Illinois farmers speculate in a volatile global market

When Dennis Green was a young, beginning farmer in southern Illinois in the 1970s, he didn’t think much of the Soviet Union as a player in global agriculture.

“Russia, Ukraine and some other countries were still part of the Soviet Union. In the 1970s they couldn’t grow enough wheat for their own people,” Green said. “We never thought that a war like the one we are having right now would impact global markets”

Russia and Ukraine are major contributors to the world wheat market. Russia’s invasion of Ukraine this spring rocked global markets, causing shortages, creating uncertainty and driving up US wheat prices.

Come harvest time in June and July, market watchers expect Illinois wheat prices to reach record highs.

Prices have skyrocketed, as have the costs of fertilizing American crops.

According to data from the Fertilizer Institute, Russia is the world’s largest fertilizer exporter, producing 23% of ammonia exports, 14% of urea exports, 10% of processed phosphate exports and 21% 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 piling up on Ukraine’s borders this winter, high natural gas prices had driven up the cost of fertilizers and other inputs that American farmers depend on.

Western sanctions against Russia have disrupted fertilizer shipments and increased shortages, pushing 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 was too early for him to decide.

“The factor that will determine what happens there is what the price of wheat will look like in the fall,” Green said.

After corn and soybeans 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 grown in Illinois is primarily sold to US mills for use in making cookies, pretzels, pastries and flatbreads. It is not used for bread and pasta.

The United States Department of Agriculture has predicted that the United States will produce 1.28 billion bushels of wheat this year.

“Soft wheat production — what we produce east of the Mississippi in the Midwest — is less than one-sixth of the total wheat grown in this country,” Green said.

Green, who farms in Lawrenceville near the Indiana border, will consider the timing of his soybean harvest, weather conditions at planting time and the price of wheat this fall before deciding how much wheat to plant. ‘it will crash this year,’ he said.

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