Former House Ag Chair Collin Peterson says the U.S. is “going to have to ride out this volatility” in the global grain markets as traders seek to get a handle on the path forward for trade in the Black Sea region.
The situation has been especially turbulent in the last week as Russia suspended its participation in a deal to facilitate Black Sea grain trade, only to renew it days later.
Former House Agriculture Committee Chairman Collin Peterson spoke on this week’s Agri-Pulse Newsmakers.
Speaking on Agri-Pulse Newsmakers, Peterson said the U.S. is limited in its options to make the global market more stable for U.S. producers.
“I don't think there's anything that Congress is going to do at this point because of it,” Peterson said, noting that he “wouldn't trust the Russians as far as I could throw 'em.”
Kip Tom with Tom farms and Vince Peterson with the U.S. Wheat Associates also joined this week’s show to discuss the implications of the Black Sea Grain Initiative and the impact it is having on the global wheat market.
Tom recently returned from a trip to Ukraine and said he witnessed a lot of “uncertainty with the deal,” but it is facilitating the movement of grain in the country. That being said, Ukraine still has a backlog of wheat to move.
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“They probably still have well over 20 million metric tons of last year's crop to move before they can even harvest much more of this year's crop and put it into storage for movement later this winter and in the next summer,” he said.
Vince Peterson says the deal is causing a lot of “price volatility every time [Vladimir] Putin decides he is in or he is out,” but that overall, there is not “a very big hole in the [global] wheat market.”
He says the war in Ukraine has resulted in higher commodity and input prices for wheat producers. Even though many producers have faced low wheat yields this year due to environmental factors, he says the war has still created an incentive to increase U.S. wheat production.
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