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When 26,500 tonnes of corn sailed out of the port of Odesa this week — the first agricultural export from Ukraine since Russia’s invasion — many food security experts breathed a sigh of relief. The news, combined with the falling cost of wheat after global prices had nearly doubled, has investors and policymakers wondering whether the threat of global food shortages is abating.
Not exactly. It’s too soon for unreserved optimism because many of the problems that fuelled food inflation even before the Ukraine invasion persist: Energy and agrochemicals prices remain high, making it costly to operate mechanised farms and move food through the supply chain. Scorching weather and drought are decimating farm yields from Waterloo, Canada, to Bangalore and Bordeaux, and climate disruptions are expected to get more varied and extreme.
When grain supplies from Russia and Ukraine – which together produce a quarter of the world’s wheat – were suddenly curtailed, farmers in major producing countries sprang into action.Credit:Robert Rough
It’s not too soon, though, to appreciate what we’ve learned over the past five months from one of the most significant food-supply disruptions the world has experienced in decades. Russia’s invasion of Ukraine forced global food producers, distributors and relief programs to quickly adapt to overcome the shortages – and they did so, on the whole, with great agility. That response has provided a deeper understanding of how food growers, investors and policy makers can meet the problems ahead.
Here are three key lessons from the Russia-Ukraine war about how to secure the future of a global food business:
Farmers are resilient
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When grain supplies from Russia and Ukraine – which together produce a quarter of the world’s wheat – were suddenly curtailed, farmers in major producing countries sprang into action. Tight supply and rising wheat prices encouraged farmers of other annual crops like soy and corn to pivot to wheat — and plant it they did, from the American Midwest and Brazil to Australia and Japan, restoring war-strained reserves.
We also learned the value of maintaining vast stores of grain from previous harvests, which were tapped in nearly every major producing country to fill the immediate void left by Russia and Ukraine.
These reserves must now be fully replenished, and in the meantime, we can acknowledge and appreciate the effectiveness of a double-whammy strategy of maintaining robust reserves while planting new acreage.