ROCHESTER, NY (WROC) — This week, international reports said the US is working on a new plan to get grain exports out of Ukraine following Russia’s attack on the city of Odessa. The strikes come just after the two countries agreed to allow the roughly 20 million tons of grain to leave that major Black Sea port.
Steven Carnovale teaches supply chain management at the Rochester Institute of Technology. He says in Ukraine, the grain harvest is still going to continue. But, if the current grain in the silos can’t leave, it will go to waste.
“There’s basically more of a humanitarian impact than anything,” he said.
Before Russia invaded, World Grain said Ukraine exported about six million tons of grain per month across the globe.
Now, that number has fallen to about one million tons, causing concerns. Carnovale said that could lead to cost hikes at home.
“I think you’ll probably see prince increases first in order to buffer against inevitable shortages that could happen down the road,” he said.
And companies making products that use grain — like bread or pastries — might raise prices even more to ready themselves for those increases.
Mark Greene with Hopkins Farms in Pittsford says U.S. farms, in theory, could increase production to offset the negative supply from Ukraine — but it’s not that easy.
“We could plant a few more acres possibly,” Greene said. “But we don’t harvest it until July of next year.”
And that doesn’t take into account a drought or other serious event that could potentially limit the U.S. supply.
Carnovale says that anytime there is a constriction of a global supply but the demand remains, the price goes up. And in an interdependent international marketplace, the discussion is about far more than agriculture right now, as many consumers have seen.
“Bread, grains, fuel, rubber, things of that nature,” Carnovale said. “Building products, potentially.”
When it comes to the new plan to get the wheat harvest out of Ukraine, the coming days will tell.
In addition to the United States and many European nations, countries like Somalia and Lebanon also rely heavily on Ukrainian wheat. Outside of wheat, Ukraine exports about 40 percent of the world’s supply of sunflower oil.