Conflict in Ukraine hurts Minnesota farmers

MINNESOTA – Higher prices for fertilizer, fuel and wheat are some of the ramifications for local farmers of Russia’s invasion of Ukraine – long called the breadbasket of Russia.

Together, Ukraine and Russia supply 30% of the global wheat supply, according to the International Institute for Sustainable Development, a Canada-based think tank.

Sanctions against Russia and uncertainty about Ukraine’s ability to export grains and plant new crops have raised concern about wheat supplies and driven up costs.

Close to home, Pro-Ag Farmers Cooperative in Parkers Prairie is paying $10.23 per bushel for wheat contracts, about double last year’s price, said General Manager Jim Hlatky.

Still, the higher prices are not appearing to convince many Minnesota farmers to plant more wheat this year.

“Corn and soybeans are more profitable,” Hlatky said. “And they’re not set up with equipment for wheat.”

He said he has seen about a 5% bump in demand for wheat seed. The numbers still work in favor of corn, simply because corn produces so many more bushels to the acre than wheat, Hlatky said.

Also, wheat is a “fussy crop,” he said, much more sensitive to weather than corn and less reliable.

“Wheat is like getting together with your ex-wife on Sunday,” he said. “It’s not a lot of fun.”

Charlie Vogel, chief executive officer for the Minnesota Association of Wheat Growers, also said he expects the number of wheat acres to stay steady at home.

“Price is way up, but so are inputs and competing commodities,” he said. “Fertility, carryover, and crop rotations will encourage status quo.”

Wheat prices have dropped in recent weeks, and Jim Falk, who sells seed to local coops, said corn and soybeans will continue to dominate local crops.

“Farmers are pretty stuck in that pattern,” he said. “I’m not seeing a lot of people switching right now. I think there was more interest a week ago when the wheat market shot up a bit, but then it came back down.”

Potash provides potassium to crops, which is one of the three key macronutrients along with nitrogen and phosphorus.

In Minnesota, fertilizer generally uses Canadian potash, Hlatky said. However, U.S. coastal states generally get their fertilizer from Russia or its ally, Belarus. If the coastal states increasingly turn to Canada for potash, that could drive fertilizer prices up still further.

Fertilizer prices have already skyrocketed, said Hlatky. It is one of the farming supplies Pro-Ag sells, and prices have jumped by 40-50%, or about $250 to $300 more a ton, he said.

Fertilizer is generally ordered months in advance, so the higher costs will generally affect next year’s crop, he said.

Minnesota Agriculture Commissioner Thom Petersen said with artificial fertilizer prices rising, Minnesota farmers have been more interested in using manure from cattle and hog farms.

Manure is a good natural fertilizer, although it can be more difficult to apply, he said.

Still, “Hog farmers are saying it’s a hot commodity,” he said.

The price of gasoline and diesel has risen globally, and experts cite multiple reasons, including OPEC controlling supplies and increased demand for fuel as pandemic numbers dwindle.

However, one key reason for higher prices is Russia’s invasion of Ukraine, and the U.S. stopping imports of Russian oil.

Fuel is a big expense for farmers, who need to fuel up every time they send a plow across a field. They also use fuel to dry grains and haul crops.

A farm that uses 100 gallons of diesel fuel a day will spend about $1 to $1.50 more per gallon than a year ago, so about $100 to $150 more per day.