Impacts on U.S. Ag From War in Ukraine May Last Much Longer Than Expected
The economic impacts on U.S. agriculture from the war in Ukraine may last much longer than anticipated, according to Cortney Cowley, senior economist for the Federal Reserve Bank of Kansas City.
Cowley, who works out of the bank’s Regional Affairs Department, spoke at the Kansas Grain & Feed Association annual meeting on April 12 in Wichita, Kansas, stating that the situation must be thought of in terms of years, not months - even if the war was immediately resolved.
Cowley stated that even before the war, the ag industry was facing certain economic concerns. Now there’s talk about whether the U.S. can supply wheat and corn to fill the gap for Middle East and African buyers who typically bought from Russia and/or Ukraine, and the answer, she said, is questionable.
Even prior to the war, the bank district deployed a manufacturing and services survey for both food and farm equipment manufacturers in which participants were asked to name their top three risks. Two of the top three were labor shortages and supply chain disruptions - areas where Cowley said challenges will continue and even possibly worsen over time. In addition, these conditions will likely be compounded by supply constraints in the U.S. for wheat, for example, due to drought.
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