impact on this he said in a report by American Ag Network. According to Grassley, farmers could be seeing prices of oil reaching over $100 per barrel. And raising oil prices play a role in what we are seeing with fertilizer prices.

In an article by Michigan Ag Today, Steve Nicholson, a global sector strategist of grains and oilseeds with Rabo AgriFinance says the uncertainty in grain prices can translate to our grains markets.

“As we know, markets don’t like uncertainty. When they see something like this, they get extremely volatile, and they’re trying to do everything they can—in this case right now—[to] preserve supply. My concern is if this gets escalated further—I’m not sure how to describe that right now—markets will get really cranked up,” said Nicholson.

So whether there is an invasion or a diplomatic action, markets will still have the potential to fall even more.

“At the same time, if there isn’t an invasion, I think there’ll be a setback as well because it could trigger a bit of an economic setback as countries would fall into recession, currencies collapse—which I think is a very real possibility—then you see markets collapse as well or at least step back pretty significantly because they’re again uncertain about the demand side coming forward, and then uncertain about the supply as well,” said Nicholson. “I think you have to be ready for both the upside and the downside on the buy-side.”

But with this uncertainty, there is still a chance for opportunity. U.S. wheat growers could pick up business.

“If you’re a buyer of wheat and you’ve had a vessel or you’ve just gotten a vessel loaded, your vessel is sitting there not only costs you money but delaying this shipment. I think people are going to come to Australia, they’ll come to Argentina, they’ll come to the U.S. or come to Europe looking for wheat because we have the ability to ship it, and we have the stocks,” said Nicholson.