Russia Invasion Impacting Ukraine’s Crop Storage Capacity, While Black Sea Export Deal in Focus

Late last week, Bloomberg writer Courtney McBride reported that, “Russia has destroyed, damaged or seized control of 14% of Ukraine’s crop storage capacity since invading in February, jeopardizing the global food supply and threatening future harvests, a US government-backed report said Thursday.

“Researchers examined satellite images of 344 storage facilities — out of almost 1,400 nationwide — and concluded that Ukraine’s grain storage capacity fell to 49.8 million metric tons, down from a pre-war capacity of 58 million metric tons.

“Given Ukraine’s role as a key food supplier for both the global market and humanitarian agencies, that loss could have widespread and devastating effects, according to the researchers. They said future harvests could shrink because farmers may cut back on planting over fear they won’t have space to store their grain.”

Meanwhile, Jared Malsin and Georgi Kantchev reported in Saturday’s Wall Street Journal that, “Russian President Vladimir Putin renewed his threats to sink an international agreement to unblock Ukraine’s vital grain exports through the Black Sea, saying not enough grain was going to the world’s poor.”

The Journal writers noted that, “The comments came at a meeting with Turkey’s President Recep Tayyip Erdogan, who helped broker the deal along with the U.N. It was the first meeting between the two since Mr. Putin first threatened to abandon the deal last week, and followed a difficult week for the Russian leader that saw both China and India flag their concerns about the war as Russian forces lost territory to a Ukrainian offensive.”

“Speaking earlier on Friday during a summit in Uzbekistan of the Shanghai Cooperation Organization, an international organization dominated by Russia and China, Mr. Putin reiterated calls for Europe to drop what he described as restrictions on imports of Russian agricultural products,” the Journal article said.

Saturday’s article added that, “U.N. officials said this week they were working to resume Russia’s export of ammonia, a key ingredient in fertilizer, via a pipeline to Ukraine’s port of Odessa. The pipeline shut down after Russia launched its assault on Ukraine in February.”

Also with respect to the Black Sea export deal, Alistair MacDonald and Karolina Jeznach reported at The Wall Street Journal Online on Saturday that, “Some farmers in Europe want their governments to curb the flow of Ukrainian agricultural products into the region, showing how the consequences of measures to support Kyiv are testing solidarity.

“Russia’s invasion of Ukraine closed off the Black Sea ports through which almost all of the country’s bounteous grain harvests were exported. To support Ukraine, the European Union removed tariffs and quotas to allow exports via the bloc instead. Now, farmers in Poland, Romania, Bulgaria and France are protesting what they see as a flood of cheaper Ukrainian grain and poultry that pushes down local prices and competes for space at local ports.

A separate Reuters article yesterday by Pavel Polityuk indicated that,

A total of 165 ships with 3.7 million tonnes of agricultural products on board have left Ukraine under a deal brokered by the United Nations and Turkey to unblock Ukrainian sea ports, the Ukrainian infrastructure ministry said on Sunday.

“The ministry said 10 ships with 169,300 tonnes of agricultural products are due to leave Ukrainian Black Sea ports on Sunday.”

And today, Reuters writer Pavel Polityuk reported that, “Ukraine expects a 2022 grain crop of 50-52 million tonnes, unchanged from the previous estimate and down from 86 million tonnes last year, the agriculture ministry said on Monday.

“The ministry said it expects grain exports in September to total 5.4 million to 5.5 million tonnes, up from 4.5 million tonnes in August, Deputy Agriculture Minister Taras Vysotskyi told a news conference.”

More broadly regarding global agricultural production, Reuters writer Maximilian Heath reported last week that, “Argentine wheat farmers are starting to abandon some lots of wheat due to prolonged drought, the major Buenos Aires grains exchange warned on Thursday, a worry for the grains producing South American nation as growers grapple with a lack of rain.”

And in a related Reuters article last week, Maximilian Heath noted that, “Argentina’s main farming zones are facing the driest conditions in around 30 years, agricultural and weather experts said, raising fears about a new ‘great drought’ and stalling planting of corn in the world’s No. 3 exporter of the grain.”

In Sunday’s Washington Post, Karina Tsui reported that, ” The number of people experiencing extreme hunger has more than doubled in some of the countries most vulnerable to climate change, the charity group Oxfam International said in a new report.”

And in Sunday’s Los Angeles Times, Summer Lin reported that, “Michael Oosten’s grandparents were dairy farmers in the Netherlands and immigrated to California in the 1920s, starting their own dairy farm in Paramount in 1945 before relocating to bigger farms in Artesia and Bellflower.

“In the early 1970s, they moved their farm to Chino, but decided to sell it in 2001 to a trucking company next to an Amazon warehouse, which was built on land comprised of two other dairy farms.”

Sunday’s article noted that, “Oosten, who for 18 years has owned Marvo Holsteins — a dairy farm in the unincorporated Riverside County area of Lakeview that supplies milk to Land O’Lakes — said dairy farming has declined in California since the industry’s peak in 2008. The industry has been hurt by shrinking real estate in Southern California, more affordable land in other states, rigorous permitting processes and the shortage of water and other natural resources.

“‘Economics is the biggest driver of farmers leaving to go out of state,’ Oosten said. ‘Milk pricing tends to be very competitive in other states; the feed prices are lower and the regulatory environment is better.'”