(The Center Square) – When Dennis Green was a young farmer starting out in southern Illinois in the 1970s, he did not give a lot of thought to the Soviet Union as a player in world agriculture.
“Russia and Ukraine and some other countries were still part of the Soviet Union. In the 1970s, they could not raise enough wheat for their own people,” Green told The Center Square. “We would never have thought that a war like we have going on right now would be something that would have an impact on world markets”
Russia and Ukraine are large contributors to the world wheat market. The invasion of Ukraine by Russia this spring has rocked global markets, causing shortages, creating uncertainty, and driving up prices for U.S. wheat.
At harvest time in June and July, market watchers expect Illinois wheat prices will hit record highs.
Prices have soared and so have the costs of fertilizing U.S. crops.
According to data from the Fertilizer Institute, Russia is the biggest exporter of fertilizers in the world, producing 23% of ammonia exports, 14% of urea exports, 10% of processed phosphate exports and 21% of potash exports.
Russia is also a major exporter of natural gas, which is used in the manufacture of nitrogen fertilizers. Even before Russian troops began building up on the Ukrainian borders this winter, high natural gas prices had been driving up the cost of fertilizers and other inputs that U.S. farmers depend on.
Western sanctions on Russia have disrupted fertilizer shipments and increased shortages, driving input costs even higher than they were last fall.
So, should Illinois wheat farmers increase the amount of wheat they plant in the fall? Green said it is too soon for him to decide.
“The factor that will determine what happens there is what the price of wheat looks like come fall,” Green said.
After the corn and soybean crops are harvested, Illinois wheat is planted to overwinter in the same soil where the corn and soybeans were grown.
The soft red winter wheat variety that is grown in Illinois is primarily sold to U.S. factories to be used to make cookies, pretzels, baked goods and flatbreads. It is not used for bread and pasta.
The U.S. Department of Agriculture has predicted that the U.S. will produce 1.28 billion bushels of wheat this year.
“The soft wheat production – what we produce east of the Mississippi in the Midwest – is less than one-sixth of the total wheat that is grown in this country,” Green said.
Green, who farms in Lawrenceville, Illinois, near the Indiana border, will factor in the timing of his soybean harvest, the weather conditions at planting time and the price of wheat this fall before he decides how much wheat he will plant this year, he said.