The ongoing threat of invasion into Ukraine by Russia is disrupting the wheat industry. Experts expect that prices for wheat will jump by at least a dollar per bushel. Currently, Russia and Ukraine together produce approximately 29% of the world’s wheat, a little less than a third. The United States, to give you some context, only produces around 6 to 7% of the world wheat. We do not import wheat from Russia, Ukraine, or the European Union, but in an interconnected world, if you take a producer that produces a third of the global supply out of the equation, everywhere will feel it.
And why should you care? Two reasons. The first, as it usually is, is money. Disruptions like this to the global supply of any given commodity are going to affect the price of said commodity. Higher demand amid lower supply will raise the price. That’s good for sellers, but not so good for buyers. Remember, wheat is the foundational ingredient for a whole host of products, and the cost required to obtain it will be transferred into the finished products.
The second reason you should care is because it should be clear by now that the products you buy in the grocery store and restaurants don’t just appear out of thin air. I think the greatest gift that this pandemic has given to the food industry, as well as most other industries, is the greater recognition and appreciation for how things get to where they need to go.
The global supply chain has been put on a stage for the whole world to see for the last two years and people have come to realize that disruptions to any one part of that chain can gum up the motor. Climate effects are getting more pronounced and already have hurt certain crops within the last 5 years, and are on track to hurt more as the years go on. And despite what some may posit, violence, although vastly decreased in the present day, is still not completely absent from the world. Indeed, there are signs that a whole new wave of conflict may be coming about. In a world that is so tightly knit together, it isn’t the case anymore that the United States is unaffected by what goes on outside of its borders.