Russia Invades Ukraine 2022

[Ken]

Wheat, fertilizer and oil are important. But the US is an exporter of all of those things so Russian wheat, fertilizer, and oil are frankly not important to us. They are, however very important to China. Who is likely to come out the big winner from all of this.

Tell me you don't understand global trade without telling me you don't understand global trade...

If Russian wheat and oil exports decline then American oil and grain producers benefit. 2022 is likely going to be a VERY good year for American wheat and corn farmers. Who probably need a break after Trump's unsuccessful trade war with China.

[Josh]

Wheat, fertilizer and oil are important. But the US is an exporter of all of those things so Russian wheat, fertilizer, and oil are frankly not important to us. They are, however very important to China. Who is likely to come out the big winner from all of this.

Is the U.S. a net importer or exporter of precursors necessary to make modern fertilisers?

Keep in mind that the countries that want to keep global capitalism going are India, Brazil, China - they are not signing up to this global suicide pact to basically halt global trade. They're going to be some of the big winners here (as will Russia) whilst America and the E.U. end up paying out the nose for energy and food.

Destabilising food prices will have disasterous consequences particularly when it means Russia and the rest of the Russia-aligned world (which is basically everyone who isn't America or the EU plus a few joke sideshows like Chile) will get to take advantage of political unrest to achieve its own political goals. This is exactly what the West did in the 2010s with the Arab Spring which was launched by higher wheat prices from a failed Russian harvest.

[Josh]

If Russian wheat and oil exports decline then American oil and grain producers benefit. 2022 is likely going to be a VERY good year for American wheat and corn farmers. Who probably need a break after Trump's unsuccessful trade war with China.

I'm not sure where you get that idea from. Currently, corn farming isn't a good proposition at all as prices and futures aren't up very much, but inputs have gone sky high (particularly fertiliser). The way we grow corn and wheat requires copious inputs of fertiliser.

With global capitalism grinding to a halt, we won't be able to get as good of a price for our exports. And other countries will get to play games with the Russian situation - imposing their own "mini sanctions", levying import tariffs, etc. and the U.S. won't really be able to do anything about it.

[Ken]

If Russian wheat and oil exports decline then American oil and grain producers benefit. 2022 is likely going to be a VERY good year for American wheat and corn farmers. Who probably need a break after Trump's unsuccessful trade war with China.

I'm not sure where you get that idea from. Currently, corn farming isn't a good proposition at all as prices and futures aren't up very much, but inputs have gone sky high (particularly fertiliser). The way we grow corn and wheat requires copious inputs of fertiliser.

With global capitalism grinding to a halt, we won't be able to get as good of a price for our exports. And other countries will get to play games with the Russian situation - imposing their own "mini sanctions", levying import tariffs, etc. and the U.S. won't really be able to do anything about it.

Shall we fact check your assertion?

Here are current wheat futures prices: https://www.foodbusinessnews.net/articl ... SDA-report

And here is corn: https://tradingeconomics.com/commodity/corn



From the article above they note:

Winter wheat futures soared past the $11 a bu threshold Thursday. In recent days, wheat futures have advanced more than 25% due to export disruptions because of the ongoing war in Ukraine. Corn and soybean futures also were supported by the Russia-Ukraine conflict with corn reaching new contract highs. March corn rose 12¼¢ to close at $7.51¼ a bu, but later months were mixed. Chicago May wheat leapt up again to the expanded 75¢ daily limit to close at $11.34 bu. Kansas City May wheat also surged to the 75¢ daily limit to close at $11.50¼ a bu. Minneapolis May wheat soared 60¢ to close at $11.18¼ a bu.

The laws of supply and demand still apply during times of war.

[Soloist]

lets fact check the fact check, same website.

Fertilizer concerns
The invasion is also adding instability to the input markets, said Samuel Taylor, farm inputs analyst for Rabobank. This includes the production and export of fertilizers out of the region and the flow of natural gas, which is used in the production of fertilizer, out of the region.

Russia and Belarus account for 40% of global potash exports and Russia accounts for about 22% of global exports of ammonia, 14% of global exports of urea, and 14% of global exports of monoammonium phosphate (MAP), which is used in soybean production.

Finding alternative sources for some of these products isn’t simple, Mr. Taylor said, because several, such as ammonia, have a rigid, specialized structure for delivery.

“Ammonia is transported from pipeline in Russia to the Black Sea,” he said. “That has been shut off. That is a market where we see a greater risk of volatility, albeit from a very high price base at the moment.”

If you can't get fertilizer, the crop gets more expensive and the supply is reduced...

Edit: I think we can all agree, war is bad for everyone.

[Ken]

lets fact check the fact check, same website.

Fertilizer concerns
The invasion is also adding instability to the input markets, said Samuel Taylor, farm inputs analyst for Rabobank. This includes the production and export of fertilizers out of the region and the flow of natural gas, which is used in the production of fertilizer, out of the region.

Russia and Belarus account for 40% of global potash exports and Russia accounts for about 22% of global exports of ammonia, 14% of global exports of urea, and 14% of global exports of monoammonium phosphate (MAP), which is used in soybean production.

Finding alternative sources for some of these products isn’t simple, Mr. Taylor said, because several, such as ammonia, have a rigid, specialized structure for delivery.

“Ammonia is transported from pipeline in Russia to the Black Sea,” he said. “That has been shut off. That is a market where we see a greater risk of volatility, albeit from a very high price base at the moment.”

If you can't get fertilizer, the crop gets more expensive and the supply is reduced...

Edit: I think we can all agree, war is bad for everyone.

Of course we can agree that war is bad.

I hope we can also agree there are many who profit from it. Going back to the time of the Romans and before. War profiteering is one of the oldest professions in history.

It is also usually good business for farmers. World War 2 is what saved my grandfather's farm after losing one in the depression and coming within an eyelash of losing another.

[Szdfan]

From the NYT live-blog

President Vladimir V. Putin of Russia on Saturday upped his rhetoric by describing the Western sanctions imposed against Russia since his military invasion of Ukraine as “akin to a declaration of war,” and warning that Ukraine might lose its statehood if its leaders continued to resist his military invasion of the country.

“The current leadership needs to understand that if they continue doing what they are doing, they risk the future of Ukrainian statehood,” he said at a meeting in Moscow on Saturday, in his first extended remarks since the start of the war. “If that happens,” he said, “they will have to be blamed for that.”

[Soloist]

From the NYT live-blog

President Vladimir V. Putin of Russia on Saturday upped his rhetoric by describing the Western sanctions imposed against Russia since his military invasion of Ukraine as “akin to a declaration of war,” and warning that Ukraine might lose its statehood if its leaders continued to resist his military invasion of the country.

“The current leadership needs to understand that if they continue doing what they are doing, they risk the future of Ukrainian statehood,” he said at a meeting in Moscow on Saturday, in his first extended remarks since the start of the war. “If that happens,” he said, “they will have to be blamed for that.”

I thought he already claimed they don't have statehood?

[Josh]

I thought he already claimed they don't have statehood?

Russia has not (so far) taken a position that the current state (such as it is) of the Ukraine can't exist; their position is that they don't want more neighbouring states joining NATO including the Ukraine. And they also decided they want Crimea, the Donbass, and at this point it looks like they'll take Odessa (which will probably be quite willing about it, much like Crimea was).

[Szdfan]

From the NYT live-blog

President Vladimir V. Putin of Russia on Saturday upped his rhetoric by describing the Western sanctions imposed against Russia since his military invasion of Ukraine as “akin to a declaration of war,” and warning that Ukraine might lose its statehood if its leaders continued to resist his military invasion of the country.

“The current leadership needs to understand that if they continue doing what they are doing, they risk the future of Ukrainian statehood,” he said at a meeting in Moscow on Saturday, in his first extended remarks since the start of the war. “If that happens,” he said, “they will have to be blamed for that.”

I thought he already claimed they don't have statehood?

He said they aren’t a real country because it had been created by the Soviet Union as one of the socialist republics. He also said that Russia wasn’t going to occupy Ukraine but “demilitarize” and “denazify” it. This most recent comment threat sounds like the possibility of annexation.