Can North America Fill Grain Gap?

Corn Combine

The spring planting season is coming up fast and as the Ukraine-Russia conflict drags on, global grain traders are concerned. Grain inventories are low following severe weather events during last year’s growing season. North America’s western grain belt, the steppes of Russia, Germany and other regions produced smaller crops last year due to bad weather.

If the Ukraine-Russia conflict drags on, a global food researcher and distribution analyst in Nova Scotia says North America will be under severe to fill the essential grain gap. Dr. Sylvain Charlebois at Dalhousie University’s Agri-Food Lab says that, based on the current situation, grain traders are market factoring just 25% of a normal crop-harvest from Ukraine this fall.

“The Ukraine, we would be surprised if they produce 25 percent of the crops they would normally produce. 25 percent, that’s not a lot. Ukraine is the breadbasket of Europe, but also of the Middle East and Northern Africa. So, all eyes are on North America to produce more grains this year. We’re hoping the North American market will be able to produce more grains, but it’s highly unlikely that production will cover gaps. There is going to be a deficit for many commodities including wheat, corn, barley and others.”

Canada’s prairies are one of the world’s major grain producers. But Sylvain Charlebois says farmers in Canada’s west have concerns going into this year’s planting season. Russia, a major fertilizer exporter, has cut shipments and prairie farmers are struggling to fill their fertilizer needs. “Canada, 50 percent of fertilizers used out west are either from that region, or China. And a lot of people have been desperate to get fertilizers. In fact over the last six months it’s been difficult because of supply-chain problems, so fertilizer prices have gone up significantly as well. So, we are expecting many farmers in North America to utilize less fertilizer just because of the fact it’s more expensive and less accessible.”

So, the question going into the 2022 growing season is: can North American farmers grow the world out of a potential upcoming global grain shortage? Dr. Sylvain Charlebois says that will be a real challenge when current grain inventories are already low.

“You can, perhaps, grow your way out of a problem if you have the proper fertilizers, and if mother nature cooperates. Those are big ifs. So, we know what’s going on with fertilizers. The other wild-card is the weather. Last year crops in North America, Russia and in Germany were a disaster because we had droughts and flooding. And that’s why inventories are so low this year.”