Russia’s decision to invade Ukraine put two countries in a shooting war that compete with Washington wheat growers on a global market.
As a result, prices moved higher in Thursday trading. Soft white wheat sold at $10.90 a bushel in Portland, said Glen Squires, CEO of the Washington Grain Commission.
“Russia is the No. 1 exporter of wheat in the world,” Squires said. “Ukraine is a big exporter as well. How this will affect shipments out of the Black Sea, I don’t know. But it looks like prices are responding because of that.”
Washington growers are still suffering from the worst production year since 1964 because of hot, dry conditions. This winter provided some snow early, but recent cold temperatures could hamper winter wheat, which was planted late last summer or early fall.
Michelle Hennings, executive director of the Washington Association of Wheat Growers, said farmers welcome the higher prices, but noted they are worried about the higher cost of diesel and fertilizers.
For instance, one common herbicide used to control weeds in wheat had been selling for about $18 a gallon and now it costs about $60 for the same product.
“Our big concern is input costs,” Hennings said. “They are talking that prices could go even higher. But we are in a no-win situation. Fertilizer and chemical costs are through the roof, too.”
Squires said markets generally react to bad news by pushing commodity prices higher.
“China agreed to take Russia’s wheat, recently,” he said. “That obviously would be a negative if China stopped taking wheat from other sources, including the U.S.”
With planting a few weeks away, several things may occur during the growing season that could affect how much farmers get paid for their crop.
“It’s a little early to be speculating,” Squires said. “If there is a shock to the world supply system of grain, that creates volatility, and (Ukraine crisis) certainly is a big one.”
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