Russia & Food

The Lempert Report
April 13, 2022

Phil: Let's get back to today's insights and let's start with the effect that the war between Russia and the Ukraine are having on our global food supply. It's a mess, combined both nations make up approximately 28% of wheat, 24% of barley exports in 2019. The nations also represents 72% of sunflower seed or safflower oil exports, which is critical for snack food companies. So we might see some shortages or reformulations as it relates to that. And probably the most important part is that because of the war, what they're saying is there could be increases to 22 to 45% in wheat and barley and, and sunflower oil could go as high as 60%. And one of the problems we've got is not only, you know, Russia bombing out a lot of the farms but also a lot of the farm workers are now in the military in Ukraine. 

Phil: So they're not able to work on the farm and it just looks like, you know, every everything from, you know, crops and transportation and everything is a mess. Ukraine has already lost at least one and a half billion in grain exports. Since the war began there are stocks of grain and wheat and barley that in warehouses that they can't move, that they just, you know, the, the farming there is really important. And one thing I didn't know is that 70% of Ukraine is farmland and agricultural products. I never knew that. And it makes up 10% of its gross exports. So we, we really are very lucky. We don't import a lot from those two countries with the exception of the sunflower oil for snacks. But they, this is gonna have some long reaching efforts on our food supply and our prices it's expected by the UN world food program. David Beasley, who, you know, we've interviewed before came out with this statement. And David is saying that our prices in the us could go up 20% 

Sally: Incredible and you know, something I didn't, no, either I read about the sunflower oil is that they, that's also something that they use a lot in beauty products, so not a food product, but something else that we see in our retail stores a lot that will suffer the consequences of inflation on that ingredient. 

Phil: Yeah. I didn't know that. I didn't know that at all.