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Russia’s Ukraine war boosts food prices in U.S., vexing farmers about planting more


Nicole Berg is a farmer who runs a 21,000-acre Washington farm. She believes that higher wheat prices will make her happy. However, fuel costs and fertilizer have impacted her profit.

Berg said that “the problem we are having now is that input prices are increasing even more than the cost of wheat.” He spoke to CNBC recently.

Berg is like other farmers constrained by disruptions in the supply chain that have continued to slow down orders for key equipment needed to harvest and plant.

We have to pay the deposit so that I get money out. But I cannot even get the funds. [no-till seed]Berg stated that drilling could continue until 2024, possibly to the Fall of 2024.”

On the earnings call last month, Deere & Co.According to them, the order books for large equipment are almost full.

Winter wheat has been planted by the end of 2021. However, spring wheat planting will begin in just a few weeks.

State farmers who produce spring wheat, such as Montana, Minnesota, North Dakota and North Dakota have to make a difficult decision. Do they want to plant more crop without knowing if prices will remain stable?

“What happens if Ukraine suddenly disappears?” But it doesn’t seem like this. [farmers]Scott Irwin is an agricultural economist from the University of Illinois.

While some countries, including, China have been boosting supplies of agriculture commodities, wheat production in the U.S. has been steadily declining in recent years — down 35% from its 2008 peak, according to the USDA.

Irwin said that in the event of a global crisis with potentially severe loss of wheat supply, “basically, the United States must draw down its reserves,”

The war in Ukraine and Russia has caused a disruption to wheat exports. One option for the U.S. is to consider India as a potential destination. But experts warn that this is unlikely due to high freight and transport costs.

There are no indications that the U.S. will run out of bread. This is in contrast to other parts of the Mideast where there has been a severe shortage of bread. However, inflationary fears are growing as the price of wheat-based products keeps rising.

RBC Capital analyst Nik Modi said General Mills, KelloggPlease see the following: MondelezThe wheat products they produce, such as cereals, are the ones with the greatest potential to gain.

Modi points out the fact that cereals are currently 10 to 15% less expensive than they were a year ago. Modi stated that bread prices have risen 10%.