Russia's war with Ukraine expected to drive up food prices here at home and abroad

Russia’s ongoing war with Ukraine is driving up the price of wheat and could impact what you pay at the store.

It’s just one of the trickle-down effects of the fighting that has left thousands dead and displaced millions.

St. Andrews, Man. grain farmer Curtis McRae has watched wheat prices rise.

There could be an increased demand for his Manitoba-grown crops if the conflict doesn’t end soon.

“We don’t consume a lot of the wheat that we grow here so my whole career we’ve basically been trying to feed the world,” McRae said.

Both Ukraine and Russia are major exporters of wheat and there’s concern the war may result in disruptions to production in those countries.

That uncertainty has already driven up prices.

“A bushel of wheat is more than $12 U.S. which is a first in many, many years so if you’re growing wheat, you’ll make good money,” said Sylvain Charlebois, director of Dalhousie University’s Agri-Food Analytics Lab.

Charlebois said that’ll increase the cost to food processors, and in turn, the price consumers pay at the store.

“Eventually it will actually impact food prices — grain-based food products at first,” Charlebois said. “Over the next three, four months we’re expecting, say, bread to increase in price in Canada.”

Ryan Cardwell, a professor in the Department of Agribusiness and Agricultural Economics at the University of Manitoba, isn’t expecting a huge increase because wheat is only one component in a loaf of bread.

“When you combine that with the fact that most Canadian consumers spend a pretty small share of their incomes on food, at the end of the day the effect on food consumers in a place like Canada will be not out of line with what we’ve seen in recent years,” Cardwell said.

But the situation could be worse elsewhere, for low-income consumers who buy mostly unprocessed grain products in some North African and Middle East countries that depend heavily on wheat imports.

“So then the wheat share of their food bill is much, much higher than it would be for a Canadian consumer,” Cardwell said.

Cardwell said food aid charities buying wheat for emergency programs in places like Poland, where Ukrainian refugees are going, could also be hit hard by higher prices.

While it’s too soon to know just how disruptive the war will be on the production of wheat, he doesn’t see acute food shortages becoming a problem.

Cardwell said there are a lot of wheat-producing countries that can adapt to help meet world demand.

While Canadian wheat producers stand to benefit from higher prices, they’re also facing higher input costs.

Fuel is more expensive and the price of fertilizer — some of which is imported from Russia — has also increased.

McRae said the price of canola and soybeans is also attractive, but he suspects farmers planning to plant wheat won’t change away from it.

“The trick is just to grow lots of whatever we can grow and hopefully that can help sustain the world until there’s another major harvest happening,” McRae said.