The situation in the Black Sea is the one with the most potential to upset the global grain balance in the short term.
This was the message to delegates at Poultry Network Live from Will Foote, raw materials manager at ForFarmers UK, earlier this month.
Before the war, Ukraine had been responsible for 13% of global maize exports and 8% of wheat: “Ukraine is a significant player, and we need access to that grain,” said Mr Foote.
He said that, since the year 2000, Ukrainian production of its four main crops (wheat, barley, maize and sunflower) increased four-fold to 100m tonnes.
Having peaked in 2021-22, total output has since been down by 36% in each of the last two seasons.
Production and growth lost
“Not only have we lost production, we have also lost that growth as well.”
Russia was a much bigger grain player than Ukraine, but so far was largely unaffected, with just some changes in export destinations as certain parts of the world were not prepared to take their wheat, he said.
However, the significant change of late was an increase in Ukrainian attacks on Russian ports: “If Russian shipping stops, we’ve got a whole lot bigger problem than we had.”
Wheat production and consumption were closely matched at the global level, and had been for more than 20 years.
“There is no slack in the system. Over the last four years, world production has flatlined, and production has exceeded demand.”
As a result, world end-season stocks of wheat had been steadily drawn down, he said.
Whether it was wheat, maize or soya, record crops were needed every year, through higher yields and more acres, because the growth in demand for all of these was quite linear and inelastic.
The principal drivers are population growth, economic growth, and in the case of maize in particular, biofuels.
Yet in the longer term, the world was seeing more extreme weather events, and a general increase in temperatures, which could also disrupt supplies.
For these reasons, feed costs had shown huge volatility in recent times: “Even global commodity players cannot predict the market. There are too many imponderables,” concluded Mr Foote.